Author: Andre Wongtschowski
Publication Date: May 2015
ISSN: 1474-3280
Governments, the private sector and the third sector fail to provide essential, life-changing goods and services to a substantial share of the world’s poor, causing the bulk of humanity in the lowest tiers of the economic pyramid to lack access to affordable critical goods and services that could play an important role in improving their livelihoods. Social enterprises, organisations that rely on the proposition of mutual value creation – the provision of valued societal returns to local communities and the production of acceptable economic returns to their investors – have emerged as alternative models capable of sustainably bridging this gap. Recent literature is filled with praise for social enterprises. However, a meaningful exploration of their impact on poverty alleviation has lagged. Acknowledging this gap in the literature, and using the capability approach as an analytical framework, this paper investigates the extent to which social enterprises are effective agents of development. The findings suggest that, while social enterprises systematically create opportunities for the expansion of a range of central human capabilities, they are only part of the solution.