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Journal home page:
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Decreasing poverty through the application of social
entrepreneurship
Muyassarzoda FAYZIEVA
1
, Mariya BEKIMBETOVA
2
Tashkent State University of Economics
ARTICLE INFO
ABSTRACT
Article history:
Received October 2021
Received in revised form
15 October 2021
Accepted 20 November 2021
Available online
15 December 2021
This article is devoted to assessing the impact of the
development of social entrepreneurship on poverty reduction.
Theoretical views and approaches in conceptual studies related
to social entrepreneurship and poverty reduction are analyzed.
The relationship between social entrepreneurship and poverty
reduction has been studied by conducting a survey, developing
scientifically based proposals and recommendations based on
the results of the study to reduce poverty in Uzbekistan, through
the development of social entrepreneurship.
2181-
1415/©
2021 in Science LLC.
https://doi.org/10.47689/2181-1415-vol2-iss11/S-pp
This is an open access article under the Attribution 4.0 International
(CC BY 4.0) license (https://creativecommons.org/licenses/by/4.0/deed.ru)
Keywords:
social entrepreneurship,
poverty reduction,
social protection of
population,
social innovation,
social enterprise,
social project,
social services.
Ижтимоий тадбиркорликни қўллаш орқали қашшоқликни
камайтириш
АННОТАЦИЯ
Калит
сўзлар:
ижтимоий
тадбиркорлик,
камбағалликни
қисқартириш
,
аҳолини
ижтимоий
ҳимоя
қилиш
,
ижтимоий
инновациялар,
ижтимоий
корхона,
ижтимоий
лойиҳа,
ижтимоий
хизматлар.
Ушбу
мақола
ижтимоий
тадбиркорликни
ривожлан
-
тиришнинг
камбағаллик
даражасини
камайтиришга
таъсирини
баҳолашга
қаратилган
бўлиб,
унинг
мақсади
ижтимоий
тадбиркорлик
ва
камбағалликни
қисқартириш
масалаларига
тааллуқли
концептуал
тадқиқотлардаги
назарий
қарашлар
ва
ёндашувларни
ўрганиш,
сўровнома
орқали
ижтимоий
тадбиркорлик
ва
камбағаллик
даража
-
сини
камайтириш
ўртасидаги
боғлиқликни
аниқлаш,
тад
-
қиқот
натижалари
асосида
ижтимоий
тадбиркорликни
ривожлантириш
орқали
мамлакатда
камбағаллик
даража
-
сини
камайтириш
бўйича
илмий
асосланган
таклиф
ва
тавсиялар
ишлаб
чиқишдан
иборат.
1
Assistant of the department of HRM, Tashkent State University of Economics. Tashkent, Uzbekistan.
E-mail: fayzievamuyassar87@gmail.com.
2
Assistant of the department of Management, Tashkent State University of Economics. Tashkent, Uzbekistan.
E-mail: mariya.bekim@gmail.com.
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Сокращение
уровня
бедности
с
помощью
применения
социального
предпринимательства
АННОТАЦИЯ
Ключевые
слова:
социальное
предпринимательство,
сокращение
бедности,
социальная
защита
населения,
социальные
инновации,
социальное
предприятие,
социальный
проект,
социальные
услуги.
Данная
статья,
посвящена
оценке
влияния
развития
социального
предпринимательства
на
сокращение
уровня
бедности.
Проанализированы,
теоретические
взгляды
и
подходы
в
концептуальных
исследованиях,
связанные
с
социальным
предпринимательством
и
сокращением
уровня
бедности.
Изучена
связь,
между
социальным
предпринимательством
и
сокращением
бедности
путем
проведения
опроса,
разработки
по
результатам
исследования
научно
обоснованных
предложений
и
рекомендаций
по
снижению
уровня
бедности
в
Узбекистане,
путем
развития
социального
предпринимательства.
1.
