báo cáo thực tập giữa khóa the concept of social enterprise reality and solutions for the case of vietnam

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ACKNOWLEDGEMENT
Doing a thesis requires investment of time, rebounding from failure, selfmotivation, and of course to somehow financial resources. However, it is not a solo
act. There are many who have sacrificed much and have been an ongoing source of
inspiration and support. First and foremost, I would take this opportunity to express
my profound gratitude and deep regards to my guide Dr. Nguyen Hai Ninh for his
exemplary guidance, monitoring and constant encouragement throughout the course
of this thesis. To me, he is not only the advisor for this thesis but also a mentor who
has opened my mind set in many aspects of life through warm sharing and brain
storming moments.
I must also thank all the participants of my group, without their enthusiastic
and constructive contribution, my thesis could not be accomplished.
Last but not least, to my dearest family and friends, especially my mom, for
their incredible support throughout the difficult time. I have been most fortunate in
having the support from all of you and it has allowed me to reach my destination
and happy to have made the journey.
.
.


Table of Contents


LIST OF FIGURE
Figure 1.1
Figure 1.2
Figure 1.3

Typical hybrid of social enterprise
The difference between traditional enterprise and social enterprise
The ILM concept is about keeping the labor market “ active”

3


LIST OF ABBREVIATIONS
SEs
CSIP
SEA
OECD
CIEM
ILMCs
NGO

Social Enterprises
Center for Social Initiatives Promotion
Social Enterprise Alliance
Organization for Economic Co-operation and Development
Central Institute for Economic Management
Intermediate Labor Market Companies
Non-governmental organization

INTRODUCTION
The social enterprise phenomenon can trace its roots back to the eighteenth century
and the concept as such has evolved to become is a global phenomenon. Social
Enterprises (SEs) have been formed from social initiatives, based on a demand of

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solving a concrete social problem of the community and led by entrepreneurial

spirit of the founders. It is concerned with bringing about the social impacts and
social changes through innovative thinking.
The deep objective of social enterprise is to bring a more sustainable economy.
Unlike the usual traditional enterprise, it does not focus on profit maximization but
to use surplus as a means to solve social issues. Furthermore, it advances nonprofit
in the ability to financially self-sustain.
In the context of Vietnam, since Doi Moi, the most popular organization
form associated with social mission is Non- government organization (NGO)
funded from foreign NGOs and donation. These organizations have been
significantly contributing to the social and economic development of our nation.
However, recently, when the state of the world economy as well as our economy
struggle in difficulties due to the crisis, as well as restructuring trends, fiscal
tightening, reduce public debt and the environment increasingly polluted by
excessive economic activity, a new business model, has been conceived and
developed as a new trend in our country, namely: Social Enterprise. Inevitably,
social enterprise model which can bring profound social benefits and sustain
themselves by creative business models is a possible choice as a long term solutions
for our social welfare career.
Because of the necessity of Social Enterprise in building a sustainable
economy, I would like to suggest the topic of my thesis “The concept of social
enterprise: Reality and solutions for the case of Vietnam”

Thesis objectives: The purpose of the thesis is to clarify the fundamental
characteristics of social enterprise. The study will guide through the historical
context and concept of social enterprise phenomenon in Vietnam. In my thesis,

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there will be recommendations in order to improve the development of social

enterprises in Vietnam.
Research Questions
What is the concept of social enterprise?
− What is the biggest issue in the development of social enterprises in Vietnam
− What are recommendations for it?
−

Thesis methodology: In this study, both deductive and inductive research approach
are used, together with qualitative method, collection of data and comparison with
empirical research methods.
Thesis Structure:
Chapter 1: Literature review about the concept of Social Enterprise
Chapter 2: The research about the reality of Vietnamese social enterprises.
Chapter 3: Recommendation for the case of Vietnam

CHAPTER 1: LITERATURE REVIEW
1.1.

