Social Enterprise Journal

Social enterprise in the United Arab Emirates

Sarah Johnsen,
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SEJ
13,4
392
Received 6 October 2016
Accepted 1 December 2016
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Social Enterprise Journal
Vol. 13 No. 4, 2017
pp. 392-409
© Emerald Publishing Limited
1750-8614
DOI 10.1108/SEJ-09-2017-0042
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1750-8614.htm
Social enterprise in the United
Arab Emirates
Sarah Johnsen
Independent Researcher, Abu Dhabi, United Arab Emirates
Abstract
Purpose – This paper aims to summarise a contribution to the International Comparative Social Enterprise
Models (ICSEM) Project from the United Arab Emirates (UAE). It particularly highlights the relevance of the
social constructionist approach adopted in the study to investigate and make sense of the social enterprise
concept as an imported concept in a new environment.
Design/methodology/approach – This approach is used as a thread to follow through the structure
proposed by the ICSEM Project, namely, to look at the concept in context, to identify social enterprise models
and establish a typology, as well as to describe institutional trajectories shaping the models. This paper
highlights the constructs and institutional trajectories shaping the concept, and the main findings of the study
when identifying the models and establishing the typology, based on an in-depth survey of 12 social
enterprises in the UAE.
Findings – While this typology can be considered as a preliminary one, it reveals creative recurrent models,
with the state and private sector involved as incubators. Although the UAE offers a tax-free environment, the
lack of a legal and regulatory system conducive to social enterprises seems to hamper the opportunities for
them to develop and scale up.
Originality/value – This contribution is the first study to investigate the ecosystem of social enterprise
and its deriving models, and to propose a preliminary typology in the UAE.
Keywords Public sector, United Arab Emirates, Social enterprise, Social constructionism,
Social enterprise models
Paper type Research paper
Introduction
Social enterprise as a new, imported organisational structure and emerging field in the socio-
economic ecosystem of the United Arab Emirates (UAE) gained massive public attention in
the last seven years. Pioneering research efforts to explore the burgeoning social enterprise
phenomenon in the UAE resulted in a contribution to the International Comparative Social
Enterprise Models (ICSEM) Project, carried out in close cooperation with the EMES
International Research Network, which aims at building knowledge about emerging or
already well-established social enterprise concepts and models in a variety of contexts.
A mental representation of social enterprise can be generated from various perspectives,
depending on the investigator’s background and interest and the theoretical approach used
to study the concept. The concept itself may acquire varying connotations contingent to a
given context and its inherent constructs and institutions, and the functional and
operational models of social enterprise taking place in this context. The level at which the
concept is studied, as an alternative organisational model, or as an emerging public policy
field, also adds multidimensionality to the concept. While the organisational structure of
social enterprise has been a popular research topic in recent years (Grant and Dart, 2014a),
social enterprise as a field among policy makers has also received increased attention
(Sepulveda, 2014).
 This variation of perspectives stands as an idiosyncratic component of the concept, with Social
its changeable nature emphasised in the different definitions proposed by Western enterprise
prominent schools of thoughts. Still, consensus is reached in considering social enterprise as
an organisation combining attributes from commercial businesses and social organisations.
A definitional perspective can be taken either from the for-profit standpoint, defining social
enterprise as “businesses that trade for social purposes” (Sepulveda, 2014), or from the non-
profit standpoint, as organisations adopting commercial methods to achieve their social
objectives. The EMES International Research Network further provides a composite 393
approach, defining the concept according to economics and entrepreneurial, social and
governance-related attributes (Defourny and Nyssens, 2012). These standpoints remain
valid in the context of the UAE.
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An increasing number of authors and researchers have pointed out the scarcity of
academic research about entrepreneurship in peripheral contexts (Thomas and Mueller,
2000; Kerlin, 2017). In particular, the void of research and inconsistencies of the existing
research is emphasised by Abdou et al. (2010) in their report on social entrepreneurship in
the Middle East, where the need for a clear definition of the concept was put as their first
recommendation. Furthermore, the conceptual situation of social enterprise in the UAE is in
need to be re-defined within the socio-economic, political, religious and cultural context of
the region (Locke, 2015).
The UAE contribution to the ICSEM Project took the shape of a working paper with a
structure articulated around the Project’s objectives, for the sake of results standardisation
between contributions from the various countries involved in the project, but it also adopted
a social constructionist lens to make sense of the concept in context and to explain the role of
institutional trajectories, and this specific approach also served as a theoretical basis for the
elaboration of a typology. In that respect, the present article draws on some of the working
paper’s features, first introducing the social constructionist perspective as a method
followed by a comprehensive overview of the various constructs, including enabling and
disabling institutions, present in the UAE and believed to influence how social enterprise is
understood and shaped. In the following section, a brief overview of the two-step
methodology adopted to establish the typology, and the typology’s highlights, are provided.
The last section is dedicated to concluding comments and further directions for research.

