Although rural communities may lack talent, technology, equipment, and funds, such communities often possess abundant alternative resources found only in the local area, such as indigenous cultures, cultural landscapes, stories, folk wisdom, native species, historic sites, cultural crafts, and local cuisine.
2.3.2. Social Mission and Enterprise Governance of Community Industry
The original intention of a social enterprise was to solve social problems. However, we should not forget that the enterprise itself is also a small society, and it must manage people and money. Thus, social enterprises must consider their profits, as well as many other aspects. Social Enterprise Insights suggests that entrepreneurs construct a triangle of social responsibilities, organizational responsibilities, and enterprise promises in order to achieve their original intention. The first angle, social responsibilities, is more than the enterprise itself, meaning that it must be recognized by a third-party to publish a public welfare report for the public to learn about the operations of the organization; or, the enterprise can apply for the certification of B Lab in the United States, and such certified enterprises can be given the social responsible title of B Corp. The second angle is organizational responsibilities. Company law stipulates that board of directors and shareholder meetings must be held before the end of June each year. The executive team should prepare the previous year’s business report, financial statements, and profit and loss provision table, and submit them for the board of directors’ approval and for the recognition of the shareholders’. If these procedures are not conducted, then the enterprise violates the law. However, above the legal bottom line, social enterprises can also increase disclosure of information, strengthen governance transparency, and demonstrate the social benefits of implementing business operations. The third angle is the enterprises promises. Company law stipulates that if the company has a surplus, it must allocate a certain percentage of it to its employees. However, if social enterprises wish to demonstrate their commitment to the long-term prospect, they may set up a special surplus reserve fund, regulate its use in through the company’s regulations, and continue to develop its social mission.
Social enterprises should not forget their original intention. In addition to focusing on product quality and pursuing profit growth, they should return to their beginning point and conduct dynamic adjustment to meet beneficiaries’ real needs, maintain stable service energy, and continue to exert their influence.
2.3.4. Community Industry and Governmental Support
All emerging industries need policy support, and this is also true for social enterprises, meaning a combination of business value and public welfare. In recent years, social enterprises in Taiwan have accumulated a lot of experience in local economy and social enterprise innovation. This wave of energy has also drawn the attention of public departments, and such departments have launched related policy support by outlining the complete appearance of Taiwan’s social enterprise policy development through mutual inspections and studies from the two perspectives of government and civil enterprises. In 2014, the Executive Yuan launched a three-year Social Enterprise Action Plan with a budget of NTD160 million, which invited the Ministry of the Interior, Ministry of Finance, Ministry of Education, Ministry of Economic Affairs, Ministry of Transportation and Communications, Ministry of Health and Welfare, and Ministry of Labor to cooperate and build up a favorable environment for Taiwan’s social enterprise innovation, entrepreneurship, growth, and development, according to the four strategies of amending regulations, building platforms, raising funds, and advocating development. When considering that social enterprises in Taiwan are still in the beginning stage, the Executive Yuan at that time decided to use administration-before-legislation as the overall policy guidelines, in order to set free the creativity of nongovernmental organizations. It did not presuppose any excessive legal restrictions; instead, it targeted the promotion of the development of social enterprise ecosphere.
In response to the limitations of current laws and regulations in Taiwan, and whether legislation of social enterprises should be put forward, in recent years, industrial, official, academic, and research circles have discussed such issues and have offered suggestions. Since President Ing-wen Tsai took office in May 2016, due to the beginning of company law amendments, a new wave of discussions regarding social enterprise legislation have occurred. While the company law amendment is still in progress, the amendment direction has slightly loosened the existing provisions of the company law and added new public welfare company chapters.
Social enterprises are flourishing in Taiwan’s civil society by solving social problems with social innovations and business models. For the government, the contributions of social enterprises can be mainly categorized into the following three types: gathering power in crisis and reconstructing local industries; combining community management and creativity and setting up local economy models for rural areas; and, creating employment for all people and enabling self-sufficiency through empowerment. A review the implementation of past policies shows that, due to the ossification of administrative and operational procedures, policies will occasionally cause inconvenience to civil and social enterprises, meaning that the goodwill of policies is wasted. When reviewing the government’s policy guidelines for supporting social enterprises, as seen from the perspective of social enterprises, future governments are expected to learn from past experience in general and not be kidnapped by the key performance indicators. In action, the private sector, the government, and private departments have their own fields, and they should focus their works in their fields.
