"Social enterprise" is the term used for business entities that seek a balance between making profits and helping others.

Indonesians are perhaps familiar with the concept as applied to cooperatives. In the United Kingdom, however, social enterprises have grown into one of the most important sectors in the country's economy.

A UK expert on social enterprises, John Pepin, visited Indonesia recently at the invitation of the British Council to promote community entrepreneurs and social enterprises.

Pepin's schedule included taking part in a discussion on a book on social enterprises - The Power of Unreasonable People: How Social Entrepreneurs Create Markets that Change the World - at Bina Nusantara University in Jakarta and talking about social enterprises in the UK with young people in Jakarta and Bandung.

"A social enterprise is where you set up a business that achieves two ends: Social, like alleviating poverty, and economic, like creating jobs. Sometimes it has a third end like environmental," Pepin said.

As an example of a successful social enterprise in the UK, he cited Belu, which creates sustainable water bottles from corn that degrade within 12 weeks, making it an enterprise that helps the environment.

Pepin said a social enterprise was a business, as it generated some profit, but that the social return was always balanced with the financial return.

He provided another example from the UK of a charity set up for disadvantaged young people. "They are a contractor company, hiring and training young people who might end up in some trades like electrician, carpenter," Pepin said.

The contractor helps teach young people life skills, how to work; they also develop self-confidence. "The construction company has to make money to pay for all this at the same time as helping young people," he said.

In a number of ways, a social enterprise shares similarities with common small- and medium-scale enterprises (SMEs). "They are commercial; they have to at least break even if not make a profit," Pepin said. "The difference between a social enterprise and an SME is that an SME maximizes profit while a social enterprise seeks a balance between profit and social ends. They generally don't maximize profit."

A social enterprise does not have shareholders to whom it has to pay dividends. Any profit is invested back into the company to continue its work or to help others.

On its website, Belu announces that all its profits go to providing access to clean water in the UK and across the world. Their first project was to install wells with hand pumps to provide clean water to 10,000 people in Tamil Nadu, India. Part of the profits also went toward a "rubbish muncher" on the river Thames in London, which can remove 45 tons of garbage in a year, according to belu.org.

"The UK has a long history of social enterprises, starting from cooperatives and the third sector, which comprises nonprofit organizations and charities," said Pepin. "They were basically set up to help people who had nothing for them. It's a long process but it's thriving now. There are 55,000 of them in the UK. The income they have is about 27 billion pounds sterling."

The enterprises also directly employ 650,000 people, mostly in urban areas.

Pepin, who has two decades of experience in social enterprises in the UK and his home country Canada, said the main problems usually faced by such enterprises are human resources, as many workers in social enterprises did not have business skills, and financing.

"If you want to scale up, there's no money to do that. In the UK, the government and the corporate sector provide funds to help them," he said.

But these enterprises do not suffer from a shortage of ideas or creativity, he said. Many social enterprises are set up by creative, innovative individuals with strong values and ideals who are willing to take risks.

Although such enterprises can exist even in an environment with little government or corporate support, with the right support or infrastructure, they can thrive.

Pepin said many big corporations in the UK had corporate social responsibility programs that were direct linked with social enterprises. "You have a lot of companies that would invest in the community."

- Evi Mariani

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