A concept in context explained through a social constructionist lens

The term “social construction” was introduced in social sciences by Berger and Luckmann
(1967) in their seminal book, The Social Construction of Reality: A Treatise in the Sociology of
Knowledge. It can be defined as a process whereby a given society’s members make sense,
over time, of their relation to each other, interrelate and organise themselves in repeated
patterns, constructing rules, habits or heuristics and communicating them to other
members, through the institutionalisation of their respective role. In turn, when these rules
are endorsed by individuals belonging to a society, they become institutions inherent in this
society. As a consequence, institutionalised roles and categories become the socially
constructed “reality” of that given society.
A social constructionist approach is understood in this study as a methodological
instrument shifting the focus of the social enterprise concept from an ontologically
organised structure to an organisation or a field negotiated through social constructs, and
hence representing the reality in a given context.
Social constructionism is maintaining permeable links with cognitive constructivism,
which is linked to psychology and refers to the aptitude of the human mind to process
information from the external world and act henceforth (Martin and Sugarman, 1997). As
 SEJ such, it is an investigation method which is intrinsically able to combine the micro level,
13,4 represented by an individual, member of an organisation and/or a society, the meso level,
represented by an organisation and the overall context, including social, economic,
historical, political, cultural, religious and linguistic elements (Chell, 2008; Lindgren and
Packendorff, 2009; Grant and Dart, 2014a).
The need to look beyond a functionalist approach when investigating social enterprise as
394 an organisational entity and as a field is well documented (Chell, 2007; Grant and Dart,
2014b; Sepulveda, 2014). The functionalist approach has been the theoretical backbone for
social enterprise research, asserting the concept as “a distinct and novel organisation form”
(Grant and Dart, 2014a) and focussing on the common features of social enterprises as a
distinct type of organisation. This approach ruled as the most pertinent and practical, but
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there is an increasingly shared perception that investigating the social enterprise concept
involves more than the search for common attributes (Jones and Keogh, 2006).
The functionalist and social constructionist approaches are not conflicting. Rather, in the
quest of a universal method to agree on a concept of social enterprise in increasingly diverse
contexts, social constructionism should be adopted as a complementary approach for two
reasons.
First, the method finds its rationale in its flexibility and multifaceted nature. The social
constructionist perspective is underscored in the literature by its association with several
theoretical lines, each allowing for different methodological variations. Chell (2008) proposes
to study the entrepreneur’s personality through Giddens’ structuration theory (Giddens,
1984), which resolves the seemingly conflicting dimensions of individual agency versus
structural constraints. Lindgren and Packendorff (2009) propose to look at gender theory
and critical management theory to grasp the main mechanisms and biases pertaining to
entrepreneurship. Grant and Dart (2014a) offer a relevant work for the unfolding of this
paper, depicting not only social enterprise as an organisation internally but also externally
motivating to include specific desirable social constructs as part of their identity (or avoid
undesirable ones). Indeed, in her macro-institutional social enterprise framework, Kerlin
(2013) identifies formal and informal institutions of a given country to be the main actors in
the shaping of social enterprise models in that given context.
Second, the method allows to examine the reality prevailing in a certain context (Chell,
2008), and thereafter test the relevance of the concept’s “Westernized” attributes when they
are imported in that given context. There is a consensus, in Western literature, about the fact
that entrepreneurship thrives when connoted with values such as “individualism,
rationality, risk-taking, wealth generation, self-interest, autonomy, achievement and self-
reliance and long-term orientation” (Kayed and Hassan, 2011), but entrepreneurship based
on these values tends to increasingly loose its relevance, the farther from the Western world
they are applied (Thomas and Mueller, 2000; Lindgren and Packendorff, 2009). Criteria
defining and sometimes enabling the setting up a social enterprise are constructs that have
been built by and within Western belief systems. According to Clegg et al. (2007), “these
belief systems are shared assumptions that are socially constructed: they do not exist
objectively in reality but are culturally, socially and cognitively developed assumptions
about reality”. These Western-generated assumptions are imported in other contexts to
serve a socio-political agenda which differs depending on geographical and ideological
considerations (Grant, 2013). Under these circumstances, the social constructionism lens
offers a platform with a dual investigation possibility: First, it explores the limitations of
Western-based social enterprise methodology when applied in other contexts. Second, it
allows for an examination of constructs forming the societal reality within which the social
 enterprise concept is situated, thus ultimately revealing innovative social enterprise models Social
that would not have been identified under a traditional functionalist approach. enterprise
Constructs impacting upon the imported social enterprise concept
The primary reasons why the newly introduced concept of social enterprise has been given
so much public attention in the past few years are related to its perceived value as a solution
to the identified national socio-economic development imperatives. This value entails,
among other beneficial outcomes, a powerful capacity-building momentum that takes place
395
within several societal layers: at the individual level, targeting social entrepreneurs; at the
community level, targeting beneficiaries; at society level, targeting welfare and cohesion;
and for the private sector, encouraging to look at a double bottom line and improved
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governance. The dual nature of social enterprises, which combine economic and social value
creation, is also highly appreciated, as it is in line with standards of sustainable social
development through increased economic opportunities and employment generation.
Paradoxically, it is also the concept’s dual nature that arouses resistance to its adoption, as it
does not fit within any of the traditional logics of action prevalent in the UAE. As such, the
concept is in constant negotiation with the main constructs present in the region, and with
the existing institutional landscape. A brief introduction of the UAE precedes a detailed
presentation of the different constructs, including institutions promoting and restraining the
concept.
The UAE is a young nation; established in 1971 by Sheikh Zayed bin Sultan Al Nahyan,
it is composed of seven emirates: Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain,
Fujairah and Ras Al Khaimah. The UAE is a member of the Gulf Cooperation Council (GCC),
which also includes all the other Arab states of the Persian Gulf, except for Iraq (i.e. Bahrain,
Kuwait, Oman, Qatar and Saudi Arabia).
The UAE is an economy rich in natural resources (IKED, 2010) and is ranking seventh in
terms of proven reserves of both crude oil and natural gas. In line with the other GCC
nations, the UAE economy is operated as a free market, but with most public utilities and
important trades being state-owned. The UAE is resolutely diversifying its economy away
from oil dependency, shifting from low-skilled work-intensive activities to highly skilled
ones (Soto and Haouas, 2012). For example, with oil revenue reinvested into infrastructures
such as “a world-class sea port, airport, and communications network as well as commercial,
industrial, and residential real estate developments” (COAD, 2013), the oil-rich emirate of
Abu Dhabi has managed a successful inversion of the proportion oil/non-oil in the GDP
during the past two decades.