The evolution and development of Social Enterprises (SE)
Social Entrepreneurs and social enterprises have been in existence for

many centuries however, it was first appeared in the United Kingdom in the 17 th
century and have been the country where Social Enterprises most developed.
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According to MacDonald & Howarth’s research (2008), the first social enterprise
model appeared as a result of the plague (Black Death) epidemic in 1665. 1The
epidemic has left a disastrous consequence that many poor people became
unemployed. In this situation, Thomas Firmin established a manufactory using his

own money to supply materials for the operation and provided employments for
1700 people. At the time of establishment, Firmin clearly stated that he will not
pursuit optimization of profit but to transfer the profit to charitable funds.
Since then, models of cooperatives, social housing, micro finance, etc.
have been established and replicated in North America and East Europe as a result
of the Great Depression (1929-1933), social enterprise’s activities experienced some
decreases when the Keynes’s economic model become popular. But Social
Enterprises have not been internationally recognized and developed as a trend to
sustainably solve social problems until 1980, when Governments innovatively
shared and transferred part of social welfare delivery responsibility to the third
sector which is later being known as Social Enterprises in many countries.
In United States, the social enterprise became more prominent during
the late 1970s and 1980s in response to the economic downturn and major cutbacks
in government spending. Many charities at this time felt the need to increase their
revenue from sources other than grants and donations. Several of these charities
began to rely increasingly on commercial activities for revenue, greatly expanding
this type of American social enterprise. As a result, the portion of income these
charities received from commercial activity increased by 20% between 1982 and
2002.2
In Europe, social enterprise appeared popularly for the same reason as the
United States however, in the case of Europe, 40% 3of the European’s unemployed
were considered “long-term unemployed”. The downturn significantly cut
1 CSIP, British Council & CIEM 2012
2 These figures are based on a 2002 study of nonprofits with annual revenue of over $25,000.
Commercial activity, defined as income from special events, sales of goods, and dues and payments where
members received comparable benefits, grew as percentage of income for these groups from 48.1% in 1982
to 57.6% in 2002. Kerlin, supra note 11, at page 252
3 Tackling social exclusion in Europe: The contribution of the social economy (Roger Spear et al. eds., 2001)

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government budgets across the continent, reducing states’ ability to provide
unemployment assistance and job re-integration, further compounding the
unemployment problem. To solve these problems, several charities chose to focus
their efforts on battling structural unemployment.
Many charities started job-training and work-integration programs—
programs which often had commercial activities. From then, the understanding of
social enterprise in Europe was shaped and in turn guided the development of
social-enterprise policy across the continent.
1.2.

Different viewpoints on social enterprises concept

Social entrepreneurship has gained increasing popularity and attracted attention
during the recent years. The basic idea of social entrepreneurship is the combination
of a social mission with a business-like operation of the organization. However, the
specific meaning of social enterprise has not been officially defined yet. Depending
the point of view, vision, mission, and goal, the term ‘social enterprise’ is
increasingly recognized with some organizations describing themselves in this way.
According to Department of Trade and Industry (DTI) in 2002, the definition
currently is expressed: 4
“A social enterprise is a business with primarily social objectives
whose surpluses are principally reinvested for that purpose in the
business or in the community, rather than being driven by the need to
maximize profit for shareholders and owners”
This definition is very comprehensive, stick to the basic characteristics of social
enterprise.
First, doing business, should be understood as a model, a pro-active approach
and solutions that the organization has adopted in its operation rather than bind it

tightly to the form of a company such as : a joint stock company or a limited

4 Department of Trade and Industry, A Strategy for Success: Social Enterprise Explained, p13

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liability company….However, it also performs the economic function as a
commercial trade company.
Secondly, the social objectives are set out as a primary mission of SEs. It is the
most important goal in shaping the SEs. Social goals can be a hunger eradication,
poverty alleviation, environmental protection, protection of human rights…. Social
enterprise must be established to pursuit social goals.
Thirdly, profits are not for individuals but redistributed back to the organization,
society or community.
However, according to Social Enterprise Alliance (SEA) 5, the champion for social
enterprise in the United States
“Social enterprises are businesses whose primary purpose is the common
good. They use the methods and disciplines of business and the power of the
marketplace to advance their social, environmental and human justice
agendas.”
Three characteristics distinguish a social enterprise from other types of businesses,
nonprofits and government agencies:
 It directly addresses an intractable social need and serves the common good, either

through its products and services or through the number of disadvantaged people it
employs.
 Its commercial activity is a strong revenue driver, whether a significant earned
income stream within a nonprofit’s mixed revenue portfolio, or a for profit
enterprise.

