Social enterprise holds the key to change in China, argues Joe Oliver.
Company X is the Silver Bullet of Social Enterprise in China. What is special about company X? It displays the three elements that will make it a market leader in China across the next decade: it is aligned with government, has a solid business case and targets a growing consumer demand for lifestyle services. It also happens to be a social enterprise.
Social enterprise in China is a hot topic right now. The hybrid of values and profit-making could be the most likely middle ground for the middle kingdom between western-driven capitalism and the government’s communist values. This sentiment was summed up last year by the Chinese premier Wen Jiabao:
“We must not any longer sacrifice the environment for the sake of rapid growth and reckless roll-outs, as that would result in unsustainable growth featuring industrial overcapacity and intensive resource consumption.”
Although the concept of social enterprise is gathering, the evidence that suggests it will take hold is so sparse it’s hard to rely on. So the question remains, is social enterprise the silver bullet to balancing commercial and business interests with sustainable growth in China?
There are three key aspects to really answering this question through the current evidence available.
Firstly, the most powerful force in China: the government. In the case of social enterprise, the government has begun to relax the red tape, and encouraged the development of NGOs and social enterprise in certain locations. With 70% of Chinese residents surveyed responding with discontent about their present life quality, social enterprise might just help the Chinese government to retain harmony and stability across its scope of influence.
Secondly, the business case. As a major economic power with plenty of growth and developing social problems, there are huge opportunities for problem-solving ideas. The government’s Policy Research Centre for Environment and Economy estimates that China’s environmental protection industry will soon be growing at up to 20% per year, becoming the largest in the world. A great case for bringing business to China that solves an endemic issue and has the potential to make money.
Finally, consumer behavior is compounding the move towards a fertile ground for social enterprise. Spending power in the BRIC countries is on the rise, due to a rising middle-class and large populations. In fact, spending power in China, India and Russia is predicted to treble by 2018, creating an incredible demand for lifestyle services.
Making money and solving the problem is the key to doing good business in China. Having empathy for the government’s challenge of providing support to a vast population is key to designing an effective change programme that provides revenue to the bottom line and becomes self-sustaining.
This approach reduces conflict between businesses and the government and eventually leads to a greater benefit to citizens. I have no doubt that in years to come the rest of the world will be learning lessons from the social enterprises that have sprung up in China, providing solutions to problems on a scale that has never been seen before.
Joe Oliver is a Founding Partner at We Impact, a social enterprise based in China and the UK that specialises in sustainable lifestyles.
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