Identified socio-economic development imperatives linked to a social contract

in transformation
All GCC nations unanimously agree that job creation is a top priority to convert the growing
number of young jobseekers from a “national security hazard” (Forstenlechner et al., 2012)
into “a tremendous opportunity, both as a market and as a labor force” (WEF and OECD,
2011). In a region where “entrepreneurial activities and performance rates are well below
those of comparably developed regions” (OECD, 2012), there is a stated need to promote
entrepreneurship as a key solution to counter unemployment (Fisher, 2013), to divert the
workforce from bloated public sectors (Tanmia, 2013), and to contribute to diversifying the
national economies, highly dependent on oil exportation (The World Bank, 2007).
This pressure to create jobs for the national workforce through entrepreneurship is also
felt by the UAE government. In this country where the national population represents less
than 20 per cent of the total population (CIA, 2015), and where national unemployment was
 SEJ estimated at 14 per cent in 2009 (Tanmia, 2011), unemployment is still expected to grow,
13,4 with more than half of the Emirati population being under 24 (SCAD, 2013). The UAE needs
to empower its young and growing national human capital and to make it a highly skilled
and independent workforce, ready for an economy based on knowledge and entrepreneurial
attitude. This imperative is identified in the UAE’s national vision 2021, about “confident
and socially responsible Emiratis” (UAE Cabinet, 2010), and in Abu Dhabi Economic Vision
396 2030, which identifies the development of social and human resources as one of the four key
priority areas (The Government of Abu Dhabi, 2009).
Following the discovery of oil in the 1960s, a visionary socio-economic development
spurred by the UAE leadership irreversibly changed traditional Emirati households and
local communities’ dynamics, not only bringing new opportunities to their doors but also
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raising challenges regarding the way in which the changes brought about by development
in terms of local heritage and traditional social values and relations should be tackled.
Although now governed as a federal system, the emirates are built on traditional tribal
roots; tribal allegiance and political loyalties still predominate in the traditional societal
fabric (Heard-Bey, 2004). A ruling family is at the head of each emirate, and the seven rulers
form the Supreme Council of Rulers, which is the highest legislative authority in the UAE. In
practice, since 1971, the posts of president and prime minister have been held, respectively,
by the ruling Al Nahyan (Abu Dhabi) and Al Maktoum (Dubai) families.
The traditional social contract, based on a system where the ruler is available for his
subjects during majlis sessions to care for them in return for their loyalty and allegiance, has
been increasingly difficult to maintain, due to demographic pressures (Trident Press Ltd,
2006). Still, this traditional form of public sector has been informally maintained and has
evolved alongside an increasingly modernised and highly performing government (WEF,
2014), which redistributes its oil wealth through the delivery of one of the world’s most
generous social packages and services (Forstenlechner and Rutledge, 2010). There are still
strong expectations from the Emirati citizenry for their government to care for them in a
traditional patron–client relationship (Mansour, 2008). These expectations have evolved to
include free education and health care, subsidised utilities, free land, no-interest loans for
building homes and subsidised wedding costs (Brown, 2007). This social contract’s
endurance is also evidenced in the nationals’ employment preferences. According to
Forstenlechner and Rutledge (2010), “a job in the public sector is the key component of this
social contract”. The large majority of Emiratis is employed by local and federal government
entities or the armed forces; only seven per cent work in the private sector (Tanmia, 2011). A
natural transfer of the Emirati workforce to the private sector is expected and strongly
encouraged by the government to meet the needs of the increasingly knowledge-based
labour market (Tanmia, 2013). However, this is not occurring. Two main causes have been
identified: First, private sector opportunities are shunned by the local workforce. Among the
reasons invoked are differences in terms of number of working days per year (workers in the
private sector work 57 days more per year), wages (salaries are up to 65 per cent higher in
the public sector) and length of work days (which are longer in the private sector) (Tanmia,
2011; Issa, 2013). Second, there seems to be a gap between the education and training of the
young workforce and the requirements of the private sector regarding knowledge-based
specialisations (Al Attiyad, 2007; Al Ameri, 2014a), and the development of soft skills and
capacity building (Al Ameri, 2014b).
In their study of the GCC labour markets, Forstenlechner and Rutledge (2010) advise
governments to revisit and update their social contract. The deep restructuring of the
economy that they advocate highlights the high relevance of the concept of social enterprise,
 which is considered at policy level as a twofold remedy, able to both empower the national Social
population and contribute to create innovative employment solutions (Abdou et al., 2010). enterprise
Alongside such top-down effort, a mentality shift in the national population with regard
to expectations vis-à-vis the government is crucial for the necessary overhaul of the social
contract. In other words, reliance on the government on the part of citizens who expect to be
offered well-remunerated public sector jobs, to use expatriate labour without any form of
taxation, and to enjoy a range of generous social benefits and subsidies should give ground 397
to the right to be offered a more market-adapted education (Forstenlechner and Rutledge,
2010), to have opportunities to develop one’s own business (COAD, 2013) and to be active
agents of change in one’s community (UAE Cabinet, 2010). However, current available data
about the progression of such a grassroots shift in mind-set is very limited and tends to
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indicate that the concept of social enterprise has not yet been endorsed by the local
population (El-Sokari et al., 2013).

