#5: What is social entrepreneurship? A talk with Katri-Liis Lepik (Tallinn University, Estonia)

[Music] So welcome to a new episode of our ScreenMe podcast, where we delve into the world of screen media entrepreneurship. My name is Ulrich Oron, I'm professor of media management and media economics here at Talent University. And in our last episode of the ScreenMe podcast, I spoke to Britta Gossel from Germany. She is from the Ebersvalde University for Sustainable Development, where she also teaches sustainable entrepreneurship. I had a chat in the last episode with Britta about sustainable entrepreneurship. And following that talk with Britta, I thought it would be also great to discuss about social entrepreneurship. And in this context, I'm very happy and also lucky that we are telling university we have an expert, an international expert on social entrepreneurship. It's Katrilyse Lepek. She's associate professor here at Talent University, and she's also herself a social entrepreneur. And she leads the English language MA study program social entrepreneurship. This podcast, as all the other ScreenMe podcast, are supported by the Horizon 2020 ScreenMe project funded by the European Commission. So welcome Katrilyse. Yes, hello. Thank you for having me. Katrily, you have a startup, a social entrepreneurship startup. Tell me about it. Yeah, well, the social entrepreneurship is my passion. And actually, this social enterprise has been started by other people. So I'm not one of the founders there, but it was started in 2013 already in England. And I joined it quite quickly after it got established. And I ended up doing it because I realized that I would like to really have some impact on actually people who have problems, and I could actually help them in the society. So that led me joining the social enterprise which works with ex-offenders. And the ex-offenders provide environmental maintenance services. So we are actually trading and selling the services to local governments, to other private entities. And they are doing all sorts of work outdoors. And by doing this work, so they definitely get employability skills. They get social skills. And the whole idea is that they would not reoffend. And they get, again, integrated in the labour market. So, yeah, that's the main mission of that social enterprise. What are environmental maintenance services? So there would be jobs in the woods in the parks. So that's like cleaning parks, litter. Then trying to also clean the puns and rivers. Yeah, even up to making some fish pass. And also some recreation of purposes and pass in the nature. So a lot of this sort of up to construction work, like being subcontracted by big construction corporations. So what came first? The passion as you call it for social entrepreneurship or the startup. And then through the startup you developed the passion. I mean, I always thought that being in consultancy business, I had the opportunity to put together a lot of applications for funding and grant funding. And I realized by doing it that a lot of money gets spent on services and activities around the actual beneficiaries. So other people are not necessarily ending up with those particularly in need. And that was really the driver for me to look at the opportunities, how I could reach the end users and really make a difference in their lives. So I think that's sort of a passion came first. And then I had by that time already established cooperation with the UK partners and that led to the fact that I joined that social enterprise and then started contributing there. And that also led to the fact that I participated in the brainhunt competition in Estonia when I established the branch of that company in Estonia. So here it is in the form of an NGO. But that also was quite interesting that we actually ended up in the brainhunt competition in the top 30 twice with two different social initiatives. So one of those being this same work with ex-offenders, but another one was devoted to waste, food, topic and how to reduce food waste. So for those who might not know what is brainhunt competition, well brainhunt competition is as as some sort of a startup competition which is quite well known in Estonia because the finalist end up on TV and they end up competing in front of the jury and the wider public. But they also receive a very extensive training program during the time they develop their startup. But then again, yes, there is a final competition on TV and then they get awards and definitely a lot of recognition once they are in the top 10. What is actually social entrepreneurship? Social entrepreneurship is definitely a form of business, but the mission comes first, which means that social entrepreneurs want to solve some societal or environmental problems. I mean solving it is rather ambitious, I would say, that mitigate those problems would be more accurate way of saying it. And when we talk about social entrepreneurship, we definitely have to talk about adding social value to the business. And not only that the positive mission is important, also when we think about business, you obviously also make money. So it means that it has to be sustainable and viable. So the business model has to be there. You still have to trade and you have to sell services or products to actually be sustainable. But what is different from the regular entrepreneurship is that you actually reinvest most of the profits back to that particular social enterprise or actually fulfilling that purpose which you originally wanted to start mitigating. So yeah, you're helping to find some solutions through your social enterprise to those problems. And it's also important that we think about the governance models in addition to the actual business model. The idea is that it would be inclusive in the sense that the governance should be transparent and as much as possible, the target group or the end users, the beneficiaries should be part of the governance model. And when it comes to the business model, then an ideal version of a social enterprise would be the one where there is an asset lock, which means in practice that it is defined by the statutes of the social enterprise that the owners do not take dividends, but indeed they reinvest the profits to fulfill their purpose. How common is social entrepreneurship? I would say it's a very interestingly growing movement. It's a global movement. I would call it a movement. It's gaining more and more interest by various sectors and by people. So when we think about the numbers, then there are approximately 11 million social enterprises across the world. So that was the research which was done by the British Council and social enterprise UK, recently. But when we think about the different parts of the world, then it varies because the context vary, the social entrepreneurship ecosystems or the environments where it's