Invited Paper Social enterprises as supply-chain enablers for the poor ManMohan S. Sodhi a, * , Christopher S. Tang b a Cass Business School, City University of London, UK b UCLA Anderson School, University of California Los Angeles, USA article info Article history: Available online xxx Keywords: Economic sustainability Bottom of Pyramid Social enterprise Micro-entrepreneurs Poor as producers Entrepreneurship Supply chain abstract Many social enterprises use the poor as producers to improve their living standards. We seek to answer how they do so, from a supply chain perspective. Drawing on various successful social enterprises in Afghanistan, Africa, Bangladesh, India, Malaysia, Mexico, Nepal, Philippines and Sri Lanka, we look at the material, information and cash flows of the micro-entrepreneurs for these social enterprises. We show how a social enterprise helps its associated micro-entrepreneurs by improving the latter’s supply chain operations via: (1) easier access to financial credits; (2) easier access to market information; (3) easier market access; and (4) better access to supplies and raw materials and higher productivity through better health and equipment. We then speculate on how to make social enterprises economically sustainable and propose that social enterprises would be better off enabling micro-enterprises rather than running production operations themselves. Ó 2011 Elsevier Ltd. All rights reserved. 1. Introduction Recognizing there are billions of under-privileged class of people due to social or economical reasons, 1 many social entre- preneurs have made heroic efforts in helping the poor by creating innovative business models to create social value (not just private value) that mainstream businesses do not always deliver [14]. Making the poor as producers (PAP) e we refer to these as micro- entrepreneurs e creates jobs and increases income levels and improve their quality of living e safer water and foods, health services, education, etc. 2 [10]. 3 This article seeks to answer how social enterprises create value for the micro-entrepreneurs from a supply chain perspective. The significance of this question is that answers can help address another question: how to make social enterprise more economically sustainable. We use multiple social enterprises for our research in the manner of London et al. [12], whose work we seek to comple- ment with this paper, to analyze successful social enterprises and their micro-entrepreneurs from a viewpoint of cash, material, information flows along a supply chain. In examining social enter- prises in different domains and continents who build a variety of business models with and around micro-entrepreneurs, we do not include cooperatives like Amul, an Indian dairy cooperative [5]. Thus, not all types of social enterprises come under our consider- ation, only those who work with micro-entrepreneurs. Our contribution to the rapidly growing social enterprise liter- ature is a systematic understanding of social enterprises and the supply chains of which their associated micro-entrepreneurs are a part. Our work complements London et al. [12], who examine value creation to classify different social enterprise ventures. Our analysis is based on supply chain analysis instead, as we seek to identify how various social enterprises help stabilize and strengthen supply chain flows for micro-entrepreneurs. Although our work is at an early stage, we believe it provides a good starting point for seeking ways to improve the economic sustainability of the social enterprises themselves. We provide avenues for further research. Our paper is organized as follows. In Section 2, we present a social enterprise that sought to help the poor to gain access to water for production and consumption but failed in the end. We argue that one reason for its failure is that PlayPumps did not enable consumers or micro-entrepreneurs (in the sense of the other social enterprises in our sample) when we revisit PlayPumps in Section 8. In Section 3, we argue how one can view social enterprises as enablers that can help micro-entrepreneurs to * Corresponding author. E-mail addresses: m.sodhi@city.ac.uk (M.S. Sodhi), ctang@anderson.ucla.edu (C.S. Tang). 1 World Bank reported that there are over 2.6 billion people earning $2 per day [6]. Throughout this paper, we use the term “poor” as a generic term to refer to the under-privileged class of people due to social or economical reasons. 2 According to the 2006 United Nations Human Development Report, in devel- opment countries, over 1 billion people have inadequate access to water, 2.6 billion lack basic sanitation, 400 million with no access to safe water, and millions of women spend several hours per day collecting water. See www.poverty.org for more details. 3 Micro-entrepreneurs are typically one-person enterprises e merely eking out a living in the so-called informal sectors who make $5/day or less, often much less. Contents lists available at ScienceDirect Socio-Economic Planning Sciences journal homepage: www.elsevier.com/locate/seps 0038-0121/$ e see front matter Ó 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.seps.2011.04.001 Socio-Economic Planning Sciences xxx (2011) 1e8 Please cite this article in press as: Sodhi MS, Tang CS, Social enterprises as supply-chain enablers for the poor, Socio-Economic Planning Sciences (2011), doi:10.1016/j.seps.2011.04.001