Islam: a fundament of the local society

Islam was superposed in the UAE onto the tribal fabric of the society; inter-tribe
differences were overcome by ways of a common, unifying religion (Heard-Bey, 2004).
In the GCC, Islam is ubiquitous in every aspect of Muslim individuals’ life and Muslim
countries’ public policies. The overarching role of Islam is adequately explained by
Al-Suwaidi (2015), who states that “Islam as a comprehensive system of beliefs,
concepts and human behaviour provides alternative political, ideological, and economic
frameworks”. The ubiquity of Islam in the “cultural, moral, social, economic, legal and
political spheres” (Heard-Bey, 2004) is undisputable within the Muslim environment,
but tends to be overlooked by attempts to apply Western development frameworks in
the Middle East (Al-Suwaidi, 2015). In their thesis about Islamic entrepreneurship in
Saudi Arabia, Kayed and Hassan (2011) pinpoint the lack of validity of established
Western frameworks to evaluate entrepreneurship in the Saudi context. Focusing on
the dimension of culture and the realisation that Western developed countries exhort
developing countries to alter their culture in the name of modernity, Kayed and Hassan
(2011) raise an important question:
Q1. Is there an alternative for countries that do not see in cultural transformation an
option?
To articulate the concept of social enterprise in a way that is appealing to the UAE domestic
socio-economic environment at both the micro and macro levels, a connection of the concept
to cultural and religious values – in addition to a connection to national visions – is
necessary. Islam and social enterprise are not contradictory. Indeed, Islam encourages a
business approach that follows an ethical line and has a social impact. In fact, Kayed and
Hassan (2011) insist that:
[. . .] the Islamic dimension imposes certain stipulations on the “opportunity”, the “process” and
the end goal of the entrepreneurial process; opportunity has to have a moral and ethical basis [. . .]
Moreover, the ultimate goal of the entrepreneurial activity, as is the case for all human activities,
must be intended to pleasing The Almighty Allah.
Therefore, social enterprises might present themselves as a contribution to the long-needed
answer to development imperatives, provided their agenda is understood and
communicated in respect of Islamic values.
 SEJ Philanthropy in the Arab world
13,4 Charity is one of the five pillars of Islam, and an important societal institution, namely, the
charity tax (zakah or zakat), compels every Muslim to give 2.5 per cent of his or her wealth to
the needy (Islamicity.com, 2014). A survey conducted in 2015, which studied the giving
behaviour of more than 1,000 Arabs living in the GCC, revealed that the act of giving was
overly spontaneous and occurred mainly during religious occasions (Touchline, 2015). The
398 act of charity is also strongly embedded in culture at the macro level. For instance, the UAE
has given US$0.7bn to the world’s refugees in the past five years; Pakistanis, Syrians and
Yemenis are the main beneficiaries of this financial support (Kannan, 2014). Traditionally,
the zakat proceedings are channelled to the poor or needy through acknowledged charities
or humanitarian agencies. Social enterprises combining a commercial structure and
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sustainable impact investment tools with a social mission meet resistance, as the process of
merging deeply ingrained charity with business practices raises incredulity at best, and
suspicion at worst. On the other hand, the traditional philanthropic sector is advised to
improve its governance by looking at good practice examples to be found in the private
sector (Jafar, 2015).

