Diana Hollmann

Primer on Social Entrepreneurship in the MENA Region

“Apparently, this is an issue whose time has come”, Secretary of State Hillary Clinton said referring to the new report on “Social Entrepreneurship in the Middle East: Towards Sustainable Development for the Next Generation” while delivering her closing remarks at the recent Presidential Summit on Entrepreneurship in DC.

Surely, I am not the only one who is very excited seeing this primer report on social entrepreneurship in the Middle East. Compared to other parts of the world, little research and few case studies are available that address this topic in the Middle East. Based on a series of round tables conducted throughout the region over the past few months, this new report by the Middle East Youth Initiative (MEYI) maps the landscape of social entrepreneurship in the Middle East, summarizes key institutional actors and opportunities for collaboration, and presents a set of recommendations on how to to move ahead.

NextBillion.net interviewed Ehaab Abdou, advisor to the Middle East Youth Initiative and lead author of the new report. Ehaab is also one of the first Ashoka Arab World fellows as well as co-founder and board member of Nahdet El Mahrousa (Arabic for “Renaissance of Egypt”), an Egyptian youth-led NGO that incubates social enterprises in Egypt and in the region.

NextBillion.net: What is the Middle East Youth Initiative and how is it related to social entrepreneurship?

Ehaab Abdou: With the main aim to promote the economic and social inclusion of youth in the Middle East, the Middle East Youth Initiative was launched in 2006 by the Wolfensohn Center for Development at the Brookings Institution and the Dubai School of Government

Over the past few years, MEYI has produced some cutting-edge research and policy work related to youth in the Middle East. A series of our country studies are included in the book “Generation in Waiting: The Unfulfilled Promise of Young People in the Middle East” published by Brookings Press in 2009. The Initiative’s recent work on social entrepreneurship can be seen as a natural continuation of this foundational research on youth in the Middle East. MEYI sees social entrepreneurship as one of the tools with the potential to contribute to addressing many of the challenges we have identified and studied over the past few years.

While some have viewed the region’s youth bulge as a danger, we see the potential positive impact and how this could be an asset for development. Given the right institutions, policies and framework and using the full potential of tools such as social entrepreneurship, the youth bulge could actually provide the region with an unprecedented opportunity for a leap forward and for economic development and overall prosperity. Our work on social entrepreneurship is being conducted in partnership with Silatech, an organization based in Doha that seeks to generate solutions in critical youth areas by promoting new knowledge, innovation, and learning across borders.

The report “Social Entrepreneurship in the Middle East: Towards Sustainable Development for the Next Generation” was the culmination of our first phase of research, which, as mentioned, focused on achieving a better understanding of the landscape, challenges and opportunities of the topic in the region. Based on the report, its analysis and recommendations, we are aiming now to forge partnerships with key players in the region committed to promoting innovation, social entrepreneurship and social investment as tools towards youth development.

NextBillion.net: What has led you to assemble this primer on social entrepreneurship in the MENA region? What do you hope to achieve?

Ehaab Abdou: We see this research as useful on several fronts. First, it aims to generate awareness about the potential of social entrepreneurship to address social, economic and environmental challenges in a financially sustainable way. This potential can be best harnessed within a conducive regulatory framework and policy environment. Second, and more generally, we hope to advance the regional and global dialogue on social entrepreneurship. As you mentioned, there is very little written about social entrepreneurship in the Middle East region. Third, for us and other stakeholders, we hope to capture the current state of social entrepreneurship in the region, including the opportunities and challenges facing social entrepreneurs and enterprises, so that we can each play a role in helping them achieve even more. Finally, the report presents a set of well-developed recommendations for some of these key stakeholders, including national policy-makers, social investment organizations, corporate sector leaders, educational institutions, and the media.

NextBillion.net: How would you summarize the main findings of the report?

Ehaab Abdou: We can say that there is a lot of potential in the region in general and more specifically a great potential for social entrepreneurship to contribute to the region’s development through youth-led and youth-targeting social entrepreneurship efforts. Some of the positive trends we captured included the increased interest in volunteerism and civic engagement among youth across the region. There is also an increase in strategic private philanthropy. There have also been some improvements in policies related to private sector and the business climate. There is also an increase in cross-sectoral and multi-stakeholder partnerships, although we need to see more of these. We are also seeing some positive responses to the need to support entrepreneurship at large and, to a lesser extent, social entrepreneurship. Those include efforts and increased interest from international social entrepreneurship organizations, social investment funds, international donors, higher education institutions, and the corporate sector mainly.