 The common good is its primary purpose, literally “baked into” the organization’s
DNA, and trumping all others.

5Se-alliance.org (2014), What is Social Enterprise, Available at: [Accessed 14 Jul. 2014].

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The Organization for Economic Cooperation and Development (OECD) 6
definition of social enterprise is:
“Social enterprises are organizations that take different legal forms across
OECD countries to pursue both social and economic goals with an
entrepreneurial spirit. Social enterprises typically engage in delivery of
social services and work integration services for disadvantaged groups and
communities, whether in urban or rural area. In addition, social enterprises
are also emerging in the provision of community services, including in the
educational, cultural and environmental fields”.
Social Enterprise London: summarize the term “social enterprise” in 3
characteristics: enterprise orientation; social goals; social ownership.
 Enterprise orientation: They are directly involved in producing goods or providing

services to a market. They seek to be viable trading organizations, with an operating
surplus.
 Social Aims: They have explicit social aims such as job creation, training or the
provision of local services. They have ethical values including a commitment to
local capacity building, and they are accountable to their members and the wider
community for their social environmental and economic impact.
 Social ownership: They are autonomous organizations with governance and
ownership structures based on participation by stakeholder groups (users or clients,
local community groups etc.) or by trustees. Profits are distributed as profit sharing

to stakeholders or used for the benefit of the community.
In Australia, the Australian Department of Education, Employment and Workplace
Relations define social enterprises:
“A social enterprise is an organization or venture that achieves its
primary social or environmental mission using business methods. The
social needs addressed by social enterprises and the business models
6 www.oecd.org/gov/budgeting/47814764.pdf

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they use are as diverse as human ingenuity. Social enterprises build a
more just, sustainable world by applying market-based strategies to
today’s social problems.”
In Vietnam, according to the Center for Social Initiatives Promotion (CSIP) social
enterprises are defined as:
“a concept that refers to the work of social entrepreneurs under
different legal entities depending on specific purposes and operation
conditions. Social enterprises directly target to social benefits, and
are led by a strong entrepreneurial spirit to achieve both social
benefits as well as economic returns”
Generally speaking, Social enterprise is an organization pursuing social goals or
other objectives, activities to create benefits for the community without distinction
of ownership or legal form with the diversity of the level of financial autonomy,
innovation and social change.
1.3.

Social enterprise characteristics

As mentioned above, there is no universal definition of social enterprise however

they all have the some basic characteristics as following:
1.3.1

Social enterprise is a business model

Like other traditional enterprises, SE is a business. Business operation is a
unique characteristics as well as strength of social enterprises in comparison with
NGOs, non-profit organizations, charities that simply receive grant and fund for the
social programs. The entrepreneur must generate the majority (more than 50%) of
their income through trade. More accurately, social enterprises have to provide
goods, products and services with good quality and at competitive prices to the
market. However, unlike the Charity funds who may call for charitable
contributions or purchase the products from that organization to raise fund, SEs
have to compete fairly with and equally with traditional businesses in the same
field. This is a challenge of social enterprises, and that explains why social
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enterprises always tight closely to social initiatives, because their business solutions
must be 'social innovation’ so it can bring about social objectives using business
approach. Therefore, with social goals and wise strategy, SE can gain profitability
as well as sustainability for development.
Figure 1.1: Typical hybrid of social enterprise

Business Activity

Social objectives

Social enterprise

Source: CIEM
1.3.2

Have a clear social mission

The social enterprise community agrees that the primary aim of all social
enterprises must be a social or environmental one. In another word, the social
objectives must be put as the core mission. Because the priority objective of SEs is
aim at the society, the business strategy is different from traditional business. The
difference is that traditional enterprises meeting customer needs or finding social
solutions to maximize profit for enterprise owners. In contrast, social enterprises
use business model as a tool to achieve their social objectives. In summary, social
objectives are considered to be the most basic, the first and foremost and the
guideline for business activities of SEs.
Figure 1.2: The difference between traditional enterprise and social enterprise