The apparent near-absence of civil society

The apparent near-absence of civil society and NGOs in the UAE may be accounted for
by the profoundly Western-oriented connotative elements associated with both terms – such
as the idea of independent grassroots movements, sometimes antagonising with public
authorities and secular values. Trying to delineate a civil society sector in the UAE with
these values in mind will lead to overlooking possible alternative and corresponding
dynamics. Krause (2008) warns against a “culturally-biased” way of defining civil society. If
civil society has to be investigated in a context far from the Western one, the set of
connotations attached to the construct should be changed (Krause, 2008). She suggests
taking a look at the on-going process of neoliberalist governmentality used by the UAE
Government to devolve its operations to semi-private or private institutions. Such process
also goes along with a gradual capacity-building of the citizens “who are thereby
increasingly empowered to discipline themselves” (Krause, 2008). In addition, the search for
civil society in the UAE context needs to consider the specific mosaic of communities from
various nationalities present in the UAE, and appreciate the interactive process occurring
between citizens and residents, and resulting in power negotiation, “interactions,
networking and other structures of participation” (Krause, 2008).

A shift in the meaning and use of corporate social responsibility

The UAE’s private sector has a long history of corporate philanthropy based on religious
and cultural traditions (Strategy&, 2013). But the agenda of corporate social responsibility
(CSR) activities in Middle East companies is currently shifting, steering away from
traditional charity initiatives to long-term traceable social projects. CSR is gaining
increasing attention as a potential vector for companies to become actors in sustainable
development and, by the same token, showcase improved governance and code of conduct.
As demonstrated by a handful of game changer companies in the UAE, such as the
Chalhoub Group or the Desert Group, CSR activities now involve different components, such
as internal and external capacity building, improved governance practices and leveraging
competences that exist within the company to contribute to a social and environmental
impact. According to the UN Global Compact (a strategic policy initiative that supports
companies to align their operations and strategies with ten principles in the areas of human
rights, labour, the environment and anticorruption), the number of signatories in the UAE
 increased from none in 2003 to 74 in November 2015, and to 119 in October 2017 (UN Global Social
Compact, 2015). enterprise
Social and environmental challenges
The following challenges are providing a fertile ground for social enterprises to develop,
addressing a context-specific social or environmental need.
A first challenge is linked to national socio-economic development imperatives: it is the
need to provide an education system adapted to the demands of a knowledge-based
399
economy (Al Attiyad, 2007; Al Ameri, 2014a) and to cater for students with special needs or
disabilities (Embassy of the United Arab Emirates, 2015).
The integration of women and vulnerable groups into the work market, as well as socio-
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economic development in opportunity-deprived and remote geographical areas, are also

high on the national agenda (COAD, 2013; Zawya, 2014).
There is also a stated will, on the part of public authorities, to focus on primary health
care issues, as the UAE population displays one of the world’s highest prevalence of lifestyle
diseases such as type 2 diabetes, hypertension and obesity, as well as a high prevalence of
genetic diseases.
Due to its growing population, the UAE is struggling with several interlinked
environmental challenges. Clean water depletion is the key environmental issue to be
addressed in the environmental sector (Zawya, 2014). With the highest consumption of
water per capita in the world, the Gulf Region could face a water crisis in the future if timely
measures are not implemented. In Dubai, 93.6 per cent of the water originates from installed
water desalinisation plants (Government of Dubai, 2015), but the process is highly energy
intensive and thus closely linked to energy supply, which comes second as environmental
issue, with a current level barely sufficient for the actual requirements. A third issue is
waste management, with the UAE being among the highest generators of waste worldwide.

