Overview of Social Enterprises In Hong Kong Chan Kam Tong, Ph.D. Unit for Third Sector Studies Hong Kong Polytechnic University [email_address]

Purposes of the Study Four core objectives : What are the features and characteristics of social enterprises attending to work-integration in Hong Kong? To what extent the work integration social enterprise has contributed to the employment-related poverty ? What are the critical success factors of work integration social enterprises? What are the barriers, constraints and challenges facing by the enterprises which have limited their development?

Four core objectives :

What are the features and characteristics of social enterprises attending to work-integration in Hong Kong?

To what extent the work integration social enterprise has contributed to the employment-related poverty ?

What are the critical success factors of work integration social enterprises?

What are the barriers, constraints and challenges facing by the enterprises which have limited their development?

The research team members Dr. Chan Kam Tong (Convenor) Professor Angelina Yuen-Tsang Dr. Ho Po Ying Dr. Cheung Kai Chee

Dr. Chan Kam Tong (Convenor)

Professor Angelina Yuen-Tsang

Dr. Ho Po Ying

Dr. Cheung Kai Chee

Definition of Social Enterprise There is no commonly agreed definition of Social Enterprise in Hong Kong Yet, there are some essential characteristics: It is serving social goals by using an enterprise strategies It is both a “ from Welfare to Work ” and a “ Social Investment ” Approach It is providing assistance to the marginal groups in the community, by encouraging self-reliance Sustainability is important

There is no commonly agreed definition of Social Enterprise in Hong Kong

Yet, there are some essential characteristics:

It is serving social goals by using an enterprise strategies

It is both a “ from Welfare to Work ” and a “ Social Investment ” Approach

It is providing assistance to the marginal groups in the community, by encouraging self-reliance

Sustainability is important

Key Features of Social Enterprise in Hong Kong 1. emerging and evolving entity 2. very much diversified 3. for both disabled and able-bodied people a) Disabled : physically disabled, development challenged, and psychiatric patients b) Able-bodied people : ex-offenders, non-engaged youth, women, and middle-aged semi-skilled

1. emerging and evolving entity

2. very much diversified

3. for both disabled and able-bodied people

a) Disabled : physically disabled, development challenged, and psychiatric patients

b) Able-bodied people : ex-offenders, non-engaged youth, women, and middle-aged semi-skilled

Major Types of Business 1. Servicing 2. Retailing 3. Innovative Craftsmanship 4. Catering and Restaurant

1. Servicing

2. Retailing

3. Innovative Craftsmanship

4. Catering and Restaurant

Servicing: Cleansing Household cleaning Pest Control Building Cleaning

Servicing: Car Washing Car Washing

Vegetable and Fruit Supply Service Vegetable and Fruit Supply

Courier Service Courier Service

Retailing Convenience Stores: Community Convenience Store: Hospital

Retailing Food Stall in Park Direct Sale

Catering and Restaurant Cafe Restaurant

Catering Catering Delivery for Party Club House

Hair Salon Hair Salon

Eco-tourism Eco-tourism

Modes of integration Employment bounded: work integration Status of target groups: Employees (salary: hourly rate or monthly) Trainees (allowance) Members of co-operatives (salary and work contract)

Employment bounded: work integration

Status of target groups:

Employees (salary: hourly rate or monthly)

Trainees (allowance)

Members of co-operatives (salary and work contract)

Enterprise Operation Four major dimensions in operation: 1. Resources Mobilization 2. Marketing Mix and Market Segment 3. Governance 4. Networking and Expertise

Four major dimensions in operation:

1. Resources Mobilization

2. Marketing Mix and Market Segment

3. Governance

4. Networking and Expertise

Resources Mobilization A) Financial Resources Social Welfare Department- “Enhancing Employment of People with Disabilities through Small Enterprise Project”- Seed Money CIIF- development of Social Capital Jockey Club Trust Fund- for start-up and capital cost Other Community or Charity Foundations- e.g. Keswick Foundations, Oxfam Many of these funding sources will target for specific goals and objectives

A) Financial Resources

Social Welfare Department- “Enhancing Employment of People with Disabilities through Small Enterprise Project”- Seed Money

CIIF- development of Social Capital

Jockey Club Trust Fund- for start-up and capital cost

Other Community or Charity Foundations-

e.g. Keswick Foundations, Oxfam

Many of these funding sources will target for specific goals and objectives

B) Human Resources structure is relative simple no. of employees/ trainees varies ( a few – 180 ) mostly supervised by human service professionals (e.g. social workers). Some managers have business training and experience , but not very common

