Approximately 1 million social enterprises are working across Southeast Asia. The Asian Development Bank (ADB) defines a social enterprise as “a business-oriented not-for-profit, or a mission-oriented for-profit enterprise. It has a social or environmental mission – or both – at the core of its work and seeks to operate in a financially sustainable manner.” Social enterprises can, therefore, provide opportunities to mobilize private sector investments for the public good by improving livelihood and expanding access to essential services, leading to better quality of life and socioeconomic status.
In the tourism sector, social enterprises have great potential to transform visitors’ experiences by enriching their understanding of the host communities, their culture and surrounding environment. The predominant business model of many tourism social enterprises is to offer cultural experiences to generate profits from visitors, which will then be distributed and reinvested in the involved communities from the supply side – including marginalized groups.
In the GMS, there are relatively few legally recognized or accredited social enterprises while government support also varies significantly across member countries. Currently, only Thailand and Viet Nam have legal definitions, legislations or accreditation schemes. In Thailand, the Master Plan for Social Enterprise Promotion was developed for the period 2010–2014 with the Thai Social Enterprise Promotion Board, chaired by the Prime Minister, and the Thai Social Enterprise Office was also founded in 2011. A social enterprise act was also passed in 2019, which gives tax breaks and other incentives to registered ventures. Meanwhile, Viet Nam’s Enterprise Law in 2015 recognized the term “social enterprise” as a distinct type of organization and set out favorable conditions for organizations and individuals to establish social enterprises, including investment incentives and access to foreign non-governmental aid.
Since most social enterprises are small, they face similar challenges to other micro, small and medium enterprises to grow and scale up. These include access to finance, regulatory burdens and costs, skills shortage, poor enabling environment, and a lack of access to support and advisory services. Other critical issues relate to internal capacity in key business areas such as management, recruitment, strategic planning and marketing. When social enterprises come out of the not-for-profit realm, they subsequently have a strong commitment to social justice, but less savvy in business skills and entrepreneurship.
Like most businesses, social enterprises have been hit hard by the COVID-19 pandemic, particularly hospitality- and tourism-related ones as international travel was disrupted in all regions. However, many of them remain resilient and have been central to relief efforts by adapting their business models to constant changes and providing essential services to communities in need.
Recently, governments in the GMS have made concerted efforts to boost the support for social enterprises with a proliferation of incubators, capacity building initiatives, and networking opportunities. New and innovative financing mechanisms have also been introduced to help them tap appropriate funding sources and scale. The increasing awareness of social enterprise forms and their contributions to community development could further encourage a robust pipeline of impact investing opportunities in the region.
The Mekong Tourism Forum 2022 features an expert-led panel discussion on “Social Enterprises: A Purposeful and Powerful Tool for Sustainable Tourism Recovery, Development and Promotion”, moderated by Catherine Germier-Hamel, CEO of Destination Mekong. This session will bring together 8 industry leaders to share insights and perspectives on how social enterprises can offer a desirable business model for the inclusive growth, environmental sustainability, and positive branding of the destinations.
Don’t miss this opportunity to meet and join discussions with regional tourism experts. See full list of MTF 2022 speaker lineup at: https://mekongtourismforum.org/programme/.