Building the Ecosystem for Social Entrepreneurship: University Social Enterprise Cases in Singapore

Abstract

There has been limited study on the role of the startup ecosystem in social entrepreneurship. This article addresses the gap by applying a theoretical framework of startup ecosystem to two social enterprises originating from a Singapore university, examining how they engage with stakeholders to create social impact. WateRoam Pte Ltd is a water innovation startup that deploys cost-effective water filtration solutions to rural communities and disaster-hit locations. Tware is a wearable technology startup with a range of therapeutic products for individuals with autism, stress or anxiety. The two cases provide insights on the ecosystem for social ventures in Singapore. The Finance domain is identified as a potential area of improvement, as there is uncertainty on the appropriate growth trajectory for funding. University incubation and mentor networks are found to be pivotal in extending the Markets domain. Finally, this study highlights the Supports domain in the form of university R&D facilities and accelerator programmes that have been instrumental in strengthening connections. Extending beyond the university context, it is evident that infrastructural resources in the ecosystem are crucial. Policymakers may draw on the experience of countries, like Israel, which have successfully built such support facilities to nurture innovation-based social enterprises.

Keywords

social entrepreneurship startup ecosystem innovation wearable technology social exclusion

Introduction

Since the award of Nobel Peace Prize in 2006 to social entrepreneur Professor Muhammad Yunus for his pioneering work in microfinance to the poor in Bangladesh, the concept of social entrepreneurship has gained tremendous momentum worldwide. Social entrepreneurship is commonly defined as undertaking entrepreneurial activity to achieve social purpose. Some social ventures emerged in developing countries to address basic human needs. Other social enterprises originated in developed economies to enable inclusive growth.

Socio-environmental problems, such as poverty, environmental degradation or marginalisation, have neither been solved effectively by the government nor addressed satisfactorily by profit-driven enterprises. Traditionally, non-profit or non-governmental organisations (NGOs), voluntary organisations or the social sector attempt to advocate for improvement in the socio-environmental conditions. While some economies may have welfare systems that work collectively with the social sector to address the socio-environmental issues, other countries that operate as free-market economies leave much of the issue resolution to the social sector (Trivedi, 2010).

Although the operation of the social sector varies from country to country, it is evident that the social sector has expanded significantly in the past decade. According to the results of the Global Entrepreneurship Monitor (GEM) study in 2015, as many as one in ten individuals in the USA and Australia are social entrepreneurs, defined as entrepreneurial individuals focusing on social, environmental or community goals (Bosma, Schott, Terjesen, & Kew, 2016). Other countries, such as Ireland, Israel and Luxembourg, saw similarly high rates of social entrepreneurship. The GEM report also hinted a growing conversion rate of social enterprises from the startup phase to operational phase in Australia, the USA and Western Europe, signalling the possibility of increasing institutional support in these regions.

In the literature of social entrepreneurship, two overlapping strands have been identified. One pertains to the development of positive social change through re-organising resources, reflecting the noteworthy research of Dees (1998). The other strand refers to the notion of ‘earned income’ to achieve social outcomes by building organisational capability to become commercially viable and socially meaningful (Boschee, 2001). While it is generally accepted that social entrepreneurs face challenges like any other entrepreneurs, some scholars argued that certain key challenges are distinct to social entrepreneurship: managing accountability, managing twin bottom line and managing identity (Tracey & Phillips, 2007). With the growing importance of higher education in equipping budding entrepreneurs with new venture creation skills through entrepreneurship and management programmes, a stream of the literature has also focused on how academic institutions can spur social entrepreneurship through mechanisms such as technology commercialisation and startup programmes or incubation schemes. However, it is evident that for social enterprises to be successful, the academic institution is only one of the supporting agencies in the ecosystem. There are many other stakeholders and domains that social entrepreneurs are expected to interact with to enhance their chances of survival.