It can grow, they vary a lot. And when it comes to Stonia, then we have in the social entrepreneurship networks database, we have about 240 social enterprises right now, which isn't a lot. But it is related to the issue that we do not have a legal forum in Estonia for social enterprises specifically. And therefore, it's more like self-identification that I kind of assure you that I'm a social enterprise, but obviously I need to also showcase it by the statutes, which would clearly then feature what the social mission is. And the social enterprise network in Estonia also follows the usual traditional characteristics of social enterprises, agreed in the European Union. And that would mean that they are social, they follow the mission, they also have the transparent governance, and they are economically sustainable, or they provide services and sell products. So you mentioned the different, like the special characteristics of the government and the business model for social enterprise. So for them to be able to call themselves a social enterprise. But who sets or who set these criteria? So in a number of countries, there is actually a particular law for social enterprises. So they take a legal form of a social enterprise, and they can be registered in the business register, like in Estonia, we have the social enterprises mostly in the form of non-profit organizations, or they can also be in the form of limited liability companies. But here they are mostly non-profit organizations. But there are also various labels and certification systems in the countries which have established themselves, sorry, the labels have been established on the national level, and then the social enterprises have to fulfill certain criteria in order to get that certificate or label. But just recently I came from the social entrepreneurship world forum in Amsterdam, and they launched their verification scheme for social enterprises globally. So they are going to verify, according to their criteria, whether the social enterprise is qualified, and they cooperate also with social entrepreneurship networks in each country to verify the companies. As an entrepreneur, why would it be important to get verified? What does it bring along? Why cannot I just have a good social mission and run my operations? Why this verification? I think that the verification is needed like any other certificate in order to be able to showcase that you actually truly follow those principles, but it would also make it easier for your cooperation partners to understand that if they would like to invest in the company, or they would like to cooperate with that particular company that they can be sure that this truly is following those positive impact-driven ideas. And it would be also important since I mentioned the impact that the social entrepreneurship means that also the companies should be measuring their impact and also being transparent and public about it. So I can say that these times when we look at various surveys about the customers and about the generation Z as well, that they are more and more interested in where they work as employees and they are also interested in the mission of their organizations themselves and also what they buy. So for them it is growingly important to understand that those companies they work for or the products they buy are being made and delivered by organizations which actually contribute well to the society at large. So you run a social entrepreneurship, a study program here at Tallinn University. Tell us about it. Yes, I love to say that indeed I teach what I preach and I think they are very much interlinked that it is really good to, in a way, research myself this field and then see whether it works in practice and vice versa, bring the examples from the, so to say, real world to the academia. And the program itself has been designed as a project based program which means that we want to keep it more of a practitioner-oriented program so that the students who come to our MAP program would finish with their own either social enterprises or some mission initiatives and projects. So the idea is that we mentor them, we support them during two years to come up with their own social enterprise idea and then actually launch it or they can come with an already existing enterprise and they can get support and ideas and mentorship and then they can expand hopefully their social enterprise from whatever country they come from. When they develop an idea through the course of the program, do they do this in teams with other classmates or does one student have one idea and one enterprise? How does that work? So the project based learning can combine both elements. So the idea is that they would do a lot of cooperation and teamwork also with external partners because Estonian in a way, the startup ecosystem in general is vibrant and dynamic and we have a lot of other opportunities and hackassons and various labs and hubs which allow the entrepreneurs to find other interested partners and also find some interesting interdisciplinary cooperation partners so they can start with their own social entrepreneurship idea and then they can find and include other students or other partners across Estonia into their project or globally as well because we also work a lot virtually too. And then they can also find some coursemates who do not have their very fixed idea themselves, they can also try to use the teamwork and the ideas of their co-students so that they could develop their ideas better. What do you say are the key learnings that they take from this class or from this course? From the whole program I would say that they have definitely benefited from various interactions that they do have to actually try out what it feels like to, for instance, pitch their ideas to the external audiences. It might be investors but it might be also public sector partners if they need them for expanding their social enterprise. So they also receive help from a lot of other mentors so in that sense they not only hear from the permanent stuff of the university but they also can actually have a lot of interaction with practitioners in the field because we include both practitioners and researchers globally in our program and I think that has been also a key success factor that they have those opportunities to receive mentorship as well as really practice teamwork with a variety of people from all the different ethnic and geographic backgrounds and disciplines. That's always an advantage especially if you want to maybe develop empathy if I can say so. Then if you want to actually understand the world better then the more sort of diversity you have around you and the more you can actually have those interactions, the more you really learn from them in order to develop your own and the price better. You already kind of mentioned the setting, the