Social entrepreneurship is a powerful and growing movement shaping South Africa’s economic landscape. While traditionally linked to urban centres, this purpose-driven type of entrepreneurship is starting to impact peri-urban and rural areas; addressing community challenges around infrastructure and social development in particular. With South Africa facing record unemployment rates, particularly among the youth, social entrepreneurship is bringing hope and unlocking new possibilities for some of the most vulnerable in local communities. Corporate support for these enterprises is critical for their success and sustainability however, even though they might not be a traditional fit for supply chains. Julian Singonzo, Premier FMCG Managing Executive: Sustainability, argues that this is challenging corporates to think differently about their own responses to building strong local communities.
Social entrepreneurship is on the rise globally – with South Africa no exception. “The most recent Global Entrepreneurship Monitor report[1] shows an increase in social entrepreneurial activity, with over 7% of local entrepreneurs now engaged in businesses that focus on social and environmental issues,” says Singonzo. “This is linked to growing data showing how these purpose-led SMEs are positively impacting day-to-day on-the-ground challenges negatively affecting the most vulnerable, including access to education, healthcare and large-scale unemployment.”
He notes that this is something Premier has seen firsthand this year through its flagship IWISA No 1 Community Champions competition.
Corporate responses to these initiatives need to evolve however, to actively incorporate them in supply chains: “Social enterprises often aren’t a ‘traditional’ fit for procurement departments and so find themselves redirected to CSI teams. Their social intent – a critical element of their value proposition – is misunderstood, preventing them from competing for commercial contracts despite often having the necessary expertise,” Singonzo explains.
Unlocking opportunities for these community-based SMEs should be a corporate priority, but requires a different level of commitment and innovation. “Corporates need to rethink procurement and supply chains, and the pipelines connected to these. Next generation procurement, marketing and branding teams must be developed and championed by leaders who understand the power of ‘doing business for good’ and the value this creates for consumers. It then becomes possible to unlock ‘responsible’ procurement as an extension of the corporate brand’s commitment to earn the right to operate; build and grow strong local communities; and deliver on its sustainability strategies linked to the SDGs.”
Creating platforms to showcase these SMEs, position them as upcoming suppliers, and expose them to opportunities is a positive starting point – something the competition aims to foster. “Having a business registered in an ‘outlying’ peri-urban area could be seen as a disadvantage by a corporate for example, as opposed to being ideally located in an area where the SME could create jobs if they could secure a long-term corporate contract. We need to proactively find ways to include more social enterprises in our value chains. This starts with exposing the benefits of working with them – beyond the bottomline.”
Singonzo adds that many social enterprises taking part in the competition this year also noted that they have development gaps – where they need structured intervention. Again here, this is because many of these SMEs don’t necessarily meet typical Enterprise and Supplier Development programme requirements. This means they can’t access programmes that they would really benefit from including critical training. This is one of the reasons all of our winners are in Cape Town at the moment undergoing a full week of in-depth training that will benefit their SMEs. The pitch and presentation training they received in the build-up to the competition has also equipped them to take their businesses to market in a more compelling and strategic way.”
With the rise of social entrepreneurship in South Africa, particularly in under-resourced areas, representing a shift in how communities can be uplifted and supported, more strategic integration of the SDGs and ESG frameworks could also fast-track procurement from these SMEs in the future. “Until then, we need to cultivate a different understanding of value and how that speaks to brand promise and commitment – and ultimately find new ways to unlock it,” he says. “For us the Iwisa No 1 Community Champion is just a start. While over R250K is collectively invested in the winners from the four regions (including prize money and training), we’re being challenged to do more around long-term sustainability and profitability.
“This is not a challenge we take lightly, and we are already brainstorming refinements for the next competition, including around partnerships. In the meantime however, we will continue looking for ways to support our 2024 winners and finalists as they build and grow their own communities, and champion the rights of some of the most vulnerable,” he concludes.
