Incubator Blogs: Timo Rantanen: Social enterprises should be seen as equal with regular companies

The TREMOR Mentor has a long history in the corporate social responsibility sector. He argues that social enterprises have long faced stigma as just a bunch of hobbyist projects, but they should be seen equals with regular businesses, and have the possibility for real impact in the social & health service world.

Hello, and welcome to another addition of our series of blog posts introducing the mentors behind our incubator programmes. This post was made to promote the first edition of our social impatct incubator programme, TREMOR. In today's post, we're speaking with Timo Rantanen.

Timo Rantanen, Senior Advisor at Rauta Sustainability Services and pioneer in sustainability communications, has been working on corporate sustainability issues like sustainability strategy, reporting, and marketing communications for over twenty years. Normally, Timo works with large companies, but he has been pleased to see that the SME sector is also becoming more active in the sustainability sector.

We met Timo, who is stepping into the role of mentor for the social impact incubator programme TREMOR and asked him which social challenge he would like to tackle right now.

Social Entrepreneurship and Responsibility

Social entrepreneurship and responsibility are two parallel paths. Corporate responsibility means a corporation doing good on its own term, with profit as its top priority. Social enterprises, on the other hand, should create value for their own communities rather than focus on profit. The key difference between the two is the initial attitude towards regarding the purpose of the enterprise.

"Responsibility is the future of business: a licence to operate and exist. The size of the company does not determine its relationship to being responsible,” Rantanen explains.

There are differences between a normal company and a social enterprise. At its core, “normal” companies, as opposed to social enterprises, are seen as fundamentally functional businesses, which means that the funding and support instruments available to them are different to those available to social enterprises. This difference in perception should be eliminated. Creating good for society should be a concept that’s far more broadly recognised and used, and we should be looking at how to bring “normal” companies and social enterprises closer to one another, not come up with further ways of separating them:

"The biggest support we can give to social enterprises right now is promoting the understanding that these are not just hobbies, but important societal creations."

Broadening the definition of a social enterprise

Social enterprises in Finland are mainly in the social & health service sector, and it would be useful to broaden the understanding of what a social enterprise is. In the social & health service sector, the legislation and monitoring are very strict, narrowing the role that social enterprises can have in society.

"Finland is a small northern country, and it requires a lot of resources. Enterprises are a key part of society, and they provide resources to society through business operations."

As a small nation, Finland needs all the resources it can get to properly run its society. Businesses are a natural part of this resource pool. As crises arise in the world, their role becomes increasingly important, with internal cohesion, the sense of shared responsibility for pulling together, becomes central in society. Businesses and society co-operating seamlessly is a good example of this.

"It’s with high growth business activities that we can influence how attractive social enterprises appear in the investment market. The stigma against social entrepreneurs as being just a bunch of hobbyists is negatively impacting their opportunities for investment. Social entrepreneurship needs to be put in a position where it can genuinely be competitive in the financial markets.”

A new way of thinking in the social & health services sectors

The social issue Timo would like to tackle is the lack of dynamism in the social & health services sectors in Finland with the help of entrepreneurship:

“The current social & health service systems are one big administrative entity with heavy structures. Entrepreneurship in this sector usually includes lean-thinking, which explicitly avoids these kinds of heavy structures while also considering the importance of operations from the points of view of both the customer and the employee. We should be considering how resources are allocated in healthcare provided by both companies and the state, and that we do so with the patients in mind. This way, we could ensure that services are as accessible as possible, while remaining of a high quality and keeping the care staff in mind in the service chain. This way we could avoid cumbersome structures and have more time for actual patient care.”

Timo wants to encourage applicants to the incubator programme to come up with bold solutions that are different from traditional social entrepreneurship:

“I would be really happy if we could introduce social thinking in a variety of business sectors and find new models for social impact by breaking new ground. I look forward to seeing how the teams involved in the programme will see, ideate and solve the challenges they identify with the aim of delivering good for society, individuals, businesses, and workers!“