New Dynamics in Greater China: Changes of SE in Hong Kong between 2006 -2010

1. New Dynamics in Greater China:Changes of SE in Hong Kong between 2006 -2010 Kam-Tong CHAN, PhD Centre for Third Sector Studies The Hong Kong Polytechnic University ssktchan@polyu.edu.hk

2. Contents • Development of social enterprises in Hong Kong • Organizational characteristics • Operational strategies • Cross-sectoral interaction • Social impacts • Existing policies on promoting social enterprises • Recommendations: Policy framework

3. Development of social enterprises in Hong Kong • In line with the Asian financial crisis, the overall unemployment rates had increased persistently since 1997 and reached a peak between 2002 and 2003. • The Hong Kong government has began to introduce funding schemes to encourage the establishment of social enterprises at the beginning of 2000s. • Institutionally, the government has formally set up a unit to oversee the promotion work for the development of social enterprises. • The number of social enterprises being set up has been growing in the decade. • There are emergence of alliances and coalitions being formed in the community for supporting the development of social enterprises.

4. The SEs in Hong Kong have undergone 3 main stages: A) Preparatory Stage: • affirmative business to be more market-oriented • SWD Funding B) Exploratory Stage: • Commission on Poverty (CoP) • Other Funding Schemes: CIIF, PFD, C) Social Entrepreneurship Stage: • 2007 CE Election platform • SE Forum • General Chamber for SE • Business Centre at HKCSS

5. The 3 E Models of Social Enterprise • A) Employment Model: Work-integration • B) Empowerment Model (Community / User Employment Empowerment): Social Inclusion and Social Capital • C) Entrepreneurial Model: Social Entrepreneurship

6. Employment Model Postnatal Care Cooperative

7. Empowerment Model:Community empowerment Tour-guide and lodging services

8. Social economy St. James Settlement Community Economic Development

9. Entrepreneurial Model Personal Emergency Link Service Source: Senior Citizen Home Safety Association

10. Youth mentoring Fullness Christian Vocational Training Centre

11. Changes in organizational characteristics • Objectives • creation of employment opportunities for the disadvantaged and vocation training are still the key objectives on both 2006 and 2010 studies • Target Groups • Women and rehabilitants are the main targets • Decrease in the number for children/ youth and the elderly people • More diversified for target in 2010, including new immigrants, single parents, or chronic ill patients • Forms of SE operation • Greater percentages of shops and ecological tourist attractions • Sharp decrease in the number of service teams

12. 4. Nature of Business • Higher percentage for food and catering, eco-tourism • 5. Nature of Services • The status of operation remain similar in both 2006 and 2010

13. Objectives of social enterprise establishment

14. Major type(s) of organizations’ service users

15. Forms of social enterprise operation

16. Nature of services

17. Status of operation

18. Operational strategies • Financial management • Human resources management • Marketing management • Governance

19. Financial management • Financial Status and Overall income • greater number encountered deficitor just balanced • Sharp decline for those SEs with surplus • Ways of Spending Expenditure • no great change • Majority to be invested into SEs or channeled to the overall management of the organizations

20. Financial management: Overall income

21. Financial management: Ways of spending expenditures

22. Human resources management • Staff deployment • Professional manager, Technical staff and social workers are still the main staff force • Decline in he number of employment counselors • Incentive Mechanism • Salary package remains the same in 2006 and 2010 • With some SEs offering bonus, dividends

23. Human resources management: staffing deployment

24. Human resources: incentive mechanism

25. Marketing management Target: • General public and the disadvantaged remain as the main targets for sales and services • Slight decrease in the percentages of corporate as targets for sales Channel: • Great increase through the shethered workshop or shops (61.4% to 26.2%) • Other internal units within the organizations (internal market) is still high

26. Marketing management: Targets of sales and services

27. Marketing management: channels of sales and services

28. Governance • Organization Structure • No particular change of structure or setting up designated unit as revealed in 2006 and 2010 studies • Board of Directors • Great increase in the number of board members with business background • Adjustment at the board level instead of at organizational level • CEO • Increase in the percentage of CEOs with business administration knowledge or background

29. Governance: Changes in organizational structure

30. Governance: Institutional adjustments in Board of Directors

31. Governance: Institutional adjustments in CEO

32. Cross-sectoral interaction • Facilitation from the government • increase in the use of website for marketing information • Cooperation with business corporation • SE angels

33. Facilitation from the government

34. Cooperation with business corporations

35. Social impacts • Social impacts • Creation of employment opportunities remain high • Decrease in the percentage in the item for expansion of social network

37. Discussion on existing policies on promoting social enterprises Provision of financial support Business facilitation Promoting cross-sectoral collaboration Enhancing public understanding 37

38. 1) Provision of financial support Provision of seed money to eligible SEs to help finance their initial operation: Social Welfare Department: “Enhancing Employment of People with Disabilities Through Small Enterprise project” Health, Welfare and Food Bureau: “Community Investment and Inclusion Fund” Home Affairs Department: “Enhancing Self-Reliance Through District Partnership Programme” Development Bureau: “Revitalising Historic Buildings Through Partnership Scheme" How to differentiate the purposes of various funding schemes and avoid overlapping? 38

39. 2) Business facilitation Pilot scheme on government procurement: Give eligible SEs priority in bidding cleansing services What are the other business facilitation prgrammes to help the SEs e.g. government procurement? 39

40. 3) Promoting cross-sectoral collaboration Promoting cross-sector collaboration and encourage more private enterprises and professionals to participate in the development of SE Launching the Social Enterprises Partnership Programme A Matching Forum: interested business organzations can team up with NGOs to establish social enterprises or to partner with social enterprises. The Mentorship Scheme: link up experienced entrepreneurs / professionals with social enterprises so that the former could offer voluntary professional and business advisory services to the latter. Social Enterprise Summit 40

41. 4) Enhancing public understanding Raising public awareness of social enterprise with a view to creating a more conducive environment for the development of SEs Producing directory, booklet, website, and TV and radio programme for publicity Launching promotion activities in all the 18 districts throughout Hong Kong 41

42. Recommendations: Policy framework Creation of Conducive Environment Business facilitation policies Creation of opportunities Social Innovation Capacity Building • Creativity • Finance • Entrepreneurial skills • Technical know –how • Process betterment Promoting cross-sectoral collaboration Encouraging investment Enhancing public understanding

43. Thank You very much!