Social Entrepreneurship in the Middle East

Volume 2

Dima Jamali, Alessandro Lanteri, Dima Jamali, Alessandro Lanteri

• Publisher: Palgrave Macmillan
• Year: 2016
• Print ISBN:
  9781137509932
• eBook ISBN:
  9781137509956
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

This two-volume book unveils trends, strengths, weaknesses and overall dynamics and implications of social entrepreneurship in the Middle East region, whilst identifying both opportunities and threats facing social entrepreneurship and supplements through a wealth of insights and examples inspired from practice and current applications.

1

Bridging the Gap between Commerce and Charity: Challenges and Opportunities in Lebanon and Egypt

Teresa Chahine and Mona Mowafi

The years 2011–2013 have seen Arab citizens take matters into their own hands by demanding change and mobilizing the human resources, human energy, and social networks required to make change happen. These developments have brought a new set of questions about how citizens will implement social change in a sustainable, scalable manner to address the social, economic, and political problems they brought to light, namely the lack of freedom imposed by poverty, poor health, limited education, and undemocratic governance.

Social entrepreneurship in the Arab world, as in many societies across the globe, dates back decades and centuries or longer before today’s terminologies were coined and has been applied in many areas such as agriculture, health, and education. Today, however, information technology allows a more rapid exchange of knowledge that can be used as a tool for promoting, developing, and implementing innovative social change in rapidly evolving contexts, and advanced legal systems provide the potential for formalizing the process of engaging such a hybrid business model.

Overview

In recent years a few key efforts have been made to map social entrepreneurship in the Arab countries and survey those who are engaged in this sector. “Social Entrepreneurship in the Middle East: Towards Sustainable Development in the Next Generation” was published in 2010 by the Brookings Institute, Dubai School of Government, and Silatech, a social enterprise founded by the Emir of Qatar and his wife. This report focused on internationally recognized social entrepreneurs, using information from Ashoka, Skoll Foundation, Schwab Foundation, Synergos, and Echoing Green. Many of the entrepreneurs reviewed were women; most had high levels of education compared to the general population, and a large proportion had experienced the opportunity to study or work abroad. The report highlighted social entrepreneurship as a solution to the economic and social problems caused by the growing youth bulge and high unemployment rates in many Arab countries (Abdou et al., 2010).

In 2012 researchers at Stanford University published the results of an online survey carried out by an Arab online recruitment website, narrowing in on the importance of social entrepreneurship post Arab Spring. The authors found that the political and economic changes that took place in the prior year have had a positive effect on people’s interest in social and economic development, and have spurred young people to look to self-employment as a solution to the negative impact of the political turmoil on the economic landscape (Bucker et al., 2012).

Both reports echoed the results of a previous study published by the Global Entrepreneurship Monitor in 2009, which compares social versus traditional entrepreneurship activity worldwide. In this study, many Arab countries were classified as factor-driven economies, which focused on pressing needs such as health, agriculture, water, and sanitation, as opposed to innovation-driven economies which foster culture-related organizations, online social networking, and more advanced social services such as services for the disabled and waste recycling. Social entrepreneurship activity was found to be less prevalent than traditional entrepreneurship activity in factor-driven economies compared with innovation-driven economies (Bosma and Levie, 2009). This implies that a prerequisite for fostering social entrepreneurship is supporting the pioneers of new ventures targeting media and innovation and nurturing social entrepreneurs providing advanced social services.

Methodology

In this chapter, we report from the field to illustrate examples of the practice of social entrepreneurship in the region and key themes that have emerged, discussing the challenges and opportunities facing citizens engaged in social entrepreneurship. Examples are drawn from Lebanon and Egypt, two countries with numerous similarities along with striking differences, reflecting the commonalities and disparities in the regional landscape (Box 1). This fieldwork was conducted by researchers at the Harvard School of Public Health with the purpose of informing future social entrepreneurship initiatives in their home countries. While this chapter is by no means a comprehensive review, it provides insight into the current situation in these two countries and sheds light on some of the motivating factors, obstacles, and resources available to social entrepreneurs in similar contexts.

Box 1 Comparing country characteristics related to population health and social innovation

• 2005 Cedar Revolution in Lebanon and 2011 Arab Spring in Egypt catalysed citizen leadership and social innovation while political and economic instability continues in both countries to date

• Governments in both countries are lagging behind citizen demand in creating legal structures to enable social entrepreneurship

• While Egypt’s land size and population size are both much larger, Lebanon increasingly shares high population density and competition for resources, especially with the influx of Syrian refugees post-2011

• Both countries host leading academic centres and private companies, with common strengths including tech innovation and an increasing focus on corporate social responsibility and social innovation

The examples shared below stem from observations collected on site during scoping visits conducted by the authors during January–October 2011. These visits served as fact-finding trips which later informed the formulation of new interventions launched by the authors in their respective countries in the form of two new organizations: RISE Egypt, currently led by Dr Mona Mowafi; and Alfanar Lebanon, currently led by Dr Teresa Chahine. This chapter represents an updated version of the initial scoping report, including recent developments which have occurred in the social entrepreneurship landscape in both countries since the initial time of writing. The information presented below is intended to serve as a baseline snapshot which describes current efforts to bridge the gap between commerce and charity in Lebanon and Egypt. Future reports will present further analysis on the evolution of the social entrepreneurship landscape over time in these two countries by drawing comparisons between the baseline snapshot described below and progressive changes occurring over time through the implementation of new initiatives, organizations, and support structures for social enterprise in Lebanon and Egypt.

