Over the past 10 years, economic growth has fueled a global evolution. Gross domestic product rates are on a decade-long positive run. Inflation is low. And technology is enabling levels of corporate efficiency never seen before. However, with this success comes greater examples of inequality and a growing gap between the rich and poor.
Consider this: It’s estimated that the 26 richest people in the world have the same wealth as the poorest 3.8 billion—more than half of the world’s population. As the business world enjoys one of the greatest streaks of growth in recent memory, companies have a clear duty and responsibility to put their relevance to work for a more inclusive kind of prosperity, by supporting social enterprises.
A commercial model for social enterprise has existed since the 1970s, when it was first developed in the United Kingdom. While it’s not a novel concept, today’s economic, social, and environmental circumstances are leading to a redefinition of what social enterprise is and an explosion in the movement’s growth.
Millennial and Generation Z workers have come of age and found empowerment in digital tools that enable them to inspire social change. These generations have demonstrated that they care deeply about issues that affect billions of lives and want to work for companies—or start their own—that reflect this consciousness. In fact, nearly a quarter of business owners under the age of 35 consider benefiting society to be their main motivation, according to research from HSBC Private Banking.
Social enterprises are income-generating businesses with clear social or environmental missions that plow up to 50% or more of their profits back into their cause. While that may sound like a counter-intuitive move for growth, it is possible to build a growing business while doing good. Look no further than BioLite, an innovative energy company in the United States, or WildHearts Office, an office supply company in the United Kingdom. This is a burgeoning sector, numbering in the millions of companies worldwide, of which 80% have been founded in only the past 10 years.
A company’s worth is increasingly determined by its societal and environmental impact, and the investment community is taking notice of the opportunity, realizing there’s big money to be made in this space. But venture capital funding will only get these companies so far. Their real surge comes with the power of being connected to customers.
If given the choice, most companies would opt to support social enterprises. At SAP, we are partnering with Social Enterprise UK to use our Ariba network—a digital marketplace where buyers and suppliers across the globe transact $3 trillion in goods and services every year—to provide the connecting fabric for corporations to find and do business with social enterprises. By connecting these impact-driven companies to corporate customers, we can power a more inclusive, more sustainable, and even more profitable economy.
You don’t need to be a social enterprise to support social enterprises. Unleash your workforce in support of social improvement, integrate social enterprises into your supply chain, and watch the world-changing effects of your operations grow. Whether a traditional corporation, a certified social enterprise, or an individual employee, if we want to truly help the world run better and improve people’s lives, we need to put our entrepreneurial spirit in the service of everyone’s social missions and create a fairer world where everyone prospers.
Adaire Fox-Martin is a member of the executive board of SAP.