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Traditional
enterprise

Social enterprise

identify market

design products

identify social

design business

issues

plan

gain profit

solve social issues

Source: CSIP, British Council & CIEM 2012
1.3.3

Reinvest the majority of their profits

What a social enterprise does with its profits is a critical way in which social
enterprise is distinct from standard businesses. The basic principle of SEs is use the
profit or surplus to redistribute back to the activities of the organization or the
community, not to distribute profit to individuals. The way of distribution of profits
of each business is different, depending on the set-out social objectives. There are
some popular social entrepreneurs to reinvest their profits for social purposes:
 Recruit workers who often do not attract other employers: disabled,
 Operate in places which are less attractive other investors:
 Investing in area which has low profit
1.3.4 Social ownership

Social enterprises are autonomous organizations that are independent of the state.
Social enterprises are voluntarily created by a group of people who share certain
needs and aims. Therefore, they execute a democratic decision making process. The
decision-making does not rely on the percentage of capital control. People and labor

have primacy over capital in the distribution of
1.3.5

Undertake different legal forms

A social enterprise can exist in various forms of business as follow:
 An independent company with social objectives: It may be a private company or a

joint stock company…

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 A charitable organization, which is responsible for providing goods and services.

However, this organization does not depend entirely on funding or charitable
contribution.
 A commercial branch of a charity.
 A mutual fund which is owned by the members or customers.
1.4. Types of Social Enterprise

According to Social Enterprise London, SEs can be divided into 7 types as below:
1.4.1

Co-operatives: “are associations of persons united to meet common economic and
social needs through jointly owned enterprises”. They voluntarily cooperate for
their mutual social, economic, and cultural benefit by contributing their money and
effort and establish “Co– operatives” (Co-op). In that Co-operative, they provide
goods and services to members and under certain conditions, to the community at
large over market activities. Surplus is partially distributed to members, it can also

serve as a reserve fund to improve the offered services or the further develop the
organization.
A cooperative is a type of enterprise, which has legal entity owned and
democratically controlled by its members, autonomy, and is responsible for the
financial obligations within the scope of the chartered capital, capital accumulation

1.4.2

and other sources of cooperatives prescribed by law.
Employee-owned businesses: is “ a form of co-operative, create or preserve jobs
that help to keep businesses running and protect profits from being lost to remote
shareholders”. Simply understand, it is owned and controlled by people who work
for it. This type of social enterprise can potentially develop and flourish in the
knowledge economy, where employee participation is the key to tapping into
workers’ know- how and to building loyalty. Employee-owned businesses can
benefit from the following characteristics:

 Organizational efficiency –employee ownership increases productivity particularly

when combined with participation. Studies of employee ownership show that these
firms are more productive, more profitable and grow faster than other firms.
 Personal development –studies show that workers in employee-owned firms have
higher job satisfaction; ownership enhances personal dignity, contributes to
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motivation and identification, and supports personal growth. Employees also
receive a financial reward through profit sharing.
 Social value –employee ownership has been an effective tool both for job creation
and for job retention through the buyout and rescue of firms. As such, employee

1.4.3

ownership contributes to a community’s economic development.
Social Firms: are “small businesses created to provide integrated employment and

training to people with disabilities and disadvantages in the labor market”
A Social Firm' is an enterprise that must has these following conditions
 At least 50% of the firm’s turnover is earned through sales of goods and/or services
 Their specific social purpose is to create sustainable paid employment for either
disabled or severely disadvantaged with a suitable job and vacancy.
 More than 25% of employees are disabled people (Please note that used here
‘disabled’ includes those who are disadvantaged by mental health problems).
 These are businesses that use their market-orientated production of goods or
services to achieve their social mission, with profits going back into the company to
further its goals.
 A significant number of the employees of social firms will be people with a

disability or disadvantage, including psychiatric disabilities.
 All disabled and disadvantaged employees are paid a market-rate wage or salary
that is appropriate to the work.
 All employees should have the same employment opportunities, rights and

obligations.

Development Trusts: are key actors in community-based regeneration.
Development trusts are community organizations which:7
 Are owned and managed by local community, in another word it is a community
1.4.4

based.

 Operate with the aim to achieve sustainable regeneration of community from

economic, social, environmental and cultural issues to training, property
development and management.
 Are independent but seek to work in partnership with other private, public and third

sector organizations.
7 Dtascot.org.uk (2014), What is a Development Trust? | DTAS | Development Trusts Association Scotland.
[online] Available at: [Accessed 18 Jul.
2014].