INTRODUCTION
Poverty is one of the main challenges in global economic development. United
Nations has reported that around 1.3 billion people around the world are
multidimensional poor that not only means low income but also another number of
indicators such as poor quality of life, poor health, and low-quality education (Wu and Si,
2018). In recent decades, awareness that economic growth alone cannot bring prosperity
to all citizens of a country has been growing. The current economic crisis in many EU
countries has further strengthened trends for consideration of alternative models of
economic development (Maji, 2016). In this context, the issue of social protection of the
population has always been in the spotlight of the world, and today this issue is still of
great importance in Uzbekistan. However, today
’
s period requires new approaches to
solving problems of social significance, and the development of social protection policies
in the country using international experience. Particularly during the COVID-19, the
protection of public health, employment, access to education, declining incomes, as well as
the emergence of socio-economic problems associated with migration processes have
increased the level of importance of the issue in countries around the world. The COVID-
19 pandemic has caused a variety of social problems, especially an increase in poverty
among citizens with low daily incomes or no daily incomes at all. Thaha (2020) state that
the COVID-19 pandemic impact shows that people do not have a daily income and that
there have been significant job cuts (Thaha, 2020).
According to Social Change Central (2021) in world practice, socially oriented
activities of legal entities or individual entrepreneurs aimed at alleviating or solving
certain social problems of the population and their consequences are carried out through
social entrepreneurship. To make such activity more understandable, it can be called a
non-state social protection tool. The research conducted by the experts of the Center for
Social Change (Social Change Central) is noteworthy in this regard. According to Center,
one in four of the business entities created annually in the EU countries are social
entrepreneurship entities. Social enterprises in the UK form about 5% of all enterprises
(about 70,000 social enterprises), and employ almost 1 million people. A similar situation
can be observed in Arab countries, where 20-30% of those who apply for state registration
intend to establish social entrepreneurship. Even in African countries, 20% of those who
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want to start a business plan to engage in social entrepreneurship. There are also more
than 20,000 social businesses in Australia and it can be observed that their weight has
increased by 35 per cent in the last five years. The share of this sector in the country
’
s GDP
is 2-3%.
Although the term
“social
entrepreneurship”
is rarely used in our language, it is one
of the most widely used and legally established principles in the world. For example,
relations related to social entrepreneurship are reflected in the legislation of Korea, Italy,
Great Britain, Belgium, Poland, the USA, China, and other countries, and a specific model of
cooperation between the state and business entities in addressing social issues has been
formed.
As mentioned by Rashidova (2020), who is a researcher in the field of social
entrepreneurship, social entrepreneurship is a socially-oriented business in which income
is not used to increase the income of business owners. The main purpose of such
entrepreneurial activity is social utility, in which the focus is not on net profit, but on
positive social change, the solution of human problems that are not solved by public social
policy or business. The work of such enterprises mainly involves people who are socially
unstable or have disabilities. At the same time, these enterprises will specialize in the
production of socially useful goods and products (Rashidova, 2020). In such cases, the
subject of social entrepreneurship considers the interests of society as a priority in its
activities. Employ as many vulnerable groups as possible, produce or support special
products for the disabled and the elderly, and be proactive in improving living standards.
In accordance with the current legislation of Uzbekistan, benefits are created for the
creation of jobs for the socially vulnerable population, taxes and other types of enterprises
that produce products and equipment for people with disabilities. However, the current
legislation does not clearly define the legal concept of
“
social entrepreneurship
”
and the
mechanisms of legal regulation of relations related to social entrepreneurship.
Improving the living standards of the socially vulnerable population by providing
them with jobs, social goods and social services, selling social goods and socially important
products at their own cost or at prices below cost, the conversion of business entities into
the production of goods (works, services) aimed at the elimination of emergencies, the
implementation of activities for other social purposes. For the above purposes, the draft
Law of the Republic of Uzbekistan
“
On Social Entrepreneurship
”
in 2020 was published
and included in this draft state support of social entrepreneurship by Chapter 4. Referring
to the draft, social entrepreneurship will be supported by the state in the form of benefits
and preferences, subsidies for social project costs, placement of the state social order,
financial support, training, retraining and advanced training of social enterprise
employees and others. This Law and its purpose are relevant in supporting the socially
vulnerable groups of society, not only such categories, but all categories of society in the
event of the COVID-19 pandemic and similar emergencies, which began a year and a half
ago. If we look at social entrepreneurship as a new mechanism for employment, it is clear
that this mechanism will provide employment for many unemployed people in society,
and, as a result, will lead to major changes, such as poverty reduction, which is a pivotal
issue in our country.