NextBillion.net: What surprises, if any, did you come across in your research?

Ehaab Abdou: First, there is a lot going on in the region in terms of social entrepreneurship, even though many of these efforts might not be labeled as such. Second, we found some surprising views during our interviews and roundtables in the region. For example, some individuals, who are themselves social entrepreneurs, are skeptical toward the concept, seeing it as simply a fad or the latest development model conceived in the West. Some others criticized what they saw as an excessive focus by supporters of social entrepreneurship on the individual. They saw this attention to the individual as coming at the expense of more community-building and communal-level empowerment and development. Some viewed this as an issue with potential negative repercussions. On the other hand, we were equally surprised to encounter some people who view social entrepreneurship as a ‘magic bullet’ or cure for all development challenges and issues.

NextBillion.net: From your research, what did you find to be the main barriers to social entrepreneurship specific to the region?

Ehaab Abdou: The main barriers faced by social entrepreneurs and social enterprises can be divided on both the macro and the micro levels. First, on the macro level, there is no clear definition of social entrepreneurship that is universally agreed upon at the global level and, more specifically for the region, we lack an accepted term for the concept in Arabic, for example. Second, the Middle East largely lacks conducive regulatory and legal frameworks which could enable the growth of social entrepreneurship on the grass-roots level. For instance, there are few “hybrid” for-profit / nonprofit models in the region, such as the low-profit limited liability company, L3C, in the US or the Community Interest Companies, CIC, in the UK. The region also has no clearly defined framework for social investment. Additionally, several key institutions could play a much more significant and a much larger role in promoting innovation, entrepreneurship, and social entrepreneurship among young people in the region. These include education systems and the media, both of which can highlight successful models of social entrepreneurship – as well as less successful models – and can instill skills to build confidence, critical thinking, social responsibility, civic engagement and a drive for innovation among youth.

With regards to the micro level, we have identified several obstacles through our discussions with social entrepreneurs across the region. For example, social entrepreneurs lack access to professional and technical assistance such as legal support, management support, marketing services, etc. Additionally, traditional donor funding approaches and mechanisms are an issue. Most international donors’ grants are focused on short-term activities and projects and hence do not provide long-term support for the financial sustainability or scaling-up of successful social enterprises. Furthermore, and as previously mentioned, in many countries of the region the policy and regulatory environment for civil society organizations is not conducive to financial sustainability or growth. For example, in some countries there is a lack of clarity on policies related to the ability of non-profit organizations to engage in income generating activities; in other countries no provisions for such activities – clear or otherwise – even exist.

NextBillion.net: What next steps do you envision to leverage the findings from your report? Do you already have specific initiatives in mind?

Ehaab Abdou: At MEYI and in conjunction with our partners, we will be pursuing some of our own recommendations from the report. We advocate a multi-stakeholder approach to achieve these goals, working with governments, corporate sector players, international donors, foundations, civil society actors, the media, among others. We are focusing on three main areas that we believe we are well positioned to pursue:

  1. Assessing the feasibility of national replication funds. We will be assessing the feasibility with Egypt as a pilot. With some initial support secured for that, we will be focusing the coming few months on assessing the feasibility of this funding coordination mechanism among donors foundations, social investors, philanthropists and the corporate sector on a country level. Once we have a business plan developed, this would hopefully then be useful as a model not only in the Middle East but also in other regions of the world.
  2. Setting up a regional social investment forum for scaling up youth initiatives. As related to the recommendation just mentioned, this recommendation was based on the finding that while we see many innovations in the region, they lack the necessary support for impact evaluation, documentation, business planning as well as access to possible funding / social investment opportunities in order to scale up and to achieve wider and larger impact. To address this issue and support more social enterprises and innovations in accessing technical support and funding, we are currently in discussion with potential partners currently to establish this regional mechanism and to get it off the ground hopefully soon.
  3. Convening national and regional policy dialogues, focusing first on the introduction of legal frameworks to encourage the establishment of social investment funds”. As mentioned in the report, this policy dialogue should aim to produce an action plan for introducing legal structures in the Middle East that are more conducive for social investment. In order to encourage more social investment funds in the region such a dialogue would include an in-depth analysis of global models and current laws in the region to identify needed modifications and test ideas for new regulations. It would also provide an opportunity to present recommendations on the design of country-level legal frameworks that in turn could encourage a stronger presence of social investment funds of global-, regional- or country-level investors.