As we count down the days to the World Resources Forum (October 21-23), our attention has been turning increasingly towards fascinating China where it will take place. Given the novelty of the Chinese social enterprise scene, I sat down with Livia Macedo, who is actively involved in the Shanghai hub of the social enterprise network called MakeSense, to talk about the prospects of Chinese social entrepreneurship. Livia, a former mentor of the Choice movement for social enterprise in her home country Brazil, has carried out a market research on social business in China as the national coordinator for edge, and at the same time she has been advocating social enterprise for Shanghai university students, locals and expats alike though the MakeSense gang.
On social enterprise emerging in China:
This has been the title of an article published in the Spring issue of Stanford Social Innovation Review. Recently, the BBC reported about social entrepreneurship being not only a growing trend in China, but also a philanthropic activity with bigger potential than traditional NGO actions. What’s more, China daily wrote about the increasing popularity of social enterprises. How have you perceived the growing demand for social enterprises in Shanghai?
Livia: Social entrepreneurship altogether is relatively new in China but it is growing incredibly fast: the number of social issues to tackle is really large and there are individuals who are keen on solving them. In Shanghai, the Ministry of Civil Affairs itself is investing in the construction and the maintenance of the Social Innovation Park (operated by NPI). Through MakeSense, we are trying to connect entrepreneurs with experts via two channels: first, by organising workshops that target specific challenges that social entrepreneurs face, and secondly, through an online platform where individuals can join in to solve challenges. So the best part of MakeSense is the opportunity of connection. We have carried out the same activities in China as in other countries and the audience has been very responsive to our programs. Recently we organized a holdup (Author’s note: hold-up=MakeSense term for workshop) in Shanghai with four social entrepreneurs in need of advice. Around 70 people showed up, with at least half of them being Chinese.
Still, it is very difficult to register an NGO for this purpose, as they are considered to be politically more sensitive. However, social enterprises can be registered both as businesses and as NGOs.
Of course there are a lot of challenges to overcome like creating proper legislation, developing the organizations that support the sector (capacity builders, investors, etc.), promoting an entrepreneurial culture among the youth in China and including the relevant subjects in the university curriculum. Plus, there are very few successful Chinese examples which discourages Chinese youth to make a career as a social entrepreneur.
On social enterprise á la Chinese: setbacks and challenges:
With the government and the economy being so intertwined, how can Chinese social enterprises respond to the environmental and social problems innovatively?
Livia: This is one of the main challenges for the sector. Some organizations have cleverly found their way to partner with the government and achieve their goals on addressing social and environmental issues. Others prefer to get registered as a company, which is easier than becoming an NGO, but they won’t benefit from tax reduction or government loans. It is still challenging to run a social enterprise as there is no specific legal framework for them. Luckily enough, the problem is receiving more and more public attention.
Why are young people still motivated then to launch a “black sheep” start-up that has to face so many uncertainties?
Livia: Mostly, they are driven by their passion and their motivation to do good in society. But they are also under pressure from the society and their families to get a traditional MBA degree and well-paid jobs in banking, consulting and so on. So after some workshops we had held, they came up to me and told me how much they were enthused by the concept, adding that they cannot start their career working in this field now. Maybe in 5-10 years or in their spare time they will find a way to get active in the social business, they said. I think that the main challenge now is to show them that a bright and rewarding career path is actually possible through social enterprise. At the same time it is essential to help them develop their skills and a professional network. Edge, a talent development initiative that prepares young students and recent graduates for doing impact business, has started its activities in China as it saw huge potential in the country.
Do you know if in the end the MakeSense events have influenced the student’s career choices?
Livia: Many of our members in MakeSense are active in this field. There are a few entrepreneurs among them, while others work at NGOs or in the government. I think Make Sense is being a pioneer in China by contributing to getting more and more Chinese on board. As in the case of any other sectors, it is important to offer opportunities that allow individuals to get informed and involved. Another limit to the take-off of the movement is the fact that in general university education and parents do not encourage students to launch their start-ups.
It’s interesting that you mention education and skills. The aforementioned BBC article cited the executive director of Village Capital, a renowned funder of Chinese start-ups, saying that “ the Chinese are among the most innately entrepreneurial people in the world.” Would you agree with that?
Livia: Actually, I think that innovation is not the strength of the current system. But it will have to become one and it will have to be incorporated in the university education too, as the booming economy needs to deploy all its creativity to adjust and face its social and environmental constraints.
In spite of the difficulties, do you think that your efforts in MakeSense will pay off?
Livia: Definitely! The Chinese social enterprise sector has a great potential. First of all, the government is starting to pay more attention to the field. (Author’s note: the increased government support of social enterprises is also included as a goal in the Beijing Municipal Government’s Five-year Plan 2011-15 for social construction). Second, seed funding for social enterprises is also on the rise with the upcoming 1st China Social Investment Forum. I look forward to seeing the development of the sector and of the Shanghai MakeSense hub when I return to China!
Many thanks to Livia for the talk and also to Larry Tchiou from MakeSense Paris for introducing us!