2024-07-11 09:21:20
Impact of social businesses
Social business is the foundation of a prosperous and empowered society. “The increasing need for social business and the strengthening of the social business community and the challenges of the recent period create incentives to make urgent decisions. Social business plays an important role in creating jobs and integrating vulnerable groups of society into the labor market, ensuring industrial development and empowerment, retraining and upskilling. Thanks to social business, the effects of the economic crisis can be minimized in various economic sectors and ecosystems,” V. Bražiūnaitė is convinced.
According to V. Bražiūnaitė, the practice of foreign countries shows that only thanks to the efforts of all the main participants of the ecosystem, the social economy can develop successfully and create added value for the entire economy of the country. At European Union level, there are over 13 million people who work in social economy enterprises. During the economic crises of the last decade, social business has shown a remarkable ability to contribute to the strengthening and building of societal resilience and has demonstrated the ability to manage fundamental changes.
“Organizations in this sector outperformed other sectors and created over 12 percent jobs in the EU, while simultaneously solving the main problems facing society. In other countries of the world, the idea of a business that is closely related to societal challenges is also popular and especially appreciated and encouraged by the authorities. The enormous added value created by organizations in the social business sector has long attracted foreign countries such as Canada, Singapore, Israel, etc. attention”, comments V. Bražiūnaitė.
Challenges of social business
Unfortunately, social businesses in Lithuania face various challenges. “There is a noticeable division, lack of stability and transparency in making decisions related to social business. The EU investment application assessment and administration system is too complex and too bureaucratic for social business practitioners. What’s more, there are no financial means for social startups to test (verify) social innovation and assess its suitability for a specific context”, V. Bražiūnaitė states.
According to the head of LISVA, social business lacks a cultural foundation in Lithuania, as it is still a relatively new form of activity. Therefore, a recognizable social business identity is also missing. This is partly due to the lack of a unified strategy or understanding from state institutions. Targeted financial incentives of state institutions would encourage more frequent mention of the concept of “social business”. It would also be useful to have a positive public attitude towards social business, support, evaluation, which forms the awareness and good reputation of social business.
“Social business, operating in its expert area of social impact, often lacks the internal resources necessary to develop a successful business model: investments in testing and refining activities, offering services or products, increasing brand recognition, consistency in impact measurement, and also lacks time and skills for advocacy “, V. Bražiūnaitė shares.
What should be changed?
Considering today’s situation and analyzing possible challenges, before the upcoming Seimas elections, LISVA submitted proposals to political parties to strengthen the development of the social business sector in Lithuania.
“We recommend involving social partners more in decision-making related to social business. It is suggested to initiate the establishment of the Social Business Council, which would be composed of state institutions and bodies, representatives of umbrella organizations and representatives proposed by the Association of Lithuanian Municipalities. It is also important to ensure that social business, as an activity that solves the challenges facing our society, is comprehensively included in the country’s strategic documents, EU financial period plans and economic aid plans,” says V. Bražiūnaitė.
V. Bražiūnaitė points out that it is important to promote the emergence of financial instruments for social startups, so that they have the opportunity to experiment and test (check) social innovations and assess their suitability for a specific context. The current measures are isolated, they lack complexity and context, because they were constructed without consulting the social partners.
Also, the head of LISVA notes that one of the suggestions is that, in addition to appropriate regulation and promotion measures, it is necessary to strengthen entrepreneurial competences, mobilize the community and provide permanent mentoring services on investment, development, impact measurement and other relevant issues. Therefore, it is proposed to promote the capacity building of mediating organizations providing such services for social business.
2024-07-11 09:21:20