B) Human Resources

structure is relative simple

no. of employees/ trainees varies ( a few – 180 )

mostly supervised by human service professionals (e.g. social workers). Some managers have business training and experience , but not very common

Marketing Mix and Market Segment The Marketing Mix (4-Ps) Product : depends on traits and skill requirements Price : market-determined and cost-determined Place : depends on cost of the venue and prospects of business Promotion : various promotion methods are used, but complementary words and words of mouths of customers are more important Market Segment Both external market (community at large) and internal market (for other service users or members)

The Marketing Mix (4-Ps)

Product : depends on traits and skill requirements

Price : market-determined and cost-determined

Place : depends on cost of the venue and prospects of business

Promotion : various promotion methods are used, but complementary words and words of mouths of customers are more important

Market Segment

Both external market (community at large) and internal market (for other service users or members)

Governance There are 5 types of governance structures: 1. Company/ Small Medium Enterprise Model : registered separately as a company 2. Subsidiary Unit Model : as ‘non-subvented’ unit of the NGO 3. Co-operative Model : formally / informally as co-operative 4. Flea market Model : highly flexible 5. Joint Venture Model : with business partners

There are 5 types of governance structures:

1. Company/ Small Medium Enterprise Model : registered separately as a company

2. Subsidiary Unit Model : as ‘non-subvented’ unit of the NGO

3. Co-operative Model : formally / informally as co-operative

4. Flea market Model : highly flexible

5. Joint Venture Model : with business partners

Networking and Expertise Rely on the networking from public and private sector Marketing Consultancy Office (MCO) of the Social Welfare Department offers great help in getting service tenders for the rehabilitation services Yet, there is great demands from the partnership relationship with the private sector, in particular, the small and medium enterprise

Rely on the networking from public and private sector

Marketing Consultancy Office (MCO) of the Social Welfare Department offers great help in getting service tenders for the rehabilitation services

Yet, there is great demands from the partnership relationship with the private sector, in particular, the small and medium enterprise

Essential Contributions of Social Enterprises 1. Resources Mobilizations From unemployed to employed From no salary to wage earning 2. Empowerment “ Springboard function”: stepping stone for open employment Esteem enhancement because of the employee status 3. Intermediation Platform for collaboration among Government, Private and Third Sector

1. Resources Mobilizations

From unemployed to employed

From no salary to wage earning

2. Empowerment

“ Springboard function”: stepping stone for open employment

Esteem enhancement because of the employee status

3. Intermediation

Platform for collaboration among Government, Private and Third Sector

Critical Success Factors 1. Social Entrepreneurship and Mindset Balance between Welfare vs. Business Enterprise 2. Marketability Market niche and market value 3. Knowledge, Skills and Attitude Enterprise strategies with Social goals 4. Branding Good will and public image 5. Tripartite Partnership Collaboration among Government, Private Sector and Third Sector

1. Social Entrepreneurship and Mindset

Balance between Welfare vs. Business Enterprise

2. Marketability

Market niche and market value

3. Knowledge, Skills and Attitude

Enterprise strategies with Social goals

4. Branding

Good will and public image

5. Tripartite Partnership

Collaboration among Government, Private Sector and Third Sector

Perceived Difficulties 1. Challenges in human resources Change of mindset and equip with business knowledge and skills Balanced ratio of normal and disabled workers 2. Challenges in financial resources Competition in open market Risk in break-even 3. Constraints in the bidding system Short track record Tight cash flow

1. Challenges in human resources

Change of mindset and equip with business knowledge and skills

Balanced ratio of normal and disabled workers

2. Challenges in financial resources

Competition in open market

Risk in break-even

3. Constraints in the bidding system

Short track record

Tight cash flow

Recommendations Social Enterprise should be considered as one of the essential approaches in helping the marginal group. Public awareness and support is deemed important Tripartite Partnership : further cooperation among Government, Private and Third Sector Promotion of Corporate Social Responsibility (CSR) among large Corporate and SMEs Flexibility in tendering and bidding mechanism. e.g. ‘ restricted tender ’ in some bidding or tendering exercise

Social Enterprise should be considered as one of the essential approaches in helping the marginal group. Public awareness and support is deemed important

Tripartite Partnership : further cooperation among Government, Private and Third Sector

Promotion of Corporate Social Responsibility (CSR) among large Corporate and SMEs

Flexibility in tendering and bidding mechanism. e.g. ‘ restricted tender ’ in some bidding or tendering exercise

Thank you

Thank you