Although the concept of social entrepreneurship has been popularised for more than a decade, relatively little attention has been paid to understand the role startup ecosystem has played on social entrepreneurship. It is not clear how social entrepreneurs interact with various public and private institutions as well as the target beneficiaries to identify and evaluate opportunities, conceptualise their business models to find good product-market fit, create and grow their social ventures. The study of entrepreneurship, on the other hand, is relatively well established, with its origin traced back to Schumpeter (1934), who posited entrepreneurs as individuals who created businesses by bringing innovations to market. Building on his work, researchers in the entrepreneurship literature subsequently identified success factors of entrepreneurial firms to include entrepreneurial capabilities such as creativity (Drucker, 1984), alertness to opportunity (Baron & Ensley, 2006) and the firms’ abilities to access a wide variety of resources such as human and financial capital (Mosakowski, 1998), processes to identify opportunities (Ardichvili, Cardozo, & Ray, 2003), plan actions and set goals (Gruber, 2007) and leverage social networks (Greve & Salaff, 2003). Beyond the firm’s level of analysis, other streams of entrepreneurship research focus on the relationship between an entrepreneurial firm’s characteristics and the ecosystem it operates in (Isenberg, 2010) and academic entrepreneurship (Cheah, 2016).

Some scholars argued that the topic of social entrepreneurship was unique as it transcended the various domains of entrepreneurial studies, non-profit management and social movements (Mair & Marti, 2006). Other researchers, however, contended that social entrepreneurship was not distinct from entrepreneurship and recommended that future enquiry on social entrepreneurship could benefit from the existing theories of entrepreneurship studies (Dacin, Dacin, & Matear, 2010).

To address the gaps in the current literature of social entrepreneurship, we will draw on the theories of the current entrepreneurship domain. By applying the theoretical frameworks of startup ecosystem, this article uses two case studies to examine how social entrepreneurs originating from a Singapore university engage the stakeholders of the ecosystem to create social impact both locally and internationally.

Our study has made several contributions. First, our case analysis reveals that the growth of organic business model for social enterprises could be slower than that of profit-driven enterprises. More could be done to help investors and social entrepreneurs who are new to social entrepreneurship to understand the more appropriate growth trajectory, funding projections and impact measurement. Second, this study brings into focus the potential that university’s incubation facilities and mentoring support have as change agents in promoting the role of higher education institutions in fostering social entrepreneurship. The institutes of higher learning are recommended to develop high-quality networks of mentors with expertise and prior experience in social entrepreneurship across a range of target sectors. Finally, the results of the study highlight that to provide a level playing field to social enterprises with and without university affiliation, the policymakers may draw upon the experience of countries, like Israel, that have successfully built infrastructural support facilities to develop technologically innovative and financially sustainable enterprises that achieve the desired social impact.

Social Entrepreneurship in Higher Education—A Brief Review

Pursuant to the passing of the Bayh–Dole Act in the USA in 1980 and its equivalent in other countries, the role of universities in promoting innovation and entrepreneurship as engines of economic development has been growing in importance. Since then, the concept of ‘entrepreneurial university’ has emerged. In entrepreneurial universities, researchers and faculty members are expected to conduct basic research and develop intellectual capital. Technology transfer organisations have been set up on campus to transfer knowledge generated by their researchers to the industry for commercialisation into new or enhanced products and services (Cheah & Yu, 2016; Rae, 2010). Entrepreneurial education has been increasingly offered to promote awareness of entrepreneurship and its contribution to the society. Startup bootcamps and business case competitions with seed funding like awards have frequently been organised to provide experiential learning on entrepreneurial processes like opportunity identification and business modelling (Corbett, 2005).

It is noteworthy that some scholars argued that the notion of entrepreneurship has taken a shift from the old to the new model in 2008, when the global financial crisis and the ensuing world recession took place (Rae, 2010). Before 2008, which was referred to as the old era, the Schumpeter’s model of creative destruction was advocated and opportunity pursuit and value creation in financial terms of profit maximisation by individuals with little regard to resources, ethics or consequences were popularised. Media stereotypes of successful entrepreneurs then were reinforced by the reality TV programmes such as The Apprentice and Dragon’s Den in USA and UK, respectively. From 2008 onwards, the collapse of the banking and financial systems in the UK and USA have ushered in a new era characterised by a new discourse among the policymakers and educators about the need for entrepreneurs to be more ethically responsible. Apart from financial value, entrepreneurs in the new era are expected to create other forms of value in the social, creative or environmental sectors. They should be socially connected, embrace collectivism and inclusiveness in their new ventures with more environmentally sustainable practices and resource stewardship.