“Something only the government can do” is actually creating a sound regulatory environment for social enterprises, as they can use innovative thinking to release and activate idle assets in order to support the development of social enterprises.
To utilize such resources, an economic process must be followed that always proceeds along a basic path: product, merchandise, service, experience, and then brand creation. Any industry can use these processes to increase its economic value and create a brand [30
]. The Economic Process is illustrated in Figure 1
After reviewing relevant literature regarding the planning and establishment of community industries and the development of the Multiple Employment Promotion Program, six major dimensions were identified for the successful development of community industries as SEs: core values, organizational management, key competencies, distinguishing features, strategic resources, and value-added design, as shown in Table 4
, and the dimension map of community development industries in Figure 2
The development of the community industry aspect in Table 4
is similar to the Strategic Triangle of the social enterprises strategy management by Moore & Khagram. Moore’s model can analyze social enterprises because it emphasizes the importance of defining the value of each organization’s quest for creation. In this case, the social enterprise has a dual value, since it strives to achieve the organic combination of social value and economic value. When it comes to social enterprise, the implementation of the mission is equivalent to creating [31
The items that are covered by organizational core values are social welfare, environmental protection, ecological conservation, cultural protection, and employment promotion, whereas action plans, such as environmentally friendly consumption, food miles, low carbon living, and employment diversity are social commitments. The core values can be considered to be the catalysts for shaping Taiwan’s SE ecosystem and they have been shaped by research, training, guidance, publicity, and cooperation with SEs, NPOs, communities, governments, investors, incubators, and scholars. Beginning with the article “Creating Shared Value” that was published by Michael E. Porter in 2011, shared values are those that when dealing with societal needs and difficulties, create social as well as economic values. Shared values look to expand total economic and social value. Enterprises can create social value by redefining the productivity of traditional value chains, which in turn creates economic value [32
Organizational management refers to the chief executive officer, project managers, and trained volunteers. Such management should actively seek to continue receiving social finance and fundraising while developing SEs. Organization type and focus continue to be selected based on profitability. To date, most SEs are focused on topics, such as technological innovation, culture, education, and fair trade, possibly because these are the easiest areas to turn a profit without relying on public donations. Organizations that promote CSR are mostly focused on environmental protection issues, partially because the trend toward environmentally sustainable practices is also an opportunity for future development. The commercialization of NPOs is not separate from their organizational mission, and these organizations mostly focus on disadvantaged groups [33
Key competencies are based on local characteristics. Yang (2014) stated that SEs are defined by their nature, social influence, and operations; thus, SEs emphasize social issues that relate to their founding principles (e.g., environmental protection, care for disadvantaged groups, employment assistance, cultural preservation, and fair trade). However, SEs can also be defined during their operations, such as through a moving story, a luxurious product, or a dignified work [34
]. Although their social influence comes from the social value that they create, the primary objective of SEs is ultimately to maintain continued operations. This is true across such varied examples as the Gaomei Wetlands experience and the Dajia Matzu Pilgrimage Procession, as well as local delivery services, guide services, visitor centers, and customer services.
Distinguishing features are vital to the success of communities or organizations, and these often take the form of accomplished individuals or unique cultural geography. By analyzing their thought patterns or psychological structures, elements that are crucial to SE successes can be extracted [35
]. Examples of distinguishing features for SEs can be seen at the Joyce McMillan Erhlin Happy Christian Home in Changhua County, which has a reputation for professional care being gained from its dealings with disabled individuals; the L’olu tribal village in Heping District, Taichung, which has social capital from its joint kitchens; and, the Long-Yan-Lin Welfare Association in Zhongliao Township, Nantou County, which is known for its volunteer clinics.
Strategic resources link community resources to a common marketing strategy. If SEs have their own unique and innovative business models integrating strategic resources with sustainable development [36
] or they pursue large-scale investment projects with a commitment to give back to surrounding communities, then it is possible for SEs and local communities to jointly share in successes [37
]. Linking strategic resources can take many forms, such as: the resource linking of Taiwan ku fish, the Tanayiku River, the Formosan ku fish festival, and the Tsou-style cuisine of the Saviki village in Alishan; strategic alliances, such as the Right Bank Alliance of Linbian Stream and the Seven Rainbow Villages of Jiujiu Feng; and, Internet marketing, such as the Taiwan Story Box with multiemployment and e-commerce shopping platforms.
