Social entrepreneurship is gaining momentum in Turkey and is considered a promising avenue for addressing key social and economic problems including refugee integration, unemployment, and economic downturns. Social enterprises are organizations that prioritize social and environmental impacts. They generate more than half their revenue from trading, reinvesting any profit primarily in their mission. There are currently 9,000 social enterprises in Turkey, most located in the largest cities of Istanbul, Ankara, and Izmir, but they are also emerging elsewhere.
Currently, Turkish law does not provide for a separate legal entity for social enterprises, and they operate under a broad spectrum of legal status, including Cooperatives (29 %), Limited liability companies (19%), Sole traders (19%), Associations (14%), Corporations (13%), and Foundations (3%).
Policy is fragmented but active, with ongoing efforts from a number of government entities to support the ecosystem. With support from the EU for social entrepreneurship and social innovation under the Instrument for Pre-Accession Assistance funds and other EU programs such as the 4 years, EUR 39.5 Million, Social Entrepreneurship, Empowerment and Cohesion in Refugee and Host communities in Turkey (SEECO)
Social entrepreneurs in Turkey operate in a diverse range of sectors, the most common are in education, manufacturing, creative industries, and agriculture. Women entrepreneurs tend to focus on agricultural production, food production, textile and garments, arts and crafts, and social services. The scope and focus of social enterprises are often innovative. 86% of social enterprises in Turkey brought a new product or service to the market. Social enterprises are mostly operating at the micro level at startup. In average a social enterprise employs about four people full-time and 5-6 part-time on average, and rely heavily on volunteers. They are generally optimistic about growth.
Social enterprises are mostly led by women (55% compared with 19% women managers in commercial enterprises) and they are also a form of business in which young men and women want to work (47% of social enterprise leaders are under the age of 35). Other key actors in the social enterprise ecosystem are intermediary organizations (incubators, accelerators, co-working spaces) as well as academic institutions, government agencies, and local institutions and funding organizations.
The social entrepreneurship approach to the inclusion of refugees
Host communities are likely to be more accepting of refugees if they see how funds to support the refugee crisis will support finding innovative solutions to pressing social issues in the host communities which will also positively impact the local economy. A primary benefit of the social enterprise model for women is that there is not only the possibility of economic inclusion but it also brings enormous social benefit to young and old women, who often join together with other social entrepreneurs to achieve a common goal. This process, if well supported, can bring benefits of social cohesion in participating communities
A recent study highlighted the main barriers to the development of social enterprises in Turkey as the lack of;
- Access to finance to expand their businesses is more problematic for women than men, as they cannot access the full range of sources and external funding.
- People and institutions who invest in social enterprises, caused in part by the lack of a common language between finance providers and social entrepreneurs, and the high profit expectations of potential investors
- The skills needed to develop a microbusiness around a marketable good or service
- Visibility and marketing
- Public institutions' understanding and awareness regarding the purpose and approach of social enterprises.
- The costs of establishment, high taxation they pay despite their socially-oriented objectives and the struggle with bureaucracy
In order to address these challenges the study recommends six key sets of actions:
- enhancing visibility and public understanding with the general public and with public institutions and local administrations
- supporting improvements in the policy environment through an inclusive and flexible approach
- promoting access to finance and growth through better awareness of investors and better readiness of social entrepreneurs, as well as stepping up support from a broad range of external sources
- creating targeted training programs for women with measures to facilitate women’s access to funding and finance
- motivating young women and men and supporting their learning; and
- ensuring access to support and capacity building through intermediary and other supporting organizations, networks, and platforms.