ecosystem, startup ecosystem in Nostonia, but maybe you can elaborate this on this a bit more. How the students coming up with ideas here, developing ideas here, the program being at Tallinn University in Nostonia, how does the location here in Nostonia impact influence their activities? When we talk about the advantages of the Estonian ecosystem, then I think that generally entrepreneurship and entrepreneurial thinking is supported in Estonia and it's really addressed positively by and large and the startup community is growing and it's really dynamic and lively and there are a lot of events taking place, not just in Tallinn, in Tartu and increasingly elsewhere as well. When we talk about maybe the slightly negative size of the ecosystem because obviously we can't not talk about finance and that's really important and access to any type of finance especially for the startups is always necessary and we do have a lot of funding opportunities and grand opportunities for, so to say, traditional companies but we do not have them really available for social enterprises to that extent. Do they exist in other countries as well? Yes they do and what is definitely different when it comes to, let's say, comparing Estonia and UK, then the social investment market is absolutely booming in the UK and here in Estonia we basically have one foundation which invests in educational initiatives and that's absolutely fabulous as well. The Good Deeds Foundation has started its impact foundation but it is still very very tiny drop in the ocean of social investments and especially impact investment so there's a lot of space still. But do you see that this is developing in a positive way as a growing? It's definitely growing because there's more and more also traditional entrepreneurs who see the importance of giving something back to the university but also to the society at large and then also find their ways to invest in social enterprises and they just say that there are more companies who are willing to do that and Green Tiger being one of those examples which unite companies in Estonia which are really environmentally focused and they would like to see some positive changes in terms of their environmental crisis and then the climate change currently. I'm still thinking about your study programme so students have come up or they're already bringing in an idea of a social enterprise. Can you tell us an example of section enterprise? What have students developed? One of the our let's say flagships I like to bring out and showcase this is band books and this is a social enterprise which was developed by our Scottish students and he has developed it here in Estonia so he has opened a museum and a bookstore in the old town and he is doing podcasts, he's also training and teaching school children about the censorship and also clearly trying to address the issue of censored books in the world and censored speech and well promote free speech in general so this is a sort of an educational social enterprise in a way but but also definitely having this sort of a wider impact in terms of trying to address the importance of free speech and actually the lack of it in so many parts of the world. And it's called band books. It's called band books yes and people can visit there. It's museum and the bookstore during the weekends in the old times so yeah a lot of tourists do that and that's really a great one and there have been others which let's say a lot of the social enterprises again are found by females and that's also maybe a significant feature because I think that again probably has to do with the fact that that women do see the gaps in the system or faults in the system and they would like to then overcome them and and also have probably more empathy for groups at risk or vulnerable groups and we have had students who have established their social enterprises in the field of trying to teach about entrepreneurship to young also girls in the villages in the remote villages globally who would not otherwise have any access to education and who would not really be able to to maybe leave their villages without having this sort of education and and then also companies providing platforms and training programs for disabled people and and also maybe some examples from like an app in Bangladesh which helps farmers who are actually literate to see what's the help of the pictures whether their crop has some disease and what to do about it so it can take actually a variety of forums and and shapes and then bring change to those vulnerable groups especially from the perspective of the lecture our teacher educator teaching social entrepreneurship what do you think how does it differ from traditional entrepreneurship teaching what you need to take into consideration i think one of the really key features is ethics and everything around how to work with the source of disadvantaged groups because it means really bringing change to their lives but but that also requires a lot of time and and effort to really get to know what they actually need and and want and really a lot of time has to be devoted and co-creating those potential services or solutions together with them so i think there's a lot of more time devoted to to really thinking and understanding and again empathy in terms of getting to know your customers if we talk the business language but basically yeah the groups whose life you want to impact and and make better and that's that's clearly linked with unintended consequences which also might be there because i think that in a traditional business you don't necessarily think of everything around a sort of a context where your customers come from and what else can actually happen to them as a result of your particular service. Can you name examples of unintended consequences? Well the same example of those let's say younger girls in those villages that who then are being empowered and given certain skills which would help them also hopefully move out of their villages in terms of of getting some jobs but but that actually might change their family relationships extensively because they they are traditionally from the cultures where women should not necessarily be educated or actually have a job and and when you try to sort of intervene and then provide them the source of skills which might contradict their traditional cultural paths and norms. So you need to just like much more of an understanding understanding of the environment of the contacts that your idea will intervene potentially. But how do you teach these students? How do you teach empathic students and being aware of that there might be these consequences of their business idea? We use a lot of design, thinking in terms of those projects as well. And that means that we do analyze the contacts and the students are really made to think about what's the health of various tools and templates