In institutes of higher education, there is a corresponding shift in the concept of entrepreneurship from venture creation that is based on capitalist growth theory towards one that is socially inclusive, ethically responsible and environmentally sustainable. In view of this development, some researchers posit that there is growing convergence between mainstream entrepreneurship and social entrepreneurship movements (Rae, 2010). While it is difficult to wholly attribute the exponential growth in social enterprises to either of these two movements, it is evident that growth trajectory will continue.

In the literature of social entrepreneurship, two overlapping strands have been identified. One strand refers to the generation of positive social change through re-organising resources, undergirded by the ground-breaking research of Dees (1998). The other strand focuses on building organisational capability to become commercially viable and socially meaningful so as to achieve earned income and social outcomes (Boschee, 2001). Social entrepreneurs are found to face challenges like any other entrepreneur, however some scholars contended that certain key issues are distinct to social entrepreneurship: managing accountability, managing twin bottom line and managing identity (Tracey & Phillips, 2007). While a stream of literature has also focused on how an academic institution can inspire and accelerate social entrepreneurship through mechanisms such as technology commercialisation and startup programmes or incubation schemes, it is evident that the academic institution is only one of the many supporting agencies in the ecosystem. There are many other stakeholders and domains that social entrepreneurs are expected to interact with to enhance their chances of survival.

This article will investigate how two social enterprises founded by researchers and students of the National University of Singapore (NUS)’s work within the university and the larger ecosystem to start and grow their ventures, using a more collectivist approach to meet the needs of the underserved communities in the domestic and regional markets.

Methodology

Framework of Study—Startup Ecosystem

The success of new ventures may be attributed to other factors beyond the enterprise itself. The ecosystem in which the ventures operate also plays a significant role in their performance (Cheah, Ho, & Lim, 2016; Isenberg, 2011). Isenberg defined the startup ecosystem as

… a set of networked institutions … with the objective of aiding the entrepreneur to go through all stages of the process of new venture development. It can be understood as a service network, where the entrepreneur is the focus of action and the measure of success. (Isenberg, 2011)

Several frameworks have been used to study startup ecosystem, such as the Entrepreneurship Measurement Framework by OECD, Doing Business by World Bank, Entrepreneurship Ecosystem by World Economic Forum and Babson Entrepreneurship Ecosystem Framework by Babson College. Cheah et al. (2016) recently applied the framework extensively in their review of Singapore’s innovation and startup ecosystem and highlighted the critical role of public science in the ecosystem. Building on Cheah et al.’s (2016) work, this article uses the framework by Isenberg (2010) for the Babson Entrepreneurship Ecosystem project, as it is found to be more flexible and richer in theoretical concepts than the others. The ecosystem framework comprises six domains, as presented in Figure 1.

Figure 1

Source: Cheah et al. (2016).

The Policy domain focuses on government leadership and regulations like tax and bankruptcy policies in support of entrepreneurship. In Singapore, policies pertaining to innovation and entrepreneurship were advised by the Research, Innovation and Enterprise Council (RIEC) comprising the Ministry of Health, Ministry of Education and Ministry of Trade and Industry as well as their agencies and statutory boards. The Council is chaired by the Prime Minister of Singapore and its policy implementation coordinated among the ministries through the National Research Foundation.

Finance examines the range of funding sources available to entrepreneurs, ranging from government grant and equity investment schemes to venture capital (VC) and bank loans. To attract and incentivise different stakeholders to foster a vibrant innovation and vibrant ecosystem, a spectrum of specific schemes have been implemented in Singapore to target at business angel investors, accelerators, incubators, innovators, entrepreneurs and venture capital firms. As R&D was integral to driving innovation and entrepreneurship, the government supported research, innovation and enterprise (RIE) through 5-year funding tranches, with the two most recent plans being the RIE Plan 2015 and RIE Plan 2020. The budgets for the plans have increased by 18 per cent from US$11.2 billion in 2011–2015 to US$13.2 billion in 2015–2020. In the private sector, the aggregate venture capital deal value has also grown steadily from US$12 million in 2007 to US$454 million in 2013.