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 Are self-sufficient or aiming for self-sufficiency, and not for private profit.
 All profit is generated through enterprise and the ownership of asset, and
1.4.5

surplus are principally reinvested in the organization or the community.
Intermediate Labor Market Companies: provide training and work experience
for the long-term unemployed. ILMC targets to the group of most disadvantaged
jobless people, offers employment for participants with fixed term jobs (up to 12
months), with close supervision, guidance and support, and enabling participants to
earn a wage rather than government income support. ILMCs provide participants
with fixed term jobs (typically 12 months). ILMCs provide place-based responses in
regard to recruitment of employees and operation of business activities, with strong
involvement by local government and non-government organizations.
Figure 1.3: The ILM concept is about keeping the labor market “active”

Source: Bob Marshall and Richard Macfarlane, The Intermediate Labor Market: A tool

for tackling long-term unemployment
1.4.6

Social and Ethical businesses: are organizations, which use trade to raise money
for specific commitments and are set up by charities or non-governmental
organizations, or simply ethically minded individuals. In the past, social and ethical
businesses have tended to be set up and owned by a charity or NGO as a way of
raising money to supplement grants and donations. However, in recent years a
growing number of them have been set up by individuals or groups of social
entrepreneurs whose personal ethics have led them to use their business expertise to
do something positive for their community or society in general.

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1.4.7

Community businesses: can be under any of the above but with a particularly
strong geographical definition and focus on local markets or services.
A community business must have the following basic features:8
 Operate with a specific aim in a certain geographical area.
 Are owned, managed and controlled by local community to develop this area
 Aim to provide goods or services to benefit local communities in accordance
with the objectives.
1.5. The benefits of social enterprises
Social enterprises tend to operate with a purpose of creating value for the society
and also generate income (if not wealth).We cannot deny the positive impact of SEs
on the society, not only in the social aspect but also the economy, and public service
as well.
1.5.1

Social impact

The unique difference between SE and the traditional business is the social missions
that it pursuits. The social mission can be varied from the environmental purpose to
social problems like human trafficking, illiteracy, poverty…The profits from trading
are reinvested for social purpose to improve the people’s life, especially people in
the Bottom of Pyramid Group. They are the poorest and most disadvantaged people,
making up 2 billion with income of less than 2 USD/day. Social enterprise has the
ability to stay sustainable while providing low products’ price, therefore, is able to
tap on their needs. Furthermore, social enterprises contribute to the improvement of
socially and/or locally restricted markets, i.e. they offer mainly goods and services
which otherwise would not be available either because of a lack of profitability for
private enterprises or because of restricted financial capacities within the public
sector.
1.5.2

Economic impact

Social enterprise is a business model driven by social mission. Like others
traditional businesses, it also generates incomes through trading goods and services,
8 Distinguishing between types of social enterprises
( />
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which is used to fulfill the social purpose. The social enterprise can not only create
more jobs, which in return boost the economy in the local , but also ensure the
delivery of sustainable supply chains and create the “better” society. Actually, social
enterprises play a key role in restructuring local economies.

1.5.3

Public services

Social enterprises are seen as a source of innovation in the delivery of public
services and as creators of new service opportunities… Since they deliver products
at a lower price compared to other companies. They still manage the same cost. This
has pushed social enterprises to innovate, to be more sustainable creative in the
operation. Social enterprises usually are the pioneers in finding new approaches,
designing new services and models (Carbinetoffice 2006).
1.6. Typical and famous examples of
1.6.1
Grameen Bank – Bangladesh

SEs

A typical model of social enterprise in Bangladesh is Grameen Bank- Bank
for the poor. The origin of Grameen Bank can be traced back to 1976 when
Professor Muhammad Yunus, Head of the Rural Economics Program at the
University of Chittagong, launched an action research project in Jobra village to
examine the possibility of designing a credit delivery system to provide banking
services targeted at the rural poor. In 1976, he decided to make a small loan of
US$27 to a group of 42 families as start-up money so that they could make items
for sale, without the burdens of high interest under predatory lending. Yunus
believed that making such loans available to a larger population could stimulate
businesses and reduce the widespread rural poverty in Bangladesh.
He continued to develop the principles of the Grameen Bank from his
research and experience and began to expand microcredit as a research project
together with the Rural Economics Project at Bangladesh's University of Chittagong
to test his method for providing credit and banking services to the rural poor. In