Institutional trajectories: enablers and preventers

An imported concept promoted by public authorities and by the resident community
In the UAE, the term social enterprise has gradually gained ground in the English language
media since 2009[1], highlighting the added benefit of social value in economic development
and business investment (Jafar, 2013; Gutcher, 2013). This gradual dissemination of the
concept correlated chronologically with a broader awareness and mediatisation of National
Visions, such as the Abu Dhabi Economic Vision 2030 (The Government of Abu Dhabi,
2009) and the UAE Vision 2021 (UAE Cabinet, 2010) which integrate social development as
a chief component of economic development. It also coincided with stated socio-economic
development imperatives dealing with social inclusion. For example, the year 2013 was
officially earmarked “Year of Emiratisation” [2] by the UAE Cabinet (Zaman, 2012).
Both internal (organisation-driven) and external (environment-driven) motivations for an
organisation to be identified as a social enterprise (Grant and Dart, 2014a) are highly
relevant in the context of the UAE. These motivations can be seen as paradoxical in a
society that, until recently, was reluctant to mix traditionally distinct values – business
practices on the one side, and charity and philanthropy on the other side. But publicly
owned social outreach programs chose to define themselves as social enterprises, as the
concept is identified at public policy level as a tool to build the bridge between the
philanthropic sector and the private sector (Emirates Foundation, 2015). The imported
concept of social enterprise in the UAE is thus being stimulated by public authorities in their
quest for a solution meeting socio-economic development imperatives, but this dynamic is
unfortunately not reflected in the legal and regulatory options for social enterprises.
 SEJ Bottom-up organisations leading the way in bringing about social enterprise on the
13,4 socio-economic agenda are very few and expatriate-led. In Dubai, Consult and Coach for a
Cause (C3) was created at the end of 2012 with the aim to enable Middle Eastern emerging
social entrepreneurs to become active agents of positive social change, leveraging business
professionals’ skills and knowledge shared on a voluntary basis (C3, 2014). The vast
majority of C3’s volunteers are residents. Additionally, the expatriate-coordinated Impact
400 Hub in Dubai functions as an incubator for both commercial start-ups and nascent social
enterprises (Sahoo, 2013). Knowledge-sharing or cross-pollination activities between the
public sphere (top-down) and the private sector (bottom-up) initiatives to promote social
enterprise are currently limited to few events or awarding ceremonies, with flag persons
from both sides invited to speak about their expertise.
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The resident community is making up 80 per cent of the emirates’ overall population
(CIA, 2015), and the overwhelming majority of social entrepreneurs is expatriate. Each
nationality brings along its home-grown meaning of social enterprise, and their conception
of social enterprise might vary considerably. Expatriate social entrepreneurs are
establishing their social enterprise in the UAE, benefitting from the tax-free environment,
while having their activities/market/beneficiaries or all of the above in the UAE, in their
home country or in a selection of nearby countries. A limited but growing number of Emirati
nationals are joining the social entrepreneurs’ community (Nocentini, 2015), motivated to
address a specific social need in their community, through their expertice and business
acumen.

The legal and regulatory environment

The UAE federal legal and judiciary system is based on the Islamic Shari’a and Western
legal frameworks (Consulate General of the USA, 2005). Non-profit and commercial sectors
are traditionally segregated, with entirely separated legal and regulatory systems. This
leaves organisations identifying themselves as social enterprises the choice to register under
either a non-profit form or a for-profit one (Locke, 2015; Touchline, 2015). This split situation
is illustrated in Figure 1, with the representation of Alter’s hybrid spectrum, onto which the
dichotomised registration options for social enterprises in the UAE are superposed.
The vast majority of social enterprises are choosing the registration options offered to
traditional for-profit organisations, as the relatively high costs of starting up a business are
mitigated by very reasonable running costs, in a tax-free environment.
In 2017, the Emirates Foundation established a task group to draft a social enterprise law
for the UAE, whose agenda will be to establish a dedicated legal and regulatory framework
for organisations defined or defining themselves as social enterprises.

Social enterprise in the welfare triangle: a limited civil society engagement

The imported concept of social enterprise in the UAE is thus being stimulated by the public
authorities in quest of a solution to socio-economic development imperatives, but this
dynamic is unfortunately not reflected in the legal and regulatory options for social
enterprises. These profoundly impacting forces are illustrated in Figure 2, which uses the
welfare triangle as a framework on which the 12 surveyed social enterprises are distributed
(see the next section, about “Methodology and the typology’s highlights”). The dotted line
representing the boundary between formally registered and informal social enterprises has
been moved to the right, to better represent the rather linear axis between the public and
market spheres, away from the dimension of reciprocity, along which these 12 social
enterprises are distributed. This void in the reciprocity dimension reveals the limited
grassroots engagement from communities (civil society) in SEs’ institutional trajectories.
 Social
enterprise

401
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Figure 1.
Positioning the
dichotomised legal
registration options
for social enterprises
in the UAE on Alter’s
hybrid spectrum

