How Social Entrepreneurs Can Contribute to Equitable Growth in the Middle East and North Africa

How might social entrepreneurship contribute to a more competitive economy in the Middle East and North Africa (MENA), while promoting sustainable development, social justice and equity?

That was a question asked earlier this year by panelists at a development marketplace brown bag lunch at the World Bank. (They asked the right question, according to the Harvard Business Review.) The event, attended by nearly 150 people from various development organizations, had two main objectives: first, to gain a better understanding of the challenges faced by social entrepreneurs, and, second, to identify areas of potential intervention, synergy and collaboration between innovators in the MENA region.

Iman Bibars, a featured panelist and regional director for Ashoka Arab World, said the lack of public awareness about social entrepreneurship (and the benefits that citizen sector organizations can bring to communities) is hindering equitable economic growth in the region. Ross Baird, executive director of Village Capital, called it a branding, messaging and communication problem—recruiting “social entrepreneurs” is difficult because the start-up sector doesn't fully understand the term. That challenge is relatively easy to overcome, however, as Baird noted. Just brand “changemakers” as early-stage entrepreneurs with a focus on [insert pressing social issue here]. (Hey, it worked in Beirut!)

And while the public is skeptical about the growing social good sector, the government is generally unsupportive, as evidenced by long delays in approving licenses or funding for nonprofits and small businesses. Afeefa Syeed, senior culture and development advisor for the Asia and Middle East bureaus at the U.S. Agency for International Development (USAID), agreed. Syeed said the bureaucratic red tape and inefficient licensing and regulatory procedures are creating a barrier for entry for aspiring social entrepreneurs.

The lack of quality education is also an obstacle to change in MENA. The International Finance Corporation's (IFC) Magdi Amin called for reform to enable students to take control of their lives and create positive impact in the community. There are more than 17 million illiterate Egyptians (about a fifth of the population) and a significant number of unemployed graduates. Michael Tarazi, senior policy specialist at the Consultative Group to Assist the Poor (CGAP), noted that youth unemployment is up to 18 percent in the Middle East.

Tarazi also raised the issue of financial inclusion. The limited access to financial services and high unemployment rates were contributing factors in the Arab Spring, he said. And MENA currently ranks last of the six regions reviewed in the World Bank's Global Financial Inclusion Database (Global Findex). There is potential for the tech sector to address the needs of the unbanked, particularly through mobile phones. However, in Egypt, branchless banking service providers are still waiting for approval from several government authorities, including the Egyptian Ministry of Communications and Information Technology (MCIT).

Despite these challenges, there is opportunity for economic growth and systems change in the MENA region. Every panelist cited collaboration between government, the private sector and civil society as a key catalyst in achieving the region's social, economic and political goals. Collaboration lies at the heart of social entrepreneurship, so how can we make it happen? The first step is surely educating the public about new business models. The meaning of social entrepreneurship isn't always clear, but it's not simply jargon either. Social entrepreneurship is the future of business.

Check out the full report for more about how social innovators can create a more competitive economy in MENA.