Perks of social start-ups

    Have you ever thought about beginning your own social start-up business? Turns out, it’s a lot more beneficial than previously thought!

    A world-first study has found that social venture start-ups can alleviate social problems.

    “It has long been acknowledged that the entry and growth of new firms contribute a large share of job creation in most countries,” says Professor Martin Obschonka, Director of QUT’s Australian Centre for Entrepreneurship Research.

    “Social venture start-ups, however, are most celebrated for their worth in helping the disadvantaged or solving social concerns – their role in job creation has no really been considered.”

    “Job creation is often a major focus of the social mission of these start-ups, especially for marginalised groups including people with disabilities and long-term unemployed individuals.”

    Founding director of QUT’s Australian Centre for Entrepreneurship Research, Professor Per Davidsson, lists the ways in which start-ups create more jobs.

    “There appear to be a number of reasons social ventures create more jobs. First up, most ‘commercial’ start-ups represent individuals choosing self-employment which can mean they have no burning desire to grow and take on employees,” says Professor Davidsson.

    “Commercial start-ups also often operate in crowded markets with little room for growth. So even the high growth firms among the commercial category do not raise the average to high levels; partly because they outcompete or acquire some of their peers.

    “By contrast, social ventures address underserved ‘markets’ of social problems, such as homelessness, substance abuse, domestic violence, refugees, environmental concerns, animal shelters, foodbanks, crisis centres, youth unemployment and so on.

    “This creates room for growth without pushing out other social ventures. And being passionate about solving as much of ‘their’ social issue as they possibly can, social entrepreneurs are motivated to grow.

    “They can also benefit from lower costs due to tax breaks and partial reliance on volunteers to have a growth advantage over commercial firms offering competing products or services.”

    This study was written by Professor Martin Obschonka, Director of QUT’s Australian Centre for Entrepreneurship Research, and its founding director, Professor Per Davidsson, along with collaborators from Sweden, the paper – The regional employment effects of new social firm entry, has just been published on Springer Open Access.

    View the full paper here.

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