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Social enterprises in need of support

Released at: 15:46, 29/08/2019

Social enterprises in need of support

Photo: Ngoc Lan

"Social Enterprises and Sustainable Development" workshop held on August 28 in Hanoi.

by Ngoc Lan

The main topic of discussion at the “Social Enterprises and Sustainable Development” workshop on August 28 in Hanoi was that social enterprises can be a model to create comprehensive socioeconomic values and positive development prospects if there are supporting policies to promote the development of the model.

Dr. Vo Tri Thanh, Director of Institute for Brand and Competitive Strategy, said that the concept of social enterprises is a new type of business that has appeared in Vietnam and been developing strongly in recent years not only here but also in many other countries around the world.

Vietnam currently has about 200 organizations considered to have all the characteristics of a social enterprise and there are tens of thousands of other organizations and businesses with the same characteristics. These are operating quite effectively, initially contributing to resolving social and environmental issues such as vocational skills training for children of poor families and ethnic minorities, giving them stable jobs and relatively high incomes.

However, social enterprises are currently facing many difficulties, such as a lack of capital and access to financial resources, as management capacity is weak. “These are inadequacies that need to be overcome to facilitate the development of this business model,” said Mr. Thanh.

In 2018, the UNDP, the Center of Social Innovation and Entrepreneurship (CSIE) at the National Economic University, and the University of Northampton in the UK released the “Fostering the Growth of the Social Impact Business Sector in Vietnam” report, the largest study conducted on the sector in Vietnam to date.

The report had 12 recommendations for supporting social impact businesses, which can be divided into four main topics. Firstly, support policies in accessing capital and other financial resources, which include developing stronger incentives using VAT and corporate income tax to grow the sector and develop specific criteria to define social enterprises, thus allowing more targeted financial incentives.

Secondly, support policies to develop market access and scale up social impact businesses, support for engaging with public procurement processes, strengthen connections between them and the wider private sector, and raise public awareness about the value of social impact businesses.

Thirdly, regarding capacity building, the report suggests government officials promote the sector, develop e-learning platforms, and establish incubators and accelerators.

Finally, coordination should be increased to promote training on social innovation and entrepreneurship through education institutions. If possible, Vietnam should establish a government department focused on developing the social impact business sector and a representative network for the sector.

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