HAVE YOU ever spotted a mysterious red-vested figure standing in front of the exit of a busy subway station of Seoul, waving a red magazine in the air and giving the warmest greetings to the passerby? These figures are the vendors of The Big Issue, one of the most prominent social enterprises that offer the homeless, disadvantaged, and underprivileged people with the opportunity to reconstruct their lives through the sales of street magazines. Like this, social enterprises are transforming the way conventional business models work. Business is no longer just about earning money. Rather, it is about creating change on a deeper level and making a difference to the society that we live in.
The culture of business is changing. From the world of cold-hearted businessmen operating under conventional business models to the world of warm-hearted businessmen operating under social enterprises, the capitalist market today is undergoing some gradual and fundamental changes to its underlying framework and principles. This change is embodied through the rise of social enterprises, a profit-earning business that promotes social values through its trade.
The definition of a social enterprise is simple and intuitive. A social enterprise refers to a business model that is commercially viable through the sales of goods or services, while in simultaneous pursuit of social objectives. If traditional business has one goal—to earn revenue—a social enterprise has two: not only to earn revenue but also to generate social outcomes. For a better understanding of the concept, it is always useful to examine real-life cases that have taken on the concept and brought it to life.
Case Study 1: The Big Issue
Let us plunge right into what is perhaps the most notable and globally renowned social enterprise: *The Big Issue*. Found in 1991 in the United Kingdom, *The Big Issue* presents a new paradigm to existing business models by inserting a social mission to the inherently capital-driven foundation of the market. It targets the marginalized people of the society—mostly those who are homeless—and aims to reintegrate them into the society by laying down a solid groundwork to their financial independence and sustainability.
The key concept that The Big Issue has adopted as its main attempt in combat of poverty and inequality is “self-help.” As a business solution to this real problem, the enterprise offers the victims of poverty an opportunity to engage in social trading. The main means of achieving this feat lies in the sales of magazines, for which the impoverished people are hired as the “vendors.” Once hired, the vendors are trained and dispatched to the streets, from which point on their journey towards a better life begins.
One of the characteristics that The Big Issue from other business is its method of distributing the revenue: half of the revenue made for each copy goes directly into the pockets of the vendors. In Korea, for instance, one issue is sold at the price of \5,000 (approximately US$4.4), for which \2,500 (approximately US$2.2) is returned to the vendor.
This 50-50 commission and return, so to speak, is a rate that is unheard of in most conventional business models. What makes such revolutionary rate possible is the social principle that serves as the backbone to this enterprise: the management desires not just any old profit, but one that matters to the vendors. These sellers are not simple “beneficiaries” of aid; instead, they are micro-entrepreneurs who create the change that they desire in their own lives. In this way, they are able to take ownership in the battle against poverty and the reconstruction of their lives as proud workers.
From its first launch in the United Kingdom 26 years ago to now, The Big Issue has come a long and meaningful way. As of 2016, it has led to the sales of over 200 million copies of the magazine, and a total profit of ￡115 million for over 92,000 vendors. Moreover, it now operates in additional nine nations across four continents—South Korea, Japan, Taiwan, South Africa, Kenya, Zambia, Malawi, Namibia, and the Republic of Ireland—and has inspired the birth of over 120 magazines that emulate its model in 35 countries around the world. To this day, The Big Issue continues its voyage towards the dismantlement of poverty and inequality through its business.
Case Study 2: Marymond
, too, is not an exception to this growing global trend of placing emphasis on social values, and has been housing an increasing number of social enterprises of its own. The most iconic and publicized one is Marymond.
Marymond is an online web-based design brand that sells merchandise and provides direct support to the victims of military sexual slavery of the Japanese colonial era. The name “Marymond” is a compound of “Mariposa,” a type of tulip, and “Almond.” According to Marymond, the name reflects its main mission of becoming a brand that triggers the blossoming of the restoration of esteem within our society.
Since its inception in 2012, Marymond has been passionately assisting and advocating the enforced sex slaves in their long and slow journey of correcting the historical atrocity. Through its business, it delivers the stories of the victims, raises public awareness regarding the issue, and ultimately “restores the esteem” of these victims.
As Marymond’s main design motive lies on flowers, different types of flowers are incorporated into the design of most products. From bags, wallets, clothes, shoes, to phone cases and accessories, the product variety of Marymond serves as one of its appealing points to the customers. Not only is it a socially meaningful brand, but it is also becoming an increasingly trendy and “hip” brand among the youth of Korea.
In addition to this recurring theme of flowers, the management of Marymond has proceeded with the process of “human branding.” By operating under the concept of companionship, Marymond identifies the victims as its “companion” and proceeds with the “human branding” operations. Either the victims are the original artists of the design of the products, or they are embodied in the design of the products.
In just 2013 and 2014, the accumulated sales of Marymond was \700 million won, of which over \100 million won was donated to the construction of a History Museum of Comfort Women and the funding for the welfare of the victims. In the long-term, the management of Marymond hopes to expand the business to come to the aid of other minorities, such as disadvantaged children.
Looking under the surface
Key principles that further define a social enterprise can be summarized in three key words: transaction, reinvestment, and socially-driven. First, social enterprises derive its revenue from business transaction, rather than from donations or grants. Second, social enterprises reinvest a considerable amount of their income to fund their social mission. Third, social enterprises are fundamentally driven by their social cause, be it economic, political, or environmental.
The trend of this new business model has been on a constant rise, with the most successful and stable ones being seen in the Western hemisphere of the globe. For instance, the European Commission has found that one out of four newly established enterprises every year are social enterprises. In addition, according to Finding Australia’s Social Enterprise Sector (FASES)—the only census of social enterprise in Australia—there were already 20,000 social enterprises in Australia in 2010, which constituted 2-3% of the GDP.
Change comes from caring. Caring about those who face neglect in our society. Caring about those who cannot afford three hot meals a day. Caring about those who are fighting for justice from the tyranny of the authorities of the past. That is exactly what these ventures are doing. Slowly, but surely, small businesses with a big heart is changing our society for the better.