about how they address these topics in their social enterprises. So we do have the sort of multicultural discussions and also as I said earlier, the actual interaction with the people from so many different countries and backgrounds as we have in our program. So that also helps to already at least raise their awareness about the potential problems but hopefully at least the awareness is obviously the first step in this whole journey. But then again, once they choose their idea and they start working with the actual beneficiaries in the ground, so they also have to visit the customers and then the users talk to them and really create the solutions together with them and then you also have to during those courses establish cooperation with public sector organizations which are relevant for advancement of their business or for getting grants or initial support. And they also have to look at what other maybe traditional businesses are doing in the same sector and learn from those experiences as well. Very practical question. So when students take the program here in Estonia but their idea, their social enterprise might be in Bangladesh as an example. So they travel there during the program, right? And that's all on their expenses. How does that work? Yeah, so they come to Estonia and we think that it is not a very long time and I give a year to be away from your actual community so that you wouldn't put everything on hold for too long so that you gain those experiences and this international experience here in Estonia but you can still maintain some contact with your own community so that once you go back there after a year you can actually complete the program virtually then during the second year because the second year is mostly devoted to also field work which means that you can do that at home and also like methodology courses in order to help you better to compile the project thesis or master's thesis if you choose to do more of an academic thesis. What does the future for social entrepreneurship hold? I'm definitely very hopeful about the future and having just come back from the social entrepreneurship world forum and so that this is indeed a growing movement and as a growing movement is that also the corporate social responsibility agenda of those mainstream companies is ever more increasing and they are also understanding that they can fulfill their purpose by supporting social enterprises and actually using their products and services for their own business and benefit and this is definitely one of the ways how social enterprises can grow themselves because there's it's still a supply and demand market so if there are more tenders being directed towards social enterprises and if that becomes more of a criteria that whenever you organize a public tender or you tender for services and products you actually have to use the services as well as products of those companies which have their positive mission clearly stated and which actually measure their impact. So this sort of a public procurement market is definitely one of the ways to also enhance social entrepreneurship and I see that this still has a lot of potential at least here in Estonia but also in other countries growingly. Is there something that where you see right now in the current status quo that's not going so well in terms of social entrepreneurship and that needs to be fixed in terms of really fulfilling the potential that social entrepreneurship has? Coming back to the public procurement market I still see this as a vast opportunity and well it forms a substantial market so it reaches 13% of GDP and about 35% of the state budget in Estonia so this means that whenever public sector organizes those tenders there's a lot of potential to actually include the services and products of the social enterprises and that would definitely again also nudge the companies to start providing those more because currently in a way there's no that much of a demand but again the existing companies. Yes, the existing ones also to think about it more specifically who they employ whether they actually help the disadvantaged people to integrate in the employment market or whether they have some other societal benefits on top of the traditional business. Another aspect is definitely that the social impact investment market could and should be enhanced but that can be definitely only done by the current entrepreneurs themselves but also the public sector helping to establish some specific funds or promoting that impact amongst the existing traditional entrepreneurs as well. I see that there's a lot of space in terms of the social impact measurement that there are not that specific criteria which is being currently used and that could be still developed and agreed upon which kind of measurement tools and frameworks to use in order to understand better what the actual impact of the social enterprises could be. So there's still, yeah, I see a lot of space there to advance the market but also research and teaching education in general. Do you see that what you just mentioned is that Estonia unique element or are you talking about your pain level where the improvement can happen or should happen? Yeah, the improvement concerns European market in general because it's actually impossible for corporations to build their business model in the future without really partnering with social enterprises. And I see this tendency out there because people are demanding ever more the fact that business leaders would become accountable for also their decisions and when we talk about the environmental crisis and the climate change then there is strong willingness and need out there to also take responsibility for, let's say, the planet but the environmental problems as well and therefore it's going to be more attention to how businesses do their business and that would also highlight the need of really partnering with social enterprise. Is there anything else that you would like to share with our listeners? I would say that social enterprises do have the future. I think that social enterprise is really about fundamentally changing the way we mobilize capital and think about growth and also creating value so that it's not going to be a not just the monetary growth and the GDP growth, which defines what success is, but it's also more about what kind of social value is being created for everybody in that company and in the society. So I think that doing Gourid is really important and I think it's going to be really smart to actually do good as well. These are very nice last words. Thank you so much, Katarillis, for being here and for having this chat with me for the ScreenMe podcast. This is one episode of many episodes of the ScreenMe podcast. You will find us in all these possible podcasts, platforms like Spotify. Thank you, everyone, for listening until the next podcast.