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Encouraging social entrepreneurship in Kuwait – Special report

In the past five years, Kuwait has witnessed an extraordinary rise in entrepreneurship and small business start-ups. However, there is an area which has yet to be explored: social entrepreneurship. Social enterprises are businesses set up to address social, economic and environmental challenges. While non-profit organizations have existed for several decades, for-profit businesses with a social purpose embedded into their vision are relatively rare.

If proven successful, kinder financially rewarding businesses will contain important lessons for both charities and purely profit-based corporations. Is it possible to create a profitable organization by finding solutions to community's problems?
Several models for a social enterprise that could be valuable for current local community follows:
* A business which invests in clean energy production
* A business which creates and promotes healthy foods for children to encourage good eating habits at an early age
* A business that trains seniors to remain productive members of society and opens a new pool of skilled labor
* A business which creates a venue for volunteering opportunities and volunteers to meet

Rather than depending on public and private sectors only, government support for social entrepreneurs can allow public policy to meet employment and other social, economic, and environmental challenges in a more effective and efficient manner. Kuwait benefits not only from the jobs created, but also from the variety of objectives and wide range of operating sectors of such enterprises, including elderly care, social house development, health awareness and care, amongst various others. Social enterprises allow the delivery of quality welfare services and support for society's most vulnerable.

Public policy can encourage social entrepreneurship creation in several ways:
Voice benefits, formulate a plan, and monitor
The government can integrate social entrepreneurship into education and training to form a positive outlook and thus attract young talent. It can generate a plan for youth in social economy and embed it as a main component of local development, and ultimately create a monitoring committee to serve as an observatory.

Develop legal definitions and regulation structure
Policy development in social enterprise requires a clear legal definition of social enterprise to govern matters such as access to capital and its regulations. Regulation measures, such as financial reporting requirements, must recognize both aspects: social benefit and economic profit. Such measures should be formed to allow the enterprise to meet both goals and survive in the long-term.

Finance
Public policy can provide funding for social entrepreneurs start-up through small loans. These start-up grants aimed at social economy can be investigated through feasibility before the launch of the enterprise and monitored by the government in later phases. Investment support can also be supplied as an incentive to overcoming some difficulties, such as hiring disadvantaged.
Public funds spent on social enterprises which pursue general interest are a more efficient way to employ resources, considering both economic and social return on investment. Proceeds for the government from public resources on social enterprises include savings from reduced social benefits and spending from profits of social enterprises. The social entrepreneur can be a cost-effective policy improving the spending of public money in addition to meeting demands unavailable in current conventional markets.
*Naeimah Al-Kharafi is an administrative engineer and lecturer in Kuwait University. Although graduated and trained in architecture, she completed her MBA in 2014 with distinction and is an avid contributor in topics of business, entrepreneurship, and public policy.

By Naeimah Al-Kharafi

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This article was published on 12/10/2014