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2.
LITERATURE REVIEW
2.1. Social entrepreneurship
Social entrepreneurship involves the recognition, evaluation, and exploitation of
opportunities that result in social value
–
the basic and long-standing needs of society
–
as
opposed to personal or shareholder wealth (Austin et all., 2006). Social entrepreneurship
creates new models for the provision of products and services that cater directly to basic
human needs that remain unsatisfied by current economic or social institutions (Seelosa
and Mair, 2005).
Social entrepreneurship is a for-profit enterprise that has the dual goals of achieving
profitability and attaining beneficial social returns. Rather than the usual
entrepreneurship organization, social entrepreneurship is looked into as ray of hope to
help those below the poverty line to live a better life in the future. The effectiveness of such
social entrepreneurship in achieving the organizations
’
goals and their efficiency in their
financing will further enhance their impact towards eradicating urban poverty (Mariotti
and Glackin, 2013). SE is a structure that allows individuals to strike their own balance
between the desire to make a social contribution and the personal need to capture an
economic return from professional activity, across a wide range of possible ratios (Seelos
and Mair, 2004).
Table 1.
Comparison of Social Entrepreneurs and Commercial Entrepreneurship
Indicator
Social Entrepreneurs
Commercial Entrepreneurship
Market failure
Judging from the condition of social
organization with the birth of market
failure from several social aspects.
Market pressures sometimes do
not match the expectations of
public needs.
Mission
The main target of a social
entrepreneur is social value for society.
Its main target is to make a profit
as a result of its business activities.
Resource Mobilization
The challenge is a surplus of resources,
constrained to compensate,
competitive. More on value than on
material.
There is a material compensation
to make it easier to pay
accordingly.
Performance
Measurement
Social changes are not easy to measure,
resulting in impacts that are difficult to
quantify.
Performance standards are clear
and measurable.
Based on Austin (2003), Table 1 describes the difference between social
entrepreneurship and business entrepreneurship (Austin, 2003).
2.2. Poverty
Poverty is a critical issue for the world with the numbers of people living at the base
of the pyramid declining only slightly over time (Bruton, 2013). Poverty is the inability of
individuals, households or an entire community to command sufficient resources to satisfy
a socially acceptable minimum standard of living (May, 1999). Poverty is
multidimensional; it affects the society in various ways, robs people of their dignity and
limits their ability to improve their lives. It means not having access to basic human needs
–
such as food and clean water (Shirima, 2001). Poverty is dehumanizing; it is the most
perceived motivator of most social vices. When any society alleviates or eliminates
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poverty, then, the fight against most of the societal problems is almost won. Poverty that
arises mostly due to unemployment can be alleviated through entrepreneurship skill
acquisition (Adofu et al., 2013).
2.3. The relationship between social entrepreneurship and poverty reduction
In the opinion of Rametse and Shah (2013), poverty-alleviation strategies based on
social entrepreneurship seek to create societal value by identifying opportunities and
resources in innovative ways (Rametse and Shah, 2013). For social entrepreneurs, seeing
opportunities means seeing social problems and then continuing to think creatively to
solve problems for the sake of community welfare (Rijal, 2019). Social entrepreneurs can
provide the new approaches needed to hasten the process of reducing poverty and hunger.
By combining innovative ideas from individuals and investments from public, private, and
civil society organizations, such entrepreneurs can guide complex global food systems and
rural institutions toward their goals (Suresh and Pinstrup-Andersen (2007).