Local and regional contexts

Following the start of the Arab Spring in 2011, young Egyptians are struggling to maintain their momentum for social change, amidst political developments and turmoil. The previous reports discussed above indicate that Egypt hosts the largest number of social entrepreneurs in the region, defined as non-conventional innovators who achieve positive social impact using sustainable methods that can be adapted and scaled up beyond a particular local context (Abdou et al., 2010). Country-specific studies suggest that the amount of capital available for social entrepreneurship is also on a large scale: a 2005 study by Marwa El-Daly found that $1 billion was donated annually by Egyptians to Egyptians (El-Daly, 2005). The use of social media to coordinate youth efforts during the revolution in 2011 was subsequently propagated into organizing systematic and long-term social change.

Lebanon, while significantly smaller than Egypt in both land size and population, has provided fertile ground for entrepreneurial changemakers subsequent to the decades of civil war which the country experienced in the last quarter of the 20th century (WEF, 2011). The Lebanese social entrepreneurs interviewed in the Brookings/Dubai/Silatech 2010 report had the lowest confidence in their government’s efforts to combat corruption, and their government’s support of small businesses and start-up ventures (Abdou et al., 2010). In this regard they were followed closely by Syria, not a surprising result since the two countries have been closely intertwined throughout history and especially in recent years. Although at the time of the above-mentioned report the war in Syria had not begun, at the time of writing the ongoing war has tangible repercussions across the border in Lebanon, not only related to the geopolitical implications but also on the socio-economic consequences of over one million refugees (Mullen, CNN, 3 April 2014). The resulting need for resources to support humanitarian assistance has underscored the importance of a self-reliant and self-sufficient civil sector in Lebanon, increasing the interest of development organizations to explore social enterprise approaches in order to generate their own financial viability rather than rely on international aid agencies and donors.

Within these evolving contexts, the current landscape in Egypt and Lebanon provides fresh ground for social change on the one hand and a suite of obstacles for changemakers on the other hand. Compared to more politically and economically stable neighbours in the region such as the Gulf countries, Egypt and Lebanon are experiencing rapidly changing circumstances from day to day, week to week, and month to month. Yet the number of social entrepreneurs, the resources available, and the dialogue surrounding social entrepreneurship are by far more tangible in Egypt and Lebanon than in other rapidly changing and tumultuous environments in the region such as Syria and Libya, where civil society is nascent.

Both countries host leading academic centres in their capital cities, which have served as catalysts for local and regional dialogues on social entrepreneurship. In 2012 the American University of Cairo (AUC) hosted a conference on entrepreneurship and innovation in shaping the future of Egypt. The American University of Beirut (AUB) similarly has hosted the annual Global Entrepreneurship Week (GEW) since 2010; in spring 2012 researchers at AUB, funded by Synergos, a global support organization for systems changing, produced a report mapping social entrepreneurship initiatives in Lebanon (Feghali et al., 2012). Social entrepreneurship has also been a cross-cutting theme within the context of cross-sectorial collaboration in general and corporate social responsibility (CSR) in particular, as highlighted in the CSR Conference of 2012 and “CSR in Action” programme of 2013, both of which took place at AUB under the leadership of multiple partners from the private, academic, and civic sectors to foster the exchange of knowledge and resources for social innovation.

How do these two countries reflect the current situation as previously described in the regional and global reports we mention above? What are the emerging themes in terms of social entrepreneurship challenges and opportunities as illustrated by the latest stories from the field in Egypt and Lebanon? Below we highlight key cultural, economic, and structural issues affecting social entrepreneurs in the context of Egypt and Lebanon and discuss how they relate to ongoing and future efforts in the region (Figure 1.1).

The Lebanon experience

The social sector in Lebanon has historically been composed largely of traditional non-governmental organizations (NGOs) operating as charity organizations. Despite the crucial role of NGOs in providing relief and welfare in Lebanon during and after the civil war, they are often regarded as being less effective and more vulnerable to external forces when compared to the private sector, due to their heavy reliance on charity and grants. Meanwhile, the for-profit sector in Lebanon has illustrated measurable impact in shaping the country’s economic development and reconstruction; striking examples include the telecommunications companies responsible for the widespread penetration of mobile phones and the small network of entrepreneurs responsible for the increasing use of residential solar panels for household water heating. The large majority of traditional for-profit businesses in Lebanon are, however, primarily focused on maximizing financial gain with only secondary or no regard for social and environmental impact.

