RECON presents an X-ray of social entrepreneurship in Colombia from a survey applied to 500 social entrepreneurs from all regions.
RECON, with the support of Sweden, carried out the second survey aimed at social entrepreneurs in the country, applied to more than 500 social entrepreneurs. The aim was to identify the status of this business model that is growing in Colombia and in the world, and is becoming an engine to promote social, environmental and economic development. The information collected allowed obtaining data that reflects the opportunities and strengths, as well as the weaknesses, challenges and difficulties faced by social entrepreneurs in the country. The results will be shared on December 4, 2020 at the II Summit of Social Entrepreneurship in Colombia organized by RECON and which will be held digitally at: https://summit.reconcolombia.org/.
Status of social entrepreneurship in Colombia
According to the results of the survey, all social enterprises work for the benefit of vulnerable populations in the country such as children and adolescents (57.7%); women (45.2%); rural population (34.2%); older adults (27.9%); victims of the armed conflict (23.1%); population with disabilities (16.7%); indigenous communities (16.1%); LGBTI population (15.4%); Afro-descendants (15%); ex-combatants (10.4%) and refugees or immigrants (4.3%).
Their work is carried out by Education (24.4%), Environment (21.1%), Peacebuilding and Human Rights (15.4%), Orange Economy (11.7%), Health and Well-being (8, 7%), Agrarian development (6.4%) and Gender equity (3.2).
45.5% of social entrepreneurs are between 18 and 35 years old, which indicates the great interest of young people in generating social changes and, at the same time, social and economic development, through social entrepreneurship.
It is a business model that contributes to inclusion, gender equality and the economic empowerment of women, which is evidenced in that 54.8% are led by men and 45.1% by women, a 1: 1 ratio unlike of the 2: 1 ratio that occurs in conventional entrepreneurship. And in terms of job creation, 55% of its employees are women, which eliminates inequality gaps between genders in access to employment.
In relation to the formalization of these business models, 44.6% of social enterprises in the country are informal. Of those formalized, 43% have been established as mainly non-profit entities and only 14.2% as commercial companies.
In relation to the formalization of these business models, 44.6% of social enterprises in the country are informal. Of those formalized, 43% have been established as mainly non-profit entities and only 14.2% as commercial companies. Becoming one of the main barriers to its growth and sustainability, evidencing the need to recognize it as a sector of the economy.
Follow the news of El Espectador on Google News55.7% of social enterprises do not pay any taxes. This indicates the level of informality in the sector and the urgent need to promote the recognition and formalization of social entrepreneurship. Likewise, 43.1% consider that the registration costs of the Chamber of Commerce are high. The high costs of formalizing are a negative incentive for social entrepreneurs to remain informal.
Regarding training, 69% of social entrepreneurs are professionals and 14% of them have postgraduate degrees. However, 59.7% do not earn any income from their social entrepreneurship and 36.7% earn less than 2 times the minimum wage. They get little pay for the work they do.
31.4% operate in areas where there is a presence of illegal armed groups, 22.5% stated that they were inspired by the conditions of violence and conflict to start their projects and 95% consider that it contributes to peacebuilding and post-conflict through of their social enterprises.
Regarding the resources for the development of their social entrepreneurship, 42% are driven by their own resources from their leaders or partners. Likewise, 15% use state acceleration funds and private investments. Only 20% of the sale of products and / or services, a percentage that shows that very few have managed to be profitable and sustainable.
In relation to the financial system, 66.2% of social entrepreneurs consider that there are no adequate lines to support this type of business in the country and 18% have had difficulties accessing the financial system due to lack of legal status, guarantor, credit history or warranty.
Although this type of undertaking provides solutions to social and environmental problems and at the same time generates economic and social development in vulnerable communities, it is still not recognized in Colombia and needs the efforts of both the public and private sectors to be strengthened.
Social entrepreneurship, a business model that is not given importance in Colombia
For Andrés SantamarÃa, director of RECON, social entrepreneurship is a business model that must be recognized as a sector of the economy, which stimulates it and contributes to sustainable development. “Being recognized implies a legal, juridical and normative framework that establishes the guidelines and conditions for the development of this social business model.”
“We have found that social entrepreneurship contributes to the economic development of countries and would be the way for the economic reactivation that Colombia needs, it is time to discuss how sustainable economic and social development can be promoted from this business model”, said SantamarÃa .
The director of the entity argued that the global figures show that social entrepreneurship can become a catalyst for GDP and a driver of sustainable and inclusive economic growth. A study by the British Council indicates that social enterprises represent 10% of the GDP of France, 15% of the GDP of Italy, 15.9% of the GDP of the Netherlands and Belgium. In the European Union they generate 11 million jobs and in India it is estimated that it generates some 38 million jobs.
In Colombia we can still measure this because we do not have the elements to do it, because it is not recognized as a business model and we do not have formal instruments to give an argument, however, a study by the Governance Center for Ibero-American Change indicates that businesses in the fourth sector, which are companies with a purpose, represent 2% of GDP in Colombia.
With RECON, we have carried out the exercise of surveying social entrepreneurs in order to determine the state of this ecosystem in the country and learn how this business model is developing.
Conclusions and Recommendations to strengthen the Ecosystem of Social Entrepreneurship
• In Colombia there is a great capacity for social innovation in all departments.
• Social entrepreneurship is not recognized in Colombia as a business model.
• Social entrepreneurship in Colombia can become a great driver of the economy
• The lack of public policies and regulations associated with promoting and making social entrepreneurship sustainable in Colombia generates that:
1). That social enterprises are not profitable and sustainable. 80% of social enterprises live on donations and contributions, they have not been able to market a product or offer a service.
two). That the territorial and community development in vulnerable regions be stopped where the appearance of social enterprises becomes an alternative to replace the absence of the State. 100% of these initiatives work with vulnerable populations, providing opportunities for social transformation.