Social entrepreneurs and their innovations for reducing poverty should not replace
large-scale public-sector poverty intervention programs but rather enhance them with
improved effectiveness (Suresh and Pinstrup-Andersen, 2007). A review by Cooney and
Shanks (2010) of the empirical research on effectiveness of
‘
new
’
approaches (including
social enterprise) to poverty alleviation found an emphasis on organizational
sustainability and mission risk, with very little data on client outcomes. The one exception
they noted was the work done by EMES in the EU to estimate the effects of participation in
SEs on employment (Cooney and Shanks, 2010). The best cure for poverty alleviation in
any region of the world lies in encouraging more business activity and startup the new
ventures through entrepreneurship development. Moreover, entrepreneurship provides a
basis for economic change through new knowledge creation and application (Singer,
2006). Subramanian and Mohanram (2016) found that innovation, family background,
government support program, social entrepreneurship, women participation,
entrepreneurship training & education, individual entrepreneurial characteristics,
participation of micro, small & medium enterprises, youth empowerment, collaboration of
government-university-industry is the key tool for entrepreneurship development which
is stimulating employment are eventually alleviating poverty (Subramanian and
Mohanram, 2016).
3. RESEARCH METHODOLOGY
The research design of this research is cross-sectional research design. The cross-
sectional research design is based on gathering information from participants at a specific
point in time. The research survey was distributed on October 30th, 2021 via the Telegram
social network, and responses were collected during a two-day period.
The research approach of this research is quantitative because the responses of
respondents were reflected with percentages and numbers. The researchers aimed to
analyze the answers of participants through Descriptive statistics, Frequencies and
percentages analysis, the Reliability test, and Spearman
’
s Correlation of the question items
in order to determine overall perceptions of respondents.
The researchers applied both data collection methods. They include: primary data
(based on this research
’
s main results) and secondary data (annual reports, previous
research papers in the social entrepreneurship field, and others). Over 50 research papers
were viewed by the researchers and selected 27 research papers
’
findings and conclusions,
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as well as articles that are published on the Internet sites. The selected findings and
conclusions which were already identified have been highlighted in the Introduction,
Literature Review, and Results and Analysis sections of this research.
The data collection tool for this research is an online survey tool. The online survey
was created in the form of two POLLs on the Telegram social network and distributed to
an unlimited number of Telegram users on October 30th and 31th, 2021. The POLLs
involve two question items which reflect on
“
The development of social entrepreneurship
in our country is an important aspect of poverty reduction
”
and
“
Social entrepreneurship
plays an important role in protecting the vulnerable population
”
. Every question item
consists of five options, and they include:
“
Strongly agree
”
,
“
Agree
”
,
“
I
’
m not sure
”
,
“
Disagree
”
, and
“
Strongly disagree
”
. The measurement scale of these question options is
an ordinal measurement scale.
The research analyzing software is JASP statistical software. The JASP software was
used for analyzing the Descriptive statistics, Frequencies and percentages analysis, the
Reliability test, and the Spearman
’
s Correlation of the question items
’
options which were
chosen by the research respondents.
4.
ANALYSIS AND RESULTS
Many scientists and researchers have conducted research and studies on poverty
reduction through social entrepreneurship, and these processes continue nowadays also.
In international practice, the ways and means chosen by social entrepreneurs to reduce
poverty are important, and it is worthwhile to cite a few of them in this research. For
example, Martin Fisher and Nick Moon of Kickstart identified a socially entrepreneurial
opportunity to build water pumps in Sub-Saharan Africa to provide better irrigation for
subsistence farmers in the region (Fisher, 2006). The goal of creating this social enterprise
is to reduce poverty by providing a mechanism that allows farmers in African countries to
be more productive. In this case,
social innovation
is ancillary farming by increasing the
productivity of existing agricultural lands. Social innovation
–
the fourth aspect of social
value creation is social innovation, which highlights creating social value by employing
fewer resources to achieve higher outcomes and solving insoluble problems. Innovation
here refers to combining existing elements in a new way in the life of the disadvantaged
group rather than in the organizations. An example is the initiatives of the International
Development Enterprise in India that have brought the cheap, simple, durable technology
of water pumps to the lives of poor farmers and have helped them to reduce their
agricultural costs and earn more money (Young, 2008). Social value has little to do with
profits but instead involves the fulfillment of basic and long-standing needs such as
providing food, water, shelter, education, and medical services to those members of society
who are in need (Certo and Miller, 2008).
