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Social business: A new private sector contribution to development? Reflections on opportunities, limitations, and risks

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  • Kleemann, Linda
  • Humberg, Kerstin

Abstract

Since Nobel Peace Laureate Muhammad Yunus first began launching joint ventures with multinational corporations (MNCs) in Bangladesh, his social business concept has received international attention. What's the meaning of social business? What can it contribute to poverty reduction, and how does it foster human development? With reference to empirical findings, we illustrate how social business enterprises can create new sources of income, raise productivity and provide low-income consumers with access to products for their basic needs. Yet the findings are not suggestive of a panacea. Social purpose business rather represents a complementary approach to traditional poverty reduction strategies with its own set of opportunities, limitations, and risks. Some of the limitations could be mitigated by means of cross-sector partnerships and development partners creating an enabling environment. The mitigation of risks, however, will require a deliberate regulatory framework and rigorous monitoring and evaluation of impact.

Suggested Citation

  • Kleemann, Linda & Humberg, Kerstin, 2014. "Social business: A new private sector contribution to development? Reflections on opportunities, limitations, and risks," Kiel Policy Brief 82, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkpb:82
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    References listed on IDEAS

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    1. Sen, Amartya, 2001. "Development as Freedom," OUP Catalogue, Oxford University Press, number 9780192893307.
    2. Kleemann, Linda & Krieger-Boden, Christiane, 2011. "Bridging morale and business through shared value?," Open Access Publications from Kiel Institute for the World Economy 53147, Kiel Institute for the World Economy (IfW Kiel).
    3. Sesan, Temilade & Raman, Sujatha & Clifford, Mike & Forbes, Ian, 2013. "Corporate-Led Sustainable Development and Energy Poverty Alleviation at the Bottom of the Pyramid: The Case of the CleanCook in Nigeria," World Development, Elsevier, vol. 45(C), pages 137-146.
    4. Chong, Paul & Kleemann, Linda, 2011. "The future of funding for social enterprises," Kiel Policy Brief 34, Kiel Institute for the World Economy (IfW Kiel).
    5. Shrimali, Gireesh & Slaski, Xander & Thurber, Mark C. & Zerriffi, Hisham, 2011. "Improved stoves in India: A study of sustainable business models," Energy Policy, Elsevier, vol. 39(12), pages 7543-7556.
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    Cited by:

    1. Muhammad Mustafizur Rahaman & Niaz Ahmed Khan, 2017. "Making international aid effective: An agenda for aligning aid to social business," Development Policy Review, Overseas Development Institute, vol. 35, pages 96-117, October.

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