Global State of Social Enterprise Report

But what are social enterprises? As far as the definition is concerned, there are still major differences in what different players in the sector understand by this. The current report aims to change this and standardize the understanding: According to its definition, social enterprises are founded with the aim of solving social and/or ecological problems, and therefore, prioritize purpose over profit. Nevertheless, at least part of their income is generated from economic activity. Social enterprises then reinvest the majority of their profits in the purpose of the organization. The extent to which they finance themselves more through their turnover or through investors and other external funding can vary considerably.

The key findings of the report were first presented at the World Economic Forum in January 2024. There is great interest in the data, as it indicates the astonishing strength of the sector. With a turnover of USD 2 trillion, the sector already accounts for a larger share of the global (labor) market than the clothing or advertising industries, for example. These findings lend even greater weight to the demands for increased financial and political support.

By focusing on solving social problems, social enterprises contribute directly to achieving the Sustainable Development Goals (SDGs). They operate in a wide range of sectors, from agriculture to the health and financial sectors to the IT industry. Well-known names in Germany include the search engine Ecosia, the energy transition company Polarstern and the cell phone manufacturer Fair Phone. What the more than 10 million social enterprises have in common is that they reinvest part of their profits, regardless of margin and company size, and thus contribute directly to sustainable social change.

To provide reliable guidance, data on social entrepreneurship from more than 80 countries was compiled and analyzed in a uniform manner for the report. The aim is to inform decision-makers and potential investors about the previously underestimated contribution of social enterprises to national and global GDP, employment and the SDGs. It also aims to help standardize the understanding of social entrepreneurship through definitions and survey standards. Companies can now refer to this in order to position themselves credibly as social entrepreneurs. Such an overview also helps impact investors with orientation.

One of the key messages remains: More financial and political support is needed for the sector to continue to grow. Reliable data is crucial here, for example, to support political decision-makers to allocate resources for impact. It will therefore continue to be important to monitor developments in the sector so that it can act as a driving force for positive change.