Capitalising on Social Good

Start ups and social enterprises gather at the impact hub in Phnom Penh. Impact hubs are in 73 Cities across the globe
Start ups and social enterprises gather at the impact hub in Phnom Penh. Impact hubs are in 73 Cities across the globe

Start ups and social enterprises gather at the impact hub in Phnom Penh. Impact hubs are in 73 Cities across the globe

In Cambodia, local social enterprises are on the rise, and established companies and creative platforms are beginning to rally alongside them for the benefit of the country. By Joanna Mayhew

Kongngy Hav began with a simple commitment to solve one of the Kingdom’s most complex problems – affordable housing for the poor. With increased migration and a growing and young population, the country will need an estimated 1.1 million houses in the next 15 years. Yet owning a house is a pipe dream for many, as gross national income per capita sits at just $1,010.

Hav wanted to change this. While he had no business training, the 30-year-old reasoned the best solution was to lower the cost of the building blocks themselves – the bricks. For a year, he worked on prototypes for eco-friendly, interlocking bricks, before launching My Dream Home, a social business targeting poor and middle-income families, and offering savings between 20 and 50 percent on houses.

Hav represents a small but growing contingent of young, local entrepreneurs, who are using their time and skills to address the country’s biggest needs. “More and more we see the youth generation is really interested in doing business, but with a heart – where money is important, but it’s not the only goal,” says Alberto Cremonesi, co-founder of Impact HUB Phnom Penh, a co-working space that provides mentoring and training for social ventures. “We see the will to solve social issues, like pollution and housing through the mechanisms of entrepreneurship.”

Social enterprises function as any other business, but they exist specifically to address neglected problems, and generate surpluses to solve the issues. These ventures normally prioritise employment creation, public-private partnerships, sustainable solutions and positive environmental impacts. Cambodia now has about 200 social enterprises, Cremonesi estimates. However, the majority are owned by foreigners. “We see too few that are actually started by Cambodians,” he says. “[But] the trend is changing.”

While the number of local entrepreneurs may be increasing, many, like Hav, initially lack the skills and funding to thrive independently in the business world. Luckily, corporations and innovative networks are joining the cause, and providing tangible support.

“We as established businesses have an important role to play in nurturing and giving these guys an opportunity to succeed,” says Niek Van Veen, director of marketing for Cellcard, one of the country’s leading communications companies.

The company has recently revised its corporate social responsibility programme to improve its impact. Previously, money was doled out to worthy, but piecemeal projects. Now, Cellcard takes a more strategic approach to its investment in the country’s future businesspeople. It supports social entrepreneurs through 10 annual events, as well as by sponsoring physical platforms, such as co-working spaces, and individual entrepreneurs. Cellcard has also teamed up with Impact HUB to sponsor a series of social entrepreneur training courses.

According to Impact HUB, the growing commitment from private companies to social entrepreneurship is coming in a variety of forms, from nancial support to in-kind sponsorship and donating time. Popular cafés Brown and Joma have also contributed by offering reduced rents to co-working spaces and providing mentoring to emerging leaders.

But Cellcard admits the giving is not purely altruistic. “We are on the threshold of a digital revolution; we need a lot of Khmer content,” says Van Veen, adding the company prioritises supporting the technology sector. “ The more that develops, the more we will benefit.” The company also uses its investment to seek out new local talent, as well as identify opportunities to invest in promising enterprises.

Increasingly, companies are beginning to view social businesses as alternatives to funding non-governmental organisations (NGOs). As opposed to donation-driven NGOs, social businesses should eventually break even. “It’s not just about giving out $10,000 here, $20,000 there. I can make a business case, and say, actually there’s a real return on investment,” says Van Veen.

“ The impact a company can have is much bigger by working with social enterprises,” adds Cremonesi. “Once a social enterprise is up and running, you’re able to take the funds to a new social enterprise.”

When Impact HUB approached Cellcard for sponsorship, it presented the concept as a business opportunity rather than a donation.

“Supporting start-ups is in its infancy, but I feel interest for it is picking up,” says Van Veen. “It’s a matter of getting people to know that this exists – that there is more than just an NGO world.”

Raising awareness, both amongst companies and potential entrepreneurs, is a role platforms such as Impact HUB seek to fill. The organisation provides social entrepreneurship training through intensive workshops, in which participants identify an issue, brainstorm solutions, develop business plans and pitch ventures to investors. While many attendees have little-to-no experience, Cremonesi says, “commitment and passion counts more”.

This year, in partnership with Cellcard, the organisation is expanding its reach, offering training in Khmer for the first time to reach young Cambodians in Siem Reap, Sihanoukville, Battambang, Kampot and Phnom Penh. “Entrepreneurship is very trendy, and the new generation is aware that today’s Cambodia is not sustainable. Social entrepreneurship is bringing these two concepts together,” says Cremonesi. “It’s our responsibility to make sure people are aware of this third way.”

Impact HUB’s members are also enrolled in an incubation programme, which provides mentoring on business plans, financial plans and marketing, as well as a variety of workshops and networking opportunities.

The offerings were crucial for Hav. While he had received some initial training abroad, he says the contextualised workshops provided him with essential knowledge and skills to transform his idea into a functioning business. “It was very, very useful for me. It connected me to different investors,” says Hav, who attended the workshop last year and has received guidance ever since.

With his 12 employees, Hav now produces 2,000 bricks daily, and is poised to double the output. Already, Brown, along with other restaurants and cafés, has used the bricks to design one of its buildings, and the government is considering his prototype as a national standard for affordable housing. “For me, happiness is not about money, it’s about impact,” he says.

Organisations like Impact HUB can also act as an important link between companies and the entrepreneurs who need support. For entrepreneurs, the hub exposes them to networks they otherwise would not be able to access. For companies, the platform cuts down on the work of locating these businesspeople, and provides a degree of confidence, as the organisation has already vetted candidates and provides them continued support. “ The beauty about an Impact HUB is I have one entry point, where everybody’s coming together,” says Van Veen.

But challenges remain in the burgeoning sector. As social enterprises gain popularity, the term is “used and abused” by businesses to attract customers, according to Cremonesi. is is exacerbated by the fact that social businesses have no legal status in Cambodia, as only NGOs and businesses are recognised, says Hav.

Official definitions for social businesses, as well as subsidies to encourage the sector, are possible solutions that could help the country keep pace with the global trend of socially and environmentally conscious businesses.

As social entrepreneurs continue to emerge, evident by growing attendance to national conferences and discussions on offering a post-graduate diploma, so too do the number of platforms supporting them, even beyond Phnom Penh.

Following closely behind are the country’s ever-expanding corporate giants. “Businesses are starting to appreciate what social enterprises can bring. It’s the goods of an NGO, but the revenue-generating element of an enterprise,” says Van Veen. “ The best of both worlds.” Adds Cremonesi, “It’s a winning concept here.”

 

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