Next example is Durojaye Mobile Toilet (DMT) which was established in Lagos in
1999 and seeks to transform the economic and environmental health of Nigerian.
Nicknamed
“Mr
Shit”,
Durojaiye is transforming public hygiene in Africa in no small way.
This social enterprise produces, hires out and maintains portable toilets, promoting
sanitation and creating job opportunities for the unemployed youths. In 2010 and 2013,
it became abundantly clear that shit business has become a big business in Nigeria and
extending to other poor African countries (Deborah, 2014).
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Another example is
“The
Specialists”
which is a for-profit consultancy firm from
Denmark that usually and exclusively hires autistic people. The entrepreneur ensures that
more people with autism will be more likely to have employment in the firm (Tanchangya
et. Al., 2020).
In identifying innovative solutions to social problems through social
entrepreneurship, the following individuals
’
innovative ideas play a major role regarding
local government officials in the regions, deputies of local councils, the potential of
business leaders, and other institutional leaders. Factors such as young people
’
s
involvement in public affairs, indifference to social problems, thorough mastery of modern
information technologies, knowledge of several foreign languages, ability to see old
problems in new ways, both in their social business sector and in promoting social
entrepreneurship among society allows social problems to be active and proactive in the
process of creating successful social innovative ideas as well. The recent establishment of
Youth Institutions by the International Youth Foundation in several developing countries
is aimed at developing young people as social entrepreneurs through leadership training
that promotes social entrepreneurship.
One way to address poverty in developing countries is to apply business
development principles to social problems. At the same time, social entrepreneurs use
business principles in the implementation of social innovations. There are three types of
such entrepreneurs, the first category of which are business leaders who are successful in
their fields and whose entrepreneurial ability can help solve social problems.
Entrepreneurs in the second category of them consider people from the socially vulnerable
as potential consumers of their products and services. The third category is the part of the
poor whose income, resource ownership, social capital and levels of entrepreneurship
vary. Some become business-oriented social entrepreneurs with little financial support or
training. Microfinance programs allow the poor and vulnerable to grow their businesses
so that they can find innovative solutions to their social problems. For example, the
emergence of private schools in response to unsatisfactorily managed public schools in
India, Kenya, and Nigeria shows that poor people can find acceptable solutions to their
social problems. The success of poverty reduction programs depends on the skills and
abilities of program managers and local leaders.
The following statistical analyses were used by the researchers in order to find the
main findings of this research:
4.1 Descriptive statistics
Table 2.
Descriptive Statistics of research questions
Soc_Entr_
pover_reduc
277
0
4.000
4.000
3.711
0.069
1.150
1.000
5.000
Soc_entrep_pro
tec_vul_popul
256
21
4.000
4.000
3.988
0.063
1.008
1.000
5.000
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Based on Table 2, it is clear that the first question item
(Social entrepreneurship is
an important aspect of poverty reduction)
was given perceptions by 277 respondents, and
the mean is 3.7, while at the same time, the mode and median are both 4.0. The second
question item
(Social entrepreneurship plays an important role in protecting the
vulnerable population)
was given perceptions by 256 respondents (21 were missed) and
the mean is just below 4.0. The Mode and Median
’
s indexes are the same with the first
question item, which are 4.0.
4.2. Frequency and percentages analysis
Table 3.
