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Abstract

Social enterprise has quite a long history in South Africa. As early as 1991 the US Ashoka Foundation established offices in the country, while even before that, many NGOs, non-profits and co-operatives were engaging in social enterprise activity, albeit perhaps not explicitly identifying it in such terms. However, it is over the last 10-15 years in particular that social enterprise as a phenomenon and the social economy in South Africa have proliferated. For example, PhytoTrade Africa, the trade association of the natural products industry in Southern Africa, was established in 2001 with the aim of alleviating poverty and protecting biodiversity. Cooperation for Fair Trade in Africa (COFTA) was formed three years later, in 2004, including South African members (COFTA became the World Fair Trade Organisation Africa in 2013). The African Social Entrepreneurs Network (ASEN)1 and the Social Enterprise Academy Africa, both of which are based in South Africa, were created respectively in 2009 and 2012. This growth in practitioner activity has also been accompanied by increasing academic interest; for example, the Centre for Social Entrepreneurship and the Social Economy was founded in 2010 at the University of Johannesburg, while the Bertha Centre for Social Innovation and Entrepreneurship was launched in 2011 at the University of Cape Town. A growing number of academic studies have also examined social enterprise, social entrepreneurs, and their ventures in South Africa (see Urban 2008; Karanda & Toledano 2012; Littlewood & Holt, forthcoming). At a country level, South Africa faces numerous, “wicked” sustainable development challenges (after Rittel & Weber 1973). These include: the implications of an estimated 6.3 million people nationally living with HIV/AIDS (UNAIDS 2014); entrenched inequality, with South Africa’s Gini index score of 63.1 making it one of the most unequal societies in the world (World Bank 2009); chronic unemployment, estimated at 25% (Trading Economics 2014), with particularly high levels amongst young people; and limitations in skills and education linked to failings in pre and post-apartheid education. Social enterprises and social innovation are viewed as key mechanisms for addressing such challenges, with organisations like the African Leadership Institute, established by Archbishop Desmond Tutu and underpinned by the philosophy of Ubuntu (Mangaliso 2001; West 2013), advocating social enterprise and wider ethical business as forces for positive societal change. Drawing upon qualitative primary data collected during in-country case study research, quantitative survey data, and analysis of secondary documents and wider literatures, this paper explores social enterprise business models, and the wider landscape of social enterprise and innovation in South Africa. Discussions are divided into three main parts: Part A explores historical, contextual and conceptual issues surrounding the emergence of social enterprise in South Africa; Part B focusses on the identification and characterisation of social enterprise business models in South Africa informed by stakeholder theory; Part C reflects on the institutional trajectories and processes shaping social enterprise business models and activity in South Africa.