Figure 2.
Mapping of the 12
social enterprises
interviewed,
according to their
type of ownership,
economic activities,
mission, governance
and legal status
 SEJ Methodology and the typology’s highlights
13,4 Establishing a first typology of social enterprise models in a country devoid of research in
the field, with an embryonic but promising social enterprise ecosystem, brought a few
implementation challenges. As previously discussed, there is a risk to miss out the diversity
of the concept’s meaning if the investigation is solely based on a functionalist fashion. By
the same token, the exercise of identifying and classifying social enterprises models using
402 standardised criteria or indicators might overlook new and innovative trends unfolding in
the UAE’s context. Keeping in mind these challenges, and given the void of existing
classification, an exploratory and intuitive approach was adopted in the methodology to
ascertain existing models and build a typology thereof.
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Methodological steps
The methodology applied can be described as a set of two logical steps:
Step one: establishing a preliminary typology. The social constructionist perspective was
followed as an underlying method complementary to a functionalist approach, offering links
between the explanation of the concept in context and the exercise of categorising social
enterprise models. The country-specific interlinked constructs identified and explored in the
previous section strongly influenced the choice of overall criteria to categorise social
enterprise models in this particular environment.
The researcher attended various conferences and summits including social enterprise as
a topic, and participated in discussions with prominent experts of social enterprise in the
region between 2013 and 2015. This approach was particularly useful to gain an
understanding of the institutional forces promoting the concept of social enterprise in the
UAE. The analysis drew on in-depth, open-ended interviews of 13 social enterprise experts
in 2014 (Johnsen, 2015) with questions inspired by elements from Alter’s (2006) social
enterprise typology, and by the ICSEM questionnaire, which is based on the EMES
approach’s three sets of indicators. The trends were also monitored through document
analysis, including a daily scan of English language newspapers for social enterprise-related
articles, the review of different government bodies’ documentation and laws regulating
commercial and philanthropic activities both on-shore and in free zones. Moreover, this
analysis provided the necessary knowledge about the legal and regulatory environment
within which social enterprises are shaped. A preliminary typology was then elaborated,
differentiating social enterprises according to their ownership structure – publicly owned or
privately owned.
Step two: strengthening and refining the preliminary typology with findings from the
ICSEM survey. Data from the survey were collected in the form of interviews conducted
using the ICSEM questionnaire. A panel of 19 organisations identifying themselves as social
enterprises was selected, either from the media or with the help of C3, Dubai Chamber of
Commerce and The Emirates Foundation, according to the pre-selected types of models.
Following the social constructionist perspective, the organisations’ motivation to be
identified as social enterprises was deemed more relevant than their functional attributes in
the selection process. Twelve organisations completed the questionnaire during the third
quarter of 2015. While the collected raw data from these 12 organisations was fed into the
ICSEM database to be included in the comparative study, it was also analysed in a table
using elements from Alter’s (2006) typology, and the EMES International Research
Network’s three sets of indicators. At this stage, it became clear that a sub-categorisation
would be necessary within the privately owned model, to render the diversity of emerging
social enterprises under this model. An effort was made to orientate the selection process
according to ICSEM’s guidelines to select three to four social enterprises per model. This
 analytic exercise allowed refining the preliminary typology, and also provided practical Social
examples of institutional trajectories. Table I displays how the 12 interviewed social enterprise
enterprises were categorised.

Salient features of the typology

A comprehensive overview of the typology’s different models is provided in the original 403
working paper[3] and will not be presented here in detail. Instead, salient elements of the
typology are summarised in the following paragraphs.
The young UAE-based social enterprise is characterised by a more organic and flexible
nature than its western counterpart regarding its mix of motives, its organisational
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structure, and its management model. Innovative ways of upholding the dual value creation
for social enterprises compelled to be licensed under a commercial legal framework or as a
NPIO are one of the typology’s highlights. With the exception of publicly owned social
enterprises, the profiled models present a satisfactory level of sustainability in their
financial strategies in their start-up phase. Overall, business activities are creatively
embedded in the social mission and present evidence of a continuous production; the
evidence of paid work and economic risk is highly model-dependent. The vast majority has
an explicit social aim, and a limited profit distribution, even when not explicitly stated. The
configurations within which social enterprises are owned and organised are found
extremely influential on the choices made by social enterprises in sustaining their dual value
creation, but more importantly, they seem to have a tremendous impact on the dimension of
governance, all models confounded. Governance seems to be a weak point: social enterprises
might display a high degree of autonomy, but very limited participatory practices involving
external stakeholders. The decision-making power is based on capital ownership.
As previously explained, the concept of social enterprise is being defined by two
main institutional forces, one acting as a promoter, and the other acting as a barrier.
The legal and regulatory restrictions, as well as the ownership and organisational
structure presented in the different models of the typology, lead to a number of
consequences:

Models Sub-models SE no.