Frequencies for question item
“The
development of social entrepreneurship in our
country is an important aspect of poverty
reduction”
Soc_Entr_pover_reduc
Frequency
Percent
Valid Percent
Cumulative Percent
1
16
5.776
5.776
5.776
2
28
10.108
10.108
15.884
3
54
19.495
19.495
35.379
4
101
36.462
36.462
71.841
5
78
28.159
28.159
100.000
Missing
0
0.000
Total
277
100.000
According to Table 3, overall, 277 participants responded to the first question item,
and among those, 101 chose the
“
Agree
”
option and 78 chose the
“
Strongly agree
”
option.
“
Strongly disagree
”
and
“
Disagree
”
options were chosen by 16 and 28 participants,
respectively.
Table 4.
Frequencies for question item
“Social
entrepreneurship plays an important role in
protecting the vulnerable
population”
Soc_entrep_protec_vul_popul
Frequency
Percent
Valid Percent
Cumulative Percent
1
10
3.610
3.906
3.906
2
11
3.971
4.297
8.203
3
38
13.718
14.844
23.047
4
110
39.711
42.969
66.016
5
87
31.408
33.984
100.000
Missing
21
7.581
Total
277
100.000
According to Table 4, overall, 256 participants replied (21 were missed) for the
second question item and among 110 of all participants chose the
“Agree”
option and
87 participants chose the
“Strongly
agree”
option.
“Strongly
disagree”
and
“Disagree”
options were chosen by 10 and 11 participants.
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4.3. The Reliability test
Table 5.
Bayesian Scale Reliability Statistics for research questions
Estimate
Cronbach’s α
Posterior mean
0.970
95% CI lower bound
0.962
95% CI upper bound
0.977
Note. Of the observations, pairwise complete cases were used.
The researchers applied the Bayesian Unidimensional Reliability test to identify the
reliability of gathered data for the research. In accordance with Table 5, it can be clear that
the reliability of the survey is 0.970, which means that the internal consistency of the
survey is excellent. Based on the table
’
s 95% CI (Confidence Interval) lower and upper
bounds, there is a 95 % chance that the posterior mean of Cronbach
’
s Alpha will be
between 0.962 and 0.977. There is a 5% chance that the posterior mean of Cronbach
’
s
Alpha lays outside of the upper and lower confidence interval.
4.4. Correlation
Table 6.
Spearman
’
s Correlations of the research questions
Spearman’s rho
p
Soc_Entr_pover_reduc
–
Soc_entrep_protec_vul_popul
0.935
<.001
Note. All tests one-tailed, for positive correlation
With regard to the Spearman
’
s Correlation coefficient of the research questions,
there is a very strong and positive relationship between two question items in accordance
with Table 6 (
r
=0.935, p=.001, Figure 1).
Figure 1. A Scatter Plot of the research questions
5. CONCLUSION AND RECOMMENDATIONS
According to the main findings of this research, the researchers came to the
following conclusion:
Based on results, it is identified that social entrepreneurship is an important aspect
of poverty reduction in Uzbekistan. Social entrepreneurship plays one of the main means
of protecting the vulnerable population in Uzbekistan
.
In accordance with the above conclusion, the researchers have developed several
science-based proposals and recommendations. They include:
–
Creation of an appropriate legal framework that is the basis for the support of
social business;
–
Establishment of a department (s) to support social enterprises (or social business)
and social entrepreneurship in the organizational system of the responsible ministry;
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258
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Establishment of a fund to support social entrepreneurship, allocation of funds for
self-employment activities for the poor and vulnerable groups, as well as for the
establishment and operation of social enterprises dealing with various social issues;
–
Implementation of research and projects related to the creation of the social
business sector;
–
Organization of effective activities (leadership training) by the Youth Union of
Uzbekistan and the Agency for Youth Affairs to promote and direct social entrepreneurship
among young people;
–
Training of specialists on social entrepreneurship (social enterprise, social
business, social innovation, etc.) in secondary special and higher education institutions;
–
Preparation of textbooks
“
Social Entrepreneurship
”
for students of secondary
special and higher education institutions;
–
Creation and development of the Institute of Social Entrepreneurship;
–
Holding the traditional annual republican forum of social entrepreneurs.
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