Value-added design refers to the innovative ideas or practices of a single enterprise or organization that benefit all relevant stakeholders, which may serve as benchmarks or models for imitation. To facilitate ever-changing societal needs, knowledge is continuously generated and spread (O’Mahoney, 2007) [39
]. Enterprises or organizations promoting their designs or activities will imitate, learn, and form alliances in order to determine the most effective means to communicate with other enterprises or organizations. A consequence of such exchanges is that business ethics spread and influence other enterprises to imitate and follow suit, which promotes a change in the ethical environment (Wu, 2016) [40
]. Thus, SEs should have forward-looking designs to facilitate this diffusion effect.
The entrepreneurial designer William McDonough called for a production and consumption system that enables everyone to live a life where they are free to pursue happiness and no longer subject to excessive control; that is, oppression by poor design (Derry, 2002) [41
]. In discussing how to reduce the human ecological footprint, McDonough said that human industrial civilization endangers nearly every ecosystem on Earth; there is no problem with the design of nature. The problem is with human design (McDonough, 2002) [42
]. Community development organizations and civil organizations focus on their own strengths in the development of community industries. The Multi-Employment Promotion Program aimed not only to build supportive social mechanisms, but also to create sustainable local employment. Therefore, this study suggests that recruiting from diverse backgrounds serves as a pathway for the transition of community industries into SEs; that is, community industries lead to diverse employment, which in turn lead to SEs, and result in sustainable employment. The overall relational paths are illustrated in Figure 3
In Figure 3
, the overall relational paths of SEs are illustrated based on the interaction and the sequential progress of the six major dimensions of community industry development. Taken together, they promote the sustainable development of rural communities and construct supportive SEs. This is a virtuous cycle of progress that is driven by commitment to the core values of SEs alongside organizational management overseeing the cooperation of public and private sectors in the implementation of the Multi-Employment Promotion Program.
According to 2017 statistics by the Ministry of Labor and Ministry of Economic Affairs regarding the number of SEs in Taiwan, there are currently 384 SEs and 11,343 potential SEs, as listed in Table 5
The “2017 Survey of Social Enterprises” was conducted by the UDN survey center (2017) (Table 6
) to discuss and examine SEs from the dimensions of “public awareness of SEs” and “the current status of SEs in Taiwan”. It outlined the awareness of Taiwanese society toward SEs and potential directions for SE improvement and was the first opinion poll on the status of SEs conducted in Taiwan. The survey was performed through a dual-frame survey of landline and cell phone numbers using random sampling; 1077 valid responses were collected. The survey results indicated that nearly 60% of SEs in Taiwan have been established for less than five years and 40% were still experiencing losses. Primary challenges facing SEs in Taiwan were recorded as “human resource shortages” and “a lack of marketing channels”. The awareness of the general public toward SEs did not increase in the two years between the surveys, with only 19.9% having heard of SEs. However, more people identified with the SE business model placing emphasis on both profit and public welfare. Specifically, 64% were willing to pay higher prices in order to purchase SE products or services, and 73% of people were happy to recommend SE products. In a further survey on the status of SEs in Taiwan, of interviewed SEs, 69.4% were registered as companies or trade names and 29.8% were NPOs, such as cooperatives, foundations, associations, and academic units. SEs in Taiwan are mostly young enterprises; 57.9% of interviewed SEs had been established for less than 5 years, 21.2% had been established for 6–10 years, and only 20% for more than 10 years. The social issues that are emphasized by SEs as important to them were extensive. Allowing for multiple responses, nearly 30% included food and agricultural innovation and services in rural areas or for disadvantaged groups. The percentages for environmental protection, promoting employment, and social concerns were all approximately 20%.
SEs in Taiwan are relatively low tech when compared with their counterparts globally. Most engage in host matching and can be easily imitated and replicated. Operations may become difficult for these SEs once well-funded enterprises enter the market. Table 6
summarizes the social enterprise survey. Table 6
shows that 2015 and 2017 have no significant impact on the increase or the decrease in social enterprise support and product consumption experience, which seems to coincide with the features of the small size of Taiwanese social enterprises and the lack of systematic experience.