1976, the village of Jobra and other villages near the University of Chittagong
became the first areas eligible for service from Grameen Bank. With support from
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the central Bangladesh Bank, the Bank project was extended in 1979 to the Tangail
District. The bank's success continued and its services were extended to other
districts of Bangladesh. In 1983, Grameen Bank was officially established as an
independent bank and started expanding operations across the country.
Mechanism:

The mission of the Grameen Bank is to offer the rural poor

opportunities to access credit. The Grameen Bank Project came into operation with
the following social objectives:
extend banking facilities to poor men and women;
eliminate the exploitation of the poor by money lenders;
− create opportunities for self-employment for the vast multitude of unemployed
−
−

−

people in rural Bangladesh;
bring the disadvantaged, mostly the women from the poorest households, within the
fold of an organizational format which they can understand and manage by

−

themselves; and

reverse the age-old vicious circle of "low income, low saving & low investment",
into virtuous circle of "low income, injection of credit, investment, more income,
more savings, more investment, more income". 9
The bank does this primarily through offering microcredit loans. Individuals
are eligible for a loan if they are from a household that “owns less than .5 acre of
cultivated land”. In Grameen system, the bank goes to the poor and provides loan
without any collateral. It is a trust-based banking, which not require any credit
history or business experience for providing loans. Its credit delivery and recovery
mechanism is very client friendly and flexible. Repayment is made in weekly
installments. It promotes social capital. The entire Grameen system is built on peer
support with the framework of a five- member group and the broader framework of
a center. It develops leadership quality among its members through annual election
of group and center leaders, electing board members as the institute is owned by the
borrowers. Grameen has always taken into consideration the potential and capacity
9 Grameen-info.org, (2014), Grameen Bank | Bank for the poor - A Short History of Grameen Bank.
Available at: />[Accessed 25Jul. 2014].

19


of its borrowers, their affordability and viability. It has developed loan products and
terms according to their needs. One can borrow more and more as one grows in
confidence, skills, and fulfills Grameen requirements.
Profit could be got from the interest rate and be rotated for loans. The interest
rate Grameen Bank charges for its loans is lower than the rate of interest the
government of Bangladesh has fixed for government run microcredit programs. The
interest rate for government program is 11percent flat. It is only 10 percent flat for
Grameen basic loans. In addition to microcredit loans, the Grameen Bank also
provides other financial services, expanded its loan services to include such tools as
housing loans and family loans. Finally, Grameen also organizes a number of

community-building workshops, a practice that began in 1980. The bank conducts
almost “3,000 workshops each year, some one-day affairs, some lasting a full week,
focusing on health care, nutrition, family planning, child care, and business
opportunities” (Bornstein 96).
1.6.2

The Big Issue- a hand up and not a hand out

The Big Issue is a street newspaper published in four continents, which was
founded by John Bird and Gordon Roddick in September 1991.It is written by
professional journalists and sold by homeless individuals. The Big Issue has been
the leader in the ‘street paper’ movement, demonstrating both the sustainability of a
pioneering social enterprise model, as well as a long term commitment to
addressing the challenge of homelessness worldwide. Founded in 1991, the
organization is guided by the mission of helping thousands of individuals to regain
control of their lives and simultaneously altering public perceptions of the
homeless. Currently The Big Issue has worked with around 2000 individuals across
the UK offering them the opportunity to earn a legitimate income; to ‘help them to
help themselves’10.
 Mechanism: The Big Issue consists of two parts – Big Issue Limited Company (Big

Issue Ltd) that produces and distributes The Big Issue magazine to a network of
10 Big Issue, (2014). About Us. Available at: 28July. 2014].

