Analyzing external environment factors affecting social enterprise development

The purpose of this paper is to analyze how factors in the external environment affect social enterprise (SE) development in Canada. With the decline in government funding for non-profit organizations, SE development is gaining greater traction. SEs are businesses and can be analyzed with methods similar to those for traditional businesses. Just as the external environment is important for assessing the success of businesses, in this study, the authors examine the external environment related to SEs.

In this statistical analysis, the authors compared 62 factors across 33 census metropolitan areas (CMAs) in Canada while treating SE revenue as the dependent variable. Links between the dependent variable and the external environment were analyzed through correlation and regression tests. Publicly available revenue figures for non-profit SEs by CMAs were compared with a selection of external environment factors, including demographic information and health indicators, also organized by CMA, as published by Statistics Canada.

The analysis demonstrated that three of the factors displayed significant positive correlation and one resulted in a predictive value. Positive correlations were discovered between SE revenue per capita and three of the variables: university education, perceived health, very good or excellent and no religious affiliation. Only university education was found to have predictive value.

This study is the first to compare SE revenue and the external environment across Canada’s CMAs. The results show that factors in the external environment create conditions more conducive to SE development.