Figure 1.1 Key criteria for social enterprises

The use of business models and methods to provide efficient solutions to social problems is a rare concept among Lebanese entrepreneurs. We define a social enterprise as an organization whose primary product or service is aimed at solving a social problem, and who can demonstrate that this solution is effective, scalable, and sustainable, as illustrated in Figure 1.1. However, the number of innovative, scalable, and financially viable organizations that have been formed to address social problems in Lebanon is limited. According to our observations, the majority of organizations related to the social arena in Lebanon have historically fallen into one of three categories: (1) organizations which have been formed to promote entrepreneurship, (2) traditional NGOs which provide social services and products but rely on charity and donations, and (3) businesses which have a socially beneficial side effect although their primary product or service is commercial (Figure 1.2).

Organizations which have been formed to promote entrepreneurship for the purpose of fostering economic development became increasingly popular after the Cedar Revolution of 2005 when international official development assistance agencies shifted focus from their previous democracy-building thematic programming (empowering individuals to make political change) to a new development framework of empowering individuals to make economic change (Stel, 2012, 2013). Examples of this are the UK-based Mowgli foundation and the US-based Cisco Entrepreneur Institute at AMIDEAST Lebanon, as well as the US-Middle East Partnership Initiative (MEPI) which hold regular events for aspiring entrepreneurs including competitions, mentorship, financing, and skills-based workshops. Similar private and non-profit initiatives such as Endeavour Lebanon soon followed. Further momentum and leadership were soon added to the movement by Lebanese entrepreneurs, largely from the expatriate community – or those who previously lived abroad and have now returned to the region – initiating start-ups and encouraging others to follow their league (WEF, 2011). An early example of this was Yalla!Startup, initiated by Lebanese software engineers living in the US. In 2010, this non-profit organization held a Yalla!Startup weekend in which aspiring entrepreneurs from Syria, Jordan, Egypt, and other neighbouring countries participated. One of the winning projects launched from the weekend was Mimix, a web-based tool that translates speech into sign language for the hearing-impaired, which went on to win first place in the Global Startup Weekend (Startup Global Battle, 2010). A more recent and more nationally focused example is LIFE Lebanon, a consortium of Lebanese financiers living abroad who are currently developing an incubator for entrepreneurship in Lebanon (Bejjani, 2012). Bader Young Entrepreneurs programme took root as one of the first local initiatives mobilizing resources from business leaders to new entrepreneurs. In recent years, Berytech has emerged as a leading space for innovation in Lebanon, and has paid increasing attention in its programming to social entrepreneurship. Regional initiatives such as ArabNet, Wamda, and MIT Enterprise Forum are now also turning increasingly towards social impact as an integrated component of their programming.

Figure 1.2 Categorization of the most common types of organizations found in the Lebanese social arena to date

However, among organizations that promote entrepreneurship in Lebanon, it is rare to find one that focuses specifically on promoting social entrepreneurship. AltCity, formerly called RootSpace, was founded by a Lebanese social entrepreneur who resided for many years in Silicon Valley, and began by encouraging youth communication channels. Beyond Reform and Development (BRD), a consulting firm with a social mission, attempted to catalyse the formation of a society for social entrepreneurs in Lebanon (Doumit, 2012). Most recently, the formation of Nabad (Arabic for “Pulse”) through a partnership between BRD and Arc en Ciel, a non-profit organization discussed in more detail below, with the support of PACE-USAID funds has played a more tangible role in sparking social enterprise through its social enterprise contest, workshops, and incubator programme. Funding organizations such as Alfanar venture philanthropy which focus on building social enterprise have recently emerged onto the scene. University-based initiatives have also begun to snowball at AUB, USJ, ESA, and Haigazian, largely due to student interest in social enterprise.

Despite the growing movement towards entrepreneurship in the business sector, innovation in the social sector remains primarily under the territory of civic organizations or NGOs. Turning to the public health sector, to draw an example, one entrepreneurial organization in the NGO world which stands out as offering an innovative and scalable solution to a persistent social problem in Lebanon is Donner Sang Compter (French for Give Blood Count), a web-based database of blood donors (Van Tets, 2011). Although heavily reliant on grants, awards, and fund-raisin...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Figures and Tables
• Foreword
• Acknowledgements
• About the Editors
• Notes on Contributors
• List of Abbreviations
• Introduction
• 1. Bridging the Gap between Commerce and Charity: Challenges and Opportunities in Lebanon and Egypt
• 2. The Social Enterprise Sector in Egypt: Current Status and Way Forward
• 3. Building the Entrepreneurial Ecosystem in Saudi Arabia and the Middle East
• 4. From Sectarianism to Solidarity: A Vital Role for Social Entrepreneurs in MENA
• 5. Social Entrepreneurship in Morocco: Prospects and Challenges
• 6. Social Entrepreneurship in Morocco: A View on the Cultural Factor
• 7. Social Incubation and the Value Proposition of Social Business Incubators: The Case of nabad
• 8. Incubators and Funding Institutions in Lebanon: An Infrastructure for Successful Social Entrepreneurs
• 9. Defining Social Entrepreneurship in the Context of a Democratic Transition: The Case of the Tunisian Center for Social Entrepreneurship
• Index