Culture looks at the societal norms and inspiration of entrepreneurship for the next generation. According to the latest report by Global Entrepreneurship Monitor (GEM, 2016), 62.9 per cent of Singapore respondents accorded high status to successful entrepreneurs, while 51.7 per cent regarded entrepreneurship as a good career choice. With more than 11 per cent of individuals in the working-age population actively involved in startups, Singapore has been ranked among the top five globally, after the USA, Australia and Canada (GEM, 2016).

In the Supports domain, the presence of physical infrastructure (e.g., incubation and accelerator facilities) and professional support services (e.g., legal, financial and human resource) are factors critical to the ecosystem. By 2016, there were at least twenty five incubators, thirty accelerators and thirty five coworking spaces in Singapore. While some coworking spaces provide basic physical facilities comprising desks, meeting rooms and pantries, others provide business support services like accounting and staff recruitment (Cheah & Ho, 2019; Cheah et al., 2016).

Human Capital looks at the quality of workforce and higher education system. Investment in human capital through higher education and training are important to raise the skill levels and productivity of the workforce. The number of higher education graduates increased from 40,755 in 2005 to 60,493 in 2015 (Ministry of Manpower, 2015). Despite the increase in graduates from institutes of higher learning, the labour market remained tight, with low employment rate of 1.9 per cent in 2015, due to the small population size. Hence, shortage in human capital remains one of the key challenges for startups.

The Markets domain examines the presence of customers and entrepreneurial networks. Facing the constraint of a small domestic market, startups have to focus on ‘real market opportunity’ in the surrounding Southeast Asian countries. According to a study by Herrmann, Gauthier, Holtschke, Berman, and Marmer (2015) of Singapore businesses, more than 49 per cent of their customers come from overseas markets.

Research Approach/Design—Case Study Approach

While quantitative research is better than case study in validity and reliability, the latter is superior to the former in theory building and validation. This is because case study allows us to address the ‘why’, ‘how’ and other deeper issues. In this article, we adopt the case study approach, following the guidelines by Marshall and Rossman (2014) and Yin (2013):

Selection of the case sample: this article selected two typical social enterprises that were founded by NUS’s researchers and students using their academic research as part of their solution offerings—WateRoam Pte Ltd and Tware Pte Ltd.

Collection of case data: This article captures the major events of the social enterprises, such as raising fund, winning award and signing key customer or partner contracts, as their significant milestones in their growth trajectory. Case data were collected from both secondary sources (e.g., company websites and media reports) and primary sources (e.g., interviews with the company cofounders)

Data analysis and report writing: The case data will be analysed using the startup ecosystem framework by Isenberg (2010). With in-depth case analysis in each of the six domains of the ecosystem framework, insights were derived and conclusion was drawn.

This article will investigate how two social enterprises founded by researchers and students of NUS’s work within the university and the larger ecosystem to start and grow their ventures using a more collectivist approach to meet the needs of the underserved communities in the domestic and regional markets.

Case Study and Key Findings

WateRoam Pte Ltd

‘A world without thirst’ is the simply-stated yet audacious goal of WateRoam, a water innovation social enterprise founded in 2014 by three undergraduates from NUS. The company develops and deploys cost-effective water filtration solutions to provide clean drinking water to rural communities and disaster-hit locations. Utilising membrane technology, the company’s range of ROAMFilter systems is durable, portable, lightweight and most importantly, affordable.

When they developed the idea for a low-cost water filter, Lim and his cofounders did not have any plans to commercialise the product via setting up a social enterprise. The primary thought in that initial stage was to provide a technological solution to a known problem that plagues many underserved communities in the developing world, namely lack of access to clean drinking water. How this germ of an idea evolved to the present-day WateRoam, an award-winning startup with among the highest name recognition among Singapore’s social enterprises, illustrates the ecosystem Supports domain in the Babson framework.

