Social Entrepreneurship in Germany- current insights
Jun 04, 2019

Social Entrepreneurship in Germany- current insights

Germany has a long-standing tradition of social entrepreneurs – beginning with Friedrich Wilhelm Raiffeisen, who helped initiate the cooperative movement in the 19th century. He created the Raiffeisen organization for poor farmers who could not afford to buy seeds and fertilizer but could buy them cheaper together. The “green credit” provided for them to pay for seeds and fertilizer with the later harvest.

The entrepreneur Ernst Abbe, owner of the Carl-Zeiss-Werke in Jena, regarded the entrepreneurial profit as a “public good”. It had “to serve the common good”. He introduced the eight-hour day to the workers and transferred the optics company to a foundation in 1896.

It was since about 1998 that the idea of Social Entrepreneurship has been popularized in Germany, mainly through the establishment of the Schwab Foundation1 by the World Economic Forum. However, Muhammed Yunus brought new impetus to social entrepreneurship worldwide mid of 2000. With his Grameen Bank in Bangladesh, he developed microcredits for the poor, who were thus able to build up a livelihood. In 2006, Yunus was awarded the Nobel Peace Prize.

“The potential of social enterprises is enormous,” says McKinsey2 partner Matthias Daub. Alone in Germany, there are approximatively more than 1,700 social entrepreneurs whose business ideas help to improve the social system.

One of these social entrepreneurs is the teacher Martin Aufmuth from Erlangen, who hopes to make the world a better place with his business idea. With his social start-up One Dollar Glasses3, he has developed glasses that can be built anywhere for a dollar. „150 million people around the world would need a pair of glasses. Many of them cannot go to school for that reason, cannot work and can – as a consequence – not provide for themselves and their families”4 says Aufmuth.

One Dollar Glasses is not only intended to make a better life for those with impaired vision, but they are also intended to create jobs. This is why Aufmuth and his team are training local people to become spectacle makers in poor countries. They measure the eyesight, build the glasses and sell them locally – be it in the African steppe, in the jungle or in the urban slums. “We also bring homeless people and people from the favelas, who would otherwise have no prospects, into their wages and bread,” says Aufmuth (idem).

If in the past entrepreneurs who chose morality over profit were ridiculed as idealists by the outside world, nowadays the social entrepreneurship has become much more professional and provide important impulses. The social start-ups were long regarded as the “dirty kids of the start-up scene”, observed Martina Köchling, Head of Responsible Entrepreneurship at the KfW Foundation5.

Nevertheless, as Odin Mühlenbein of Ashoka observes: “in Germany, innovation is primarily understood as technical innovation, but there are also social innovations.”

More and more social start-ups are now using modern software for social improvements. Apeiros 6from Wuppertal, for example, supports teachers and youth welfare offices in identifying potential

school drop-outs early on and providing them with help. Every year, high costs occur due to extreme drop-outs. Apeiros, founded in 2005 by Stefan Schwall, has now 90 employees.

Often the ideas behind the social start-ups arise out of necessity like in the case of Icho7: Steffen Preuß’ grandmother suffers from Alzheimer’s and he could hardly communicate with her. That’s why he and his two co-founders of Icho developed an interactive therapy ball for dementia patients. It reacts with sound, light, and vibration to all external stimuli and can also tell fairy tales. “My grandmother came to life when her beloved Roy Black sang while shaking the ball,” says Preuß. The ball will soon be ready for the market and will cost 32 Euro per month including interactive programs. The flashing ball is also suitable for disabled and depressed persons and people in the process of rehabilitation.

It was the Social Impact Lab in Duisburg that supported this business idea together with many other ideas8. There are eleven locations nationwide that coach founders with social ambitions. Since 2011 426 social founders have been accompanied by the Social Lab9. One in two social entrepreneurs is a woman – significantly more than in other start-ups, where the founders’ female quota is of only 14.6 percent according to the Start-up Monitor10.

As a conclusion, we can say that there is a great diversity among the social start-ups in Germany from enterprises that operate in the medical field like Discovering Hands, Lorm Hands, Rubycup to travel providers like that arrange sustainable travel.



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