The development of social enterprises has been a global trend for some time, but in some markets, such as Taiwan, there is an explicit focus on development of the ecosystem which has created a direct impact in the market.
In many countries, social enterprise takes the form of a business model with ‘shared value’ offering to contribute to alleviation of social and environmental issues while achieving sustainable business practices. This thinking encourages mainstream corporates, governments and investing organizations to drive comprehensive social innovation. Social innovation emphasizes connections between multiple stakeholders, applications of science and technology, and promotion of partnerships to achieve breakthroughs of social or environmental transformations.
Social enterprise is a familiar concept in the Taiwan market, with social enterprises covering highly diverse sectors, ranging from agriculture to boutique retail. With the common thread defining these organizations being the desire for profit as well as purpose – to make a positive impact on society under the UN Sustainable Development Goals. The form of these organizations can traverse not for profits (NPOs), start-ups, venture capital and businesses providing employment for disadvantaged groups of the population.
However, despite the prevalence of social enterprises in this market, they commonly face a number of challenges. According to the 2020 Taiwan Social Innovation Survey, typical challenges faced by social enterprises include financing, marketing, public awareness and personnel shortages.
From social enterprise to social innovation
To actively build and support the market, the Taiwan Government introduced an architecture for the market through the Social Enterprise Action Plan in 2014. As the market moved through initiation, development and maturation, focus moved towards innovation with a Social Innovation Action Plan in 2018. These pivotal policy drivers were designed to strengthen links with the international community and bring Taiwan in line with the UN’s Sustainable Development Goals (SDGs).
KPMG in Taiwan has been involved throughout this market building; engaging with the government to put social procurement at the heart of capitalism. A social enterprise service responded to the Taiwan Government’s plan and brought private sector expertise to support the business models of these organizations. This included development of financial and legal affairs, construction of operating models and expanding business lines.
In this work KPMG in Taiwan also supported the Small and Medium Enterprise Administration (SMEA) which is under the Ministry of Economic Affairs. By integrating the knowledge in business advisory and risk management, the social enterprise team developed a series of evaluation methodologies, starting from identification of social purpose and ending up with impact measurement, to incorporate the social innovative mindset in government and enterprises, as well as coaching the social enterprises with their business models.
By 2020, the team had counseled over 100 social innovation organizations and facilitated hundreds of collaborations among mainstream companies, industry associations, and social enterprises.
Social enterprise beyond borders
KPMG’s work with the Taiwan government has successfully fostered international collaboration through the Asia Pacific Social Innovation Summit and an Asia Pacific Social Innovation Partnership Award. These key events bring together social innovators and the learnings of regional social innovation development. The team has developed an international network to connect social innovation related organizations and stakeholders across 20 countries and territories in the ASPAC region, connecting Taiwan social enterprises with the international market.
As we look ahead to the future of the market in 2021, social innovation will continue to be at the forefront in a trend that, despite COVID-19, is gathering momentum. With increased clarity around the importance of local jobs, the value of social enterprise in fulfilling social needs and providing employment in a blended business model cannot be underestimated. More partnerships between big companies and social enterprises are expected which will scale up the social impact in the near future.
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The General Manager of KPMG Sustainability Consulting Co., Ltd. in Taiwan and the Regional Leader of KPMG Sustainability Services in Asia Pacific