Social enterprises are the future: why we cannot afford to waste this crisis

Dear Heads of State, dear participants of the World Economic Forum online summit,  

Our current economic model has reached its expiration date, or in fact, it had been already reached some time ago. The global pandemic has made this statement painfully clear, as pre-existing inequalities have surfaced due to COVID-19.  

Capitalism of shareholder maximization has created a reality where it is beneficial to look for quick wins instead of sustainable success. And to be clear, these are quick wins for the very few, not for most of the people, nor the planet.  

Dear Heads of State, dear participants of the World Economic Forum online summit,  

I call on you: let’s not waste this global crisis! Let’s redesign our economic system to work for people and the planet.  

It seems like economic growth has become equal to welfare and prosperity for all, but this is not the entire truth. Take the Netherlands for instance, a country which has seen its economy boom for the past 40 years, but the average household has barely seen its disposable income grow (Rabobank, 2018). In fact, in his book Capital in the 21st Century, Pikety demonstrated that this is a trend across the entire Western world (Pikety, 2014).  And we see the consequences of this right in front of our eyes, as winners and losers of our economic system live in increasingly separated worlds, leading to growing polarization and the rise of populism all over the world.  

And then about that other major crisis: the climate emergency. The faster GDP rises, the better an economy is said to be performing. But something else happens as economic activity expands; the amount of energy and resources we use also increases. This has led us to a situation in which, despite the economic downturn caused by COVID-19, greenhouse gas emissions are at a record high (UN, 2020). And again, we see the consequences of this right in front of our eyes: more severe storms, rising seas, droughts and fires and higher temperatures which has a whole series of effects, not in the least the displacement of millions of people that have lost their livelihoods because of it.  

In short, business as usual is failing us.  

But Dear Heads of State, dear participants of the World Economic Forum online summit,  

it doesn’t have to be this way.  

There are about 2 million social economy enterprises in Europe alone, representing 10% of all businesses, whose explicit primary objective is to maximize social, societal or environmental impact and not to maximize return on investment (European Commission, 2021).  

Where social economy enterprises are true pioneers, entire industries follow. Research of Social Enterprise NL, based on academic literature and case studies from the field, demonstrate that the activities of social enterprises often inspire or even compel widespread change. Take Tony’s Chocolonely, which started as a small social enterprise that sources cacao to ensure farmers a ‘living wage’ and has now expanded to a fast-growing international company, whose sourcing principles have been followed by the largest Dutch supermarket chain (WEF, 2021). 

Dear Heads of State, dear participants of the World Economic Forum online summit,  

Now is the time to act.  

As first responders to the crisis and pioneers of a green and inclusive society, social entrepreneurs have a key role to play in shaping a new tomorrow. But to play their part fully, support from all sectors is needed. 

I call on you to:  

• Listen to the voices of social entrepreneurs, and increase their visibility;
• Support social enterprises to respond, recover and reset through tailored business support programmes; 
• Invest in innovative financing schemes, focusing on social return on investment; 
• Align economic stimulus packages with ambitious policies to tackle climate change and social exclusion.  

I envision a world in which social enterprise is the standard, rather than the exception. The policy decisions you make now, will determine what our post COVID-19 economy looks like.  

 I call on you to take this opportunity and support business which look beyond short-term financial return. 

Only such an approach delivers win-win-win for people, planet and prosperity,  

We are all in unchartered waters, but if we work side by side, we can truly Build Back Better. We stand ready to work alongside you to further advance these priorities. 

Your sincerely, 

Veerle Klijn 

Policy Lead at Euclid Network