20


street vendors, and The Big Issue Foundation - a non-profit foundation, which exists
to help those vendors gain control of their lives by addressing the issues that have
contributed to their homelessness. The Big Issue Foundation offers counseling

services and references in the areas housing, health, financial independence and
(career) expectations.
To help the vendors, The Big Issue allowed them to buy the weekly
magazines for 1 GBP and sell it at a price of 2 GBP to the customers on the streets.
Each (certified) new vendor receives short instructions for the sale of the magazine
and 5 free copies (in London 10). Copies which are not sold cannot be returned and
no money is refunded. Any further turnover of the magazine, for example from
advertisements, is realized directly by the Big Issue Foundation
Nowadays, The Big Issue has also had to manage the expansion made
possible by its success. It has implemented an international license franchise which
has seen the paper launched in Australia, Japan and South Africa, Korea, Malawi,
Namibia…With the purpose of the initiative is to empower homeless people and
rough sleepers through financial inclusion and self-help, The Big Issue has helped
thousands of homeless and be recognized as one of the world’s most successful
social business models.
1.6.3

KOTO- Know one teach one

KOTO is a famous social enterprise in Vietnam, which operates as a
restaurant business and vocational training center with a mission to change the lives
of disadvantaged children in Vietnam. It was established in 1999 Jimmy Pham, a
Vietnamese-Australian. The concept of KOTO began when Jimmy asked some of
these young people what they wanted out of life. They simply replied, ‘We need
skills so we can find stable jobs’. He then decided that he wanted to come back to
Vietnam on a long-term basis and make a difference. In 1998, Jimmy Pham set up
Street Voices, a not for profit association registered Australia. The aim was to
support The Project through fund raising, raising the profile and the need to assist
Vietnamese street and disadvantaged youth.
21

In 2007 Street Voices Incorporated was renamed KOTO International
Limited a not for profit company Limited by Guarantee. KOTO has developed as a
training center, which supports vocational training for street and disadvantaged
children.
 Mechanism: KOTO means “Know one, Teach one”- learning should be passed on;

knowledge is there to be shared. It is a model of social enterprise with the mission
to giving disadvantaged youth the possibility to learn and strive in their lives.
Trainees have poor communication skills, low self-esteem, little hope for healthy &
productive future. KOTO provides the trainees with hospitality industry training,
self-belief and enthusiasm to take their rightful place in their community and
contribute to their world.
Trainees at KOTO are from the poor families, whose parents addicted to
drug, drinking or gambling or other evils, orphans, abused workers or abandoned
children…and aged from 16 to 22 years. In 24 months, students will learn the skills
to serve in hospitality, business English and other life skills. In addition, they are
also provided with periodical health examination, immunization, uniforms,
residential arrangement, health services and training allowance monthly at the
training restaurant. After graduation, they are highly valued hospitality industry in
Vietnam and internationally. With trainees after two years training, they will be
granted with an official certificate from Box Hill, Australia. This is a credible
certificate for restaurant and hospitality business and fully recognized all over the
world including five stars hotels.
Functioning as a social enterprise, KOTO seeks to solve social problems
directly and sustainably. Koto is developing in the direction of replicating its model
to other localities in Vietnam and overseas; at the same time, Koto encourage the
generation of F2, F3, graduates of Koto training program to replicate Koto model
( typically Pots & Pans restaurant was opened in Hanoi by a former student of

Koto). It approaches social issues with fundamental solutions and sustainability
therefore it has obtained better and deeper impacts.

22


KOTO restaurant is a part of KOTO project, which works as a business
aspect to support for vocational training centers. Currently, more than half the
Center’s operating costs is funded from the profits of the restaurant. All profits from
the restaurant are put back into the Project.
So far, the model is based on meeting the basic human needs of a person
such as belonging, a nurturing environment, physical wellbeing, order and meaning;
as well as opportunities to develop self -esteem, empowered with new skills, and
give-back to your community. Up to now, KOTO has trained more than 20 courses
(2 courses enrolment each year) with the number of graduates up to nearly 350
children.
In general, social enterprises in the world and in Vietnam in particular have
achieved significant impact in society and considerable economic return. Based on
the analysis of 3 typical examples of social enterprise, we can clearly see that the
social enterprises are hybrid organizations, undertaking business activities to
achieve social objectives. They operate not for profit but for the society, especially,
working to meet the needs of Bottom of Pyramid Group. In fact, social enterprises
are factors that promote innovation and initiatives for the society. They go into the
niche market which no one has entered or even create new market, or meet the
needs of a neglected group, or address the social and environment issues to the
economy of the country, to attain the sustainable development. Although there will
be a lot of difficulties and obstacles to overcomes, we cannot deny the role of social
organizations, community development in general and particularly the emergence of
a lot of social enterprises.

23


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