Government initiated and owned NPO licensed as a business (establishment) AE10JS

NPO not licensed AE03JS
NPO registered as a trademark AE12JS
Privately owned or owned by the Part of an organisation, but independently functioning AE08JS
private sector, licensed as a business in the UAE as an NPO
Part of an organisation, but independently functioning AE11JS
in the UAE as an NPO
Part of an organisation’s CSR, in the process of AE07JS
spinning of as an NPO
Part of an organisation’s CSR, in the process of AE02JS
spinning of as a FPO
Table I.
Self-contained, FPO AE04JS
Self-contained, FPO AE06JS Methodological note
Self-contained, FPO AE09JS categorising the 12
Self-contained, NPO AE05JS interviewed social
Self-contained, NPO AE01JS enterprises
 SEJ
In their early start-up phase, social enterprises might choose to operate “under the
13,4 radar”.

When registering, regardless of their ownership structure, non-profit and for-profit
social enterprises alike tend to follow the commercial licensing route, either on-shore
or in a free zone, usually in the form of a LLC or an establishment, and manage to
uphold their mix of motives in a tax-free environment.
404
Such a registration choice seems to hamper the opportunities for a social enterprise
to develop and scale up: social entrepreneurs experience that prospective investors
and stakeholders are reluctant to invest in a social enterprise, due to its legal
identity not being consistent with its dual objectives. Social enterprise is often
mistaken for a form of charity that would drift from its primary aim, which is the
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social good, and would thus not appear trustworthy; alternatively, social enterprises
are seen as businesses whose focus shifts from profit to social impact, and thus
cannot reach the expected lucrativeness. Thus, investors are hesitant to lend money
to entities with a hybrid agenda not corresponding to their legal status, while
beneficiaries might be suspicious of the commercial side of the social enterprise.

Social enterprises registered under a commercial license should not use a
volunteering workforce, although the official legal documentation is unclear on this
point.

Being registered as a commercial organisation, owners are reluctant to share the
decision-making power with external stakeholders, as well as to implement
participatory governance principles, as they fear that the interests of their dual
value creation would not be protected in a regulatory manner.

The potential role to be played by social enterprises in addressing national
development imperatives cannot be officially identified or promoted, qualitative and
quantitative statistical data about social enterprises is not readily available, and
their impact is not recorded.

Concluding comments and further directions for research

Following the ICSEM Project’s objectives, the emerging concept of social enterprise was
analysed in the context of the UAE. For this purpose, a social constructionist perspective
was used as a theoretical grounding. Then, a detailed analysis of the constructs believed to
have an impact on the concept, including enabling and disabling institutional trajectories,
was provided. A brief overview of the two-step methodology followed to establish a
typology of models precedes a discussion about the salient elements that emerged when
establishing the typology. The social constructionist approach was found particularly
relevant in a peripheral context, where the social enterprise concept, as a novel, Western-
imported paradigm, is in constant negotiation with constructs and institutional trajectories
embedded within the prevalent belief system. Also, the social constructionist lens revealed
creative social enterprise models that might not have been identified under a traditional,
functional approach. Then, institutional trajectories promoting and hampering the concept
were described.
There are various potential directions for further research, in addition to the obvious
need to gather additional statistical data on social enterprises in the UAE and existing
models in place to complement the limited data obtained out of 12 social enterprises. These
directions are all connected to the need of investigating the legal and regulatory system in
relation to social enterprises in the UAE. First, before designating the legal status and
 regulatory system as the main culprits for the less than satisfactory score in governance, Social
more research is necessary to investigate whether this shortcoming is a real causal factor or enterprise
whether inherited elements, such as traditional paternalistic leadership styles from the
private sector and a lack of governance practices from the philanthropic sector, are also
negatively influencing the social enterprise ecosystem. Second, additional data are needed to
have a comprehensive overview of this highly dynamic ecosystem’s segregated
demographics, and to understand the external and internal motivations of Emirati social 405
entrepreneurs to be identified as such. Third, models such as social enterprises incubated
under a CSR program, or as a non-profit local office of an international organisation, were
included in the typology, although they are found in an embryonic state. These models could
be further explored, along with the cooperative legal form, which was not mentioned in the
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typology as no social enterprise following this model was identified. Cooperatives are firmly
established in the legal system and the economic landscape of the UAE. This already
existing legal form based on collective ownership has not yet been explored with an angle of
dual value creation in the UAE and could be useful for social enterprises operating with a
corresponding model.

Notes
1. A general Google search for “socialþentreprise UAE” results in 1,770,000 hits for 2015, 1,080,000
hits for 2014, 658,000 hits for 2013, 700,000 hits for 2012, 318,000 hits for 2011, 369,000 hits for
2010, and 274,000 hits for 2009.
2. “Emiratisation” refers to the national plan for social inclusion. It seeks to include citizens in the
country’s workforce in the private sector, as only 2% of the workforce in the private sector is
Emirati.
3. The integral version of the working paper is available online at www.iap-socent.be/sites/default/
files/UAE%20-%20Johnsen.pdf

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Corresponding author
Sarah Johnsen can be contacted at: sarahjohnsen123@gmail.com

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318-328. [Abstract] [Full Text] [PDF]
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