Recently EUCLID posted a summary report on the scaling of social enterprises. It is quite interesting and insightful.

Here is a full link to the article.

Recent years have seen a rapid increase in the number of social enterprises across the world, introducing a broad range of innovations to different industries. Recent estimates suggest that already 21% to 26% of start-ups in Europe operate with a social, community or environmental goal as a primary organizational purpose. Many of these ventures innovate and create novel approaches to address such challenges.

However, even the best innovations can only unfold their impact potential when they are brought to scale.  In light of the many pressing challenges global society is facing and the limited availability of resources, time, and attention to solving them, scaling of the most effective and efficient solutions has been argued to be an ethical imperative. As a popular quote, attributed to former US president Bill Clinton, puts it:

“Nearly every problem has been solved by someone, somewhere. The challenge of the 21st century is to find out what works and scale it up.”

In spite of this clear need for internationalising innovative social enterprises, the vast majority of social entrepreneurs operate only on a local scale. A survey of social entrepreneurs we conducted in the global Impact Hub Network showed that only 5.7% of early-stage social entrepreneurs declared having been actively internationalising their work in the past year, and only about 17% of organisations reported attempts to scale their activities overall (locally or internationally).

Why internationalisation is a challenge for social entrepreneurs

These small numbers of internationalisation and scaling efforts among social entrepreneurs can be attributed to a number of reasons. First, there are fewer monetary incentives for growth in social entrepreneurship than in commercial entrepreneurship. Unlike for-commercial entrepreneurs, social entrepreneurs often serve disadvantaged groups and address problems affecting disenfranchised groups or future generations – in these cases the need for their services does often not translate into (financial) demand. Second, in comparison with commercial enterprises, growth is not as strongly driven by investors and shareholders, who often have more space-bound interests or mandates. Similarly, founders’ motivations can be hard to scale as well, as they often stem from a sense of responsibility towards their local community and the desire to fix a problem that they experience themselves.