Acts of philanthropy are commonplace in developing countries – such as Egypt and most parts of Africa – where major development problems continue to unfold. From that, coming up with innovative and sustainable solutions to pressing societal dilemmas lies at the forefront of the entrepreneurial landscape in the said countries.
As Eric Ries’ lean startup theory suggests: innovations are the ones that solve a real problem where actual demand is; therein lies the key reason for the abundance of community-driven entrepreneurship in emerging economies.
A research paper commissioned by the American University in Cairo (AUC) School of Business entitled “What motivates social entrepreneurs to start social ventures? An exploratory study in the context of a developing economy” attempts to understand the evolving role of value-focused entrepreneurship in developing countries. This includes Egypt. The paper also looks at the reasons why people would pursue entrepreneurship amid the precarious socioeconomic conditions.
The paper was co-authored by Seham Ghalwash, Ahmed Tolba and Ayman Ismail and is published on the website of Emerald Publishing.
Enterprises motivated by religion and culture
First, the paper starts off with defining social entrepreneurship as community-centered enterprises that infuse entrepreneurial skills and business knowledge in order to create a measurable solution to a societal problem.
Besides the common motivations that are shared by most social entrepreneurs across the world, such as compassion, personal experiences and individual inspirations, the paper describes religious and cultural beliefs as one of the key driving forces behind philanthropic entrepreneurship in Egypt.
The idea of giving back to the community through charity and helping the needy is often seen as a religious mandate – a key driving motivator for the entrepreneurs to take up a purpose-driven approach and addressing social and economic inequalities, it postulates.
Perseverance and network as recipes for success
According to the paper, perseverance is a must-have quality for entrepreneurs engaging in philanthropy entrepreneurship in Egypt. It alludes this to the provision of institutional challenges that can face entrepreneurs, including bureaucracy, corruption and the lack of proper government support.
The paper highlighted the importance of having strong support systems and business linkages that a social enterprise can leverage on in order to successfully get off the ground in Egypt.
Based on authentic accounts of successful social entrepreneurs, the paper explains that strong networks and a well-established reputation can shape up to be a fix to the financial strains that they face during the early stages of their startup.
“Intangible resources are critical and key motivational drivers to the success of innovative social enterprise. They give legitimacy and therefore help assemble other capital resources, such as finance,” the research adds.
Supporting social entrepreneurship critical for long-term development
Given the important role that social entrepreneurship plays in providing the foundation of long-term socioeconomic development and thus, pushing the Egyptian economy forward, the authors emphasize the necessity of encouraging governmental organizations and officials, as well as non-governmental investors and donors to invest in high-potential emerging philanthropists in developing countries.
In terms of policy, the paper stresses on the importance of fostering an institutional system that would enable promising entrepreneurs to properly function, deliver their services to the society on a wide-scale range and eventually be effective economic agents.
“Policymakers should encourage motivated social entrepreneurs with potential to succeed [in order] to tackle ‘top-priority’ social causes in the country,” the paper concludes.
Social entrepreneurship: a nascent field of study
“Social entrepreneurship is at an exciting stage of infancy, short on theory and definition, but high in motivation and passion,” it adds, explaining that social entrepreneurship is found to be a novel subject of study and analysis.
As far as developing countries are concerned, the paper says that little research has been done on social entrepreneurial activity and the relevant “local context” in developing countries – which can put a drag on the growth of such enterprises.
Speaking of the traits of social entrepreneurs, the study explains that they are mainly driven by creating societal value, while traditional entrepreneurs are motivated by profit.
Nevertheless, both of them share similar personal attributes, such as risk-taking, the ability to innovate and think outside of the box, determination, grit and commitment.