Sougha: A public-owned establishment, assessed as a social enterprise in the UAE by SARAH EMMANUELLE JOHNSEN submitted in accordance with the requirements for the degree of MASTER OF ARTS in the subject DEVELOPMENT STUDIES at the UNIVERSITY OF SOUTH AFRICA SUPERVISOR: DR V E VILLAGÓMEZ MORALES FEBRUARY 2015 DECLARATION I declare that Sougha: a public-owned establishment, assessed as a social enterprise in the UAE is my own work and that all the sources that I have used or quoted have been indicated and acknowledged by means of complete references. Author Signature: Date: 23/02/2015 Sarah Emmanuelle Johnsen, Student number: 35038101 ii ACKNOWLEDGMENTS The motivation to research about Sougha stems from my meetings with women artisans in the remotest parts of the UAE. The high quality of their skills, the love of their traditions, and their unflinching loyalty to Sougha inspired me to start this research project. Mouza Obaid, the CEO of Sougha, kindly advocated my project to KFED and ensured that all the paperwork was in order. I had the privilege to meet Leila Ben Gacem when she started and managed Sougha in its early years. The final form of this project was shaped through our many conversations that I am indebted to my research supervisor, Dr. Victoria Elizabeth Villagómez Morales, who spent countless hours answering my questions through emails and Skype. Thank you for your guidance, your advices, and for your constant moral support. This research project is culminating twelve years of part-time studies at Unisa, which would have never been possible without the patience and understanding from Suzanne and Abel, who grew-up with a studying mum. Thank you, my dear Geir, for your unconditional support and love, always. iii ABSTRACT The United Arab Emirates are challenged to include the national workforce into their increasingly diversified and knowledge-based economic vision. The federal Khalifa Fund for Enterprise Development incubates Sougha, a non- profit company acting as market intermediary for Emirati artisans. This study aims at providing an insight into Sougha‘s potential to become a social enterprise. A pragmatic and exploratory approach is followed. An iterative process underpins the concept of social enterprise from established literature, re-visits it through a social constructivist lens as an emerging topic in the GCC region, and benchmarks Sougha against two selected social enterprise frameworks, based on data analysis from documents and interviews. Sougha demonstrates social value creation while its commercial value creation is restricted to social mission activities. Financial motives are insufficiently reflected in Sougha‘s strategic documentation; leaving doubt to whether Sougha is genuinely seeking financial sustainability, which endangers its eligibility as a social enterprise. KEY TERMS Social enterprise, United Arab Emirates, GCC, economic empowerment, culture preservation, capacity building, social inclusion, social constructivism, public sector, benchmark. iv TABLE OF CONTENTS Declaration ..................................................................................................... ii Acknowledgments ........................................................................................ iii Abstract ......................................................................................................... iv Key terms ...................................................................................................... iv Table of contents ........................................................................................... v List of tables .................................................................................................. ix List of figures ................................................................................................ ix List of abbreviations ...................................................................................... x 1 Study outline ........................................................................................... 1 1.1 Introduction ................................................................................................ 1 1.2 Study background: a multifaceted overview of the UAE ............................ 2 1.2.1 The region‘s main challenge: curbing unemployment through the development of the private sector. .............................................. 2 1.2.2 The UAE: a presentation .............................................................. 3 1.2.3 The political structure ................................................................... 5 1.2.4 Socio-economic development imperatives ................................... 5 1.2.5 A unique demographic profile ....................................................... 7 1.2.6 A top-down commitment to development imperatives ................ 11 1.3 Problem statement and research question .............................................. 17 1.4 Purpose of the study and research objectives ......................................... 17 1.5 Scope, expected limitations and outcomes .............................................. 18 1.5.1 Scope ......................................................................................... 18 1.5.2 Expected limitations ................................................................... 19 1.5.3 Expected outcomes .................................................................... 20 1.6 Definitions and clarifications of terms ...................................................... 21 1.6.1 Sougha ....................................................................................... 21 1.6.2 Establishment ............................................................................. 21 v 1.6.3 Khalifa Fund for Enterprise Development................................... 21 1.6.4 Social enterprise ........................................................................ 22 1.6.5 Criteria........................................................................................ 22 1.6.6 Attribute ...................................................................................... 22 1.6.7 Benchmark ................................................................................. 23 1.6.8 Gap analysis .............................................................................. 23 1.7 Dissertation structure ............................................................................... 23 1.8 Conclusion ............................................................................................... 24 2 Literature review ................................................................................... 25 2.1 Literature sources and referencing .......................................................... 26 2.2 Review of literature related to social enterprise ....................................... 29 2.2.1 Review of literature related to the social enterprise concept ...... 31 2.2.2 Sparse literature about social entrepreneurship in the GCC/UAE .................................................................................................. 33 2.2.3 Literature review about the social constructionist approach ....... 34 2.2.4 From the review: Identified frameworks...................................... 35 2.3 A review of the contextual literature ......................................................... 37 2.3.1 Unemployment in the MENA/GCC literature .............................. 37 2.3.2 Literature about the UAE and its socio-economic development imperatives ................................................................................ 39 2.3.3 Demographic literature ............................................................... 43 2.3.4 Macro socio-economic development literature ........................... 46 2.4 Conclusion ............................................................................................... 48 3 Revisiting the concept of social enterprise ........................................ 50 3.1 The origins of the concept........................................................................ 50 3.2 The causes behind the escalation of social organisations ....................... 51 3.3 Civil society, the state and the private sector: an increasingly transactional relation. ............................................................................. 52 3.4 The dual organisational nature of social enterprise ................................. 55 vi 3.5 The suitability of Western-based frameworks as a benchmarking method in a Middle East Context ............................................................ 58 3.5.1 Differing conceptual meanings: the functionalist approach necessary, but not sufficient ...................................................... 58 3.5.2 Social constructionism theory ..................................................... 59 3.5.3 The situation of social enterprise in the UAE.............................. 63 3.5.4 Two frameworks selected from the literature review .................. 66 3.6 Conclusion ............................................................................................... 73 4 Sougha .................................................................................................. 74 4.1 The Sougha Initiative and Sougha ........................................................... 74 4.1.1 A presentation of the Sougha Initiative ....................................... 74 4.1.2 A presentation of Sougha ........................................................... 75 4.1.3 Blurred boundaries