Stanford research suggests increased role for social entrepreneurship in post Arab Spring countries

The Arab Spring has unleashed powerful social forces across the region ignited by young people seeking to reclaim their countries from the hands of long-standing dictators. In the aftermath of the revolutions, this younger generation has expressed a greater interest and responsibility towards improving their communities. Faced with crumbling economies and rising unemployment, young people in the region are combining their activism and entrepreneurial ingenuity to launch new businesses and non-profit organizations.

A new research study entitled, Social Entrepreneurship: Why is It Important Post Arab Spring? released by the Program on Arab Reform and Democracy at Stanford University's Center on Democracy, Development, and the Rule of Law finds that economic conditions coupled with social changes unleashed by the Arab Spring have created an environment ripe for social entrepreneurship.

Operating where the public and private sector have failed, social entrepreneurs introduce new ideas and approaches to solve intractable development challenges in their local communities. Applying business principles towards a social cause, social entrepreneurs create new programs, reforms, and goods that benefit disadvantaged and marginalized segments of society. Leading innovations in the non-profit and business sectors, they have generated new employment opportunities for youth, worked towards building more inclusive societies, and advanced sustainable environmental practices.

As more aid dollars flow towards social entrepreneurship programs, little research has been conducted to examine the sector post Arab Spring. Researchers with the Stanford Program on Arab Reform and Democracy launched this study to assess general economic conditions, attitudes towards entrepreneurship, and the challenges social entrepreneurs currently face.

The Stanford research team used data from an online survey issued in Arabic and English to more than 12,000 residents in 18 Arab countries by Bayt.com, the leading online jobsite in the Arab region, and YouGov, a research and consulting organization. The survey targeted respondents who are on average younger, better educated, and more technologically connected than the general Arab public—previous research issued by the Brookings Institution suggested that this target group is predisposed towards the entrepreneurial sector.

Citizen-led uprisings have inspired a new generation of youth who are increasingly invested in the future development of their societies across the larger region.

Youth-led social and economic development: One of the most revealing findings in the study uncovered the changing perceptions and attitudes of young people towards the long-term development of their societies after the revolutions. Citizen-led uprisings have inspired a new generation of youth who are increasingly invested in the future development of their societies across the larger region. In Arab Spring countries 71% of respondents in Egypt and 75% in Tunisia expressed interest in improving their communities, revealing this upward trend.

According to Jacqueline Kameel, managing director of Nahdet el Mahrousa, the first social enterprise incubator in Egypt, "Youth are more vocal than ever now, they have a sense of responsibility towards Egypt, believing that if we don't do enough now, we might never have a similar chance to take the lead and impact the future of Egypt." In addition, the survey found that volunteerism is on the rise with nearly one-third of Egyptian and Tunisian youth currently volunteering their time at local NGOs, religious establishments, and schools. These trends represent promising pathways towards social entrepreneurship for the region's youth.

Rising unemployment leads to increased interest in self-employment: The results revealed deteriorating economic conditions across the larger region, impacting all age groups and economic levels. However, the effect on countries that experienced protracted revolutions is particularly stark with 58% of respondents in Tunisia, 68% in Egypt, and 71% in Syria indicating that their employment situation now is either worse or much worse than before the revolutions. Those working in the private sector have been disproportionately impacted by the Arab Spring than their counterparts in the public sector, suffering higher levels of unemployment.

Despite this fact, respondents across the region expressed a strong desire to work in the private sector, reflecting a move away from the government as a primary employer. The survey also revealed widespread interest in business ownership as respondents in every country said that if given the choice they would opt for self-employment. While many cited the independence it would offer, others indicated they were drawn to entrepreneurship out of economic necessity, not opportunity. Current economic conditions and a move towards the private sector and business ownership point to the growth of the entrepreneurship sector across the region.

Growing awareness of entrepreneurial sector: With increasing interest in social entrepreneurship, the study evaluated the level of familiarity with entrepreneurship—in both the business and social sense—as the term is often perceived as an import from the West. Survey results concluded that overall there was a general level of familiarity with the term, but more respondents identified with the business side of entrepreneurship, indicating that there is more work to do to build awareness around the social sector. More encouraging was the number of respondents—63% in Tunisia and 56% in Egypt—who expressed an interest in starting their own business and a general openness towards working in the field of social entrepreneurship.

Challenges facing the sector: While survey results revealed several opportunities, there remains a high rate of failure for new businesses and NGOs, preventing them from reaching maturity. In Egypt 44% of business owners stated that their current businesses were not performing well, and in Syria the figures were higher at 50%. Those operating NGOs did not fare much better, as 56% of respondents in Egypt said that they had hoped to start an organization but were unable to do so. Government interference, the inability to obtain finance, bureaucratic hurdles, fear of failure, and corruption were the major obstacles to starting a new enterprise.Government interference, the inability to obtain finance, bureaucratic hurdles, fear of failure, and corruption were the major obstacles to starting a new enterprise. With transitions underway in Arab Spring countries, Stanford researchers called for a number of policy recommendations to create an ecosystem conducive for entrepreneurship to thrive. Some of their suggestions include: legal and regulatory reform in the banking sector; introducing entrepreneurial education in schools; and increasing the number of high-tech incubators.

While the Arab Spring has had an immediate negative impact on the economic landscape in the Arab world, the positive effect on citizens’ interest in social and economic development remains strong. As Arab Spring countries attempt to rebuild economically, social entrepreneurship represents a promising pathway for the post-revolutionary generation to engage in positive social change in the region and beyond.