The three cofounders, all NUS’s undergraduates at the time, were brought together when they formed a project team in 2014 for the inaugural Hydropreneur Lean LaunchPad (LLP) programme, a unique technology translation platform jointly developed and delivered by NUS Enterprise and the Singapore Water Academy, which is the training arm of Singapore’s national water agency, the Public Utilities Board (PUB). The programme pertains to both the Policy and Human Capital domains, reflecting the Singapore government’s agenda to promote venture creation in the field of water technology and the role of the university in developing entrepreneurial talents. Two of the cofounders, Chief Marketing Officer Lim and Chief Technology Officer Vincent Loka, were already acquainted, having taken some modules in common in the NUS School of Engineering. The third cofounder, Chief Executive Officer David Pong, was enrolled in the Business School and became acquainted with the other two cofounders through the Hydropreneur LLP programme. All three had different motivations, but shared a desire to bring about social good. Lim believed that bold social ideas can transform lives and livelihoods for those who are most in need. As Finance major, Pong wanted to utilise his business skills to contribute back to the society in a way that is not only profitable, but also fulfils a social cause. As an Indonesian, Loka was familiar with the pressing needs of poor or rural communities in his homeland. The WateRoam project united these disparate motivations into a concrete social mission.

Lim now credits the Hydropreneur LLP programme as a key impetus that transformed an innovative idea into the creation of WateRoam as a social enterprise. As stated by Lim, the social enterprise model ‘sits well with what we are doing; we want to be agents for change and at the same time, generate profits’. Thus, aided by the catalysing processes of the Hydropreneur LLP programme, the team went on the establish WateRoam Pte Ltd.

As a fledgling social enterprise set up by young and inexperienced student entrepreneurs, WateRoam draws heavily on the Human Capital and Supports domains of the ecosystem. In the Human Capital domain, the role of played by NUS is highlighted to be of particular importance. Lim cites the value of cross-faculty learning, which he availed himself to, allowing engineering students to explore technopreneurship programmes offered by the Business School and to learn about the commercial aspects of running a startup. As a company, WateRoam also benefits from the research resources of the university in the form of data and information that provide a scientific basis to understand the environment, solve problems and make business decisions.

In the Supports domain and overlapping with the Human Capital and Policy domains, WateRoam receives support from the university and the government. In 2015, the startup was awarded an Innovation Practicum Grant by NUS Enterprise, a significant milestone as this provided the necessary funding for a working prototype to be built for an improved version of the filtration system. Currently, WateRoam is incubated by NUS Enterprise. In addition to being located physically at The Hangar, an on-campus incubation facility, WateRoam has access to the NUS Enterprise network of advisors and mentors. WateRoam also received financial and mentorship support as a recipient of the ACE Startup Grant, funded by the national entrepreneurship promotion agency, Enterprise Singapore (former SPRING Singapore) and administered by the Action Community for Entrepreneurship (ACE).

An important aspect of the Markets domain, made possible by mentors in the Supports domain, is the forging of scientific and industry connections. In the case of WateRoam, one of their mentors is a professor who has strong ties to companies in the water industry that possess experimental technologies with great potential value. The professor and other mentor fulfil an important role as gatekeepers to facilitate discussion between WateRoam and industry, vouching for the young entrepreneurs and acting as icebreaker at the initial point of contact.

These industry connections in the Markets domain feature in an on-going decision nexus faced by WateRoam. For now, the RoamFilter range of products are produced via a contract manufacturing model, which has been determined to be the most cost-effective method under current volume conditions. However, having their own production capabilities is in the pipeline as the company scales up and grows. In fact, this is regarded as one of the top challenges confronting the WateRoam: how to take the final step to scale up and mass manufacture. The reality is that there are very high costs associated with tools and machines for fabrication. The industry connections and mentor networks inform this decision-making process.

To reach their customers in the Markets domain, WateRoam leverages heavily on partners, especially non-governmental organizations (NGOs), corresponding to the Supports domain. They adopt the philosophy that the people on the ground are in the best position to understand the needs of the communities and they attempt to facilitate the process of ground deployment of the water filtration systems in ways that balance financial considerations with optimal impact for the communities. The involvement of NGOs helps to reduce the cost borne by the end-user customers. As Chief Marketing Officer, Lim believes that although there is still much room for growth, WateRoam has reached out to a considerable market in a relatively short time. This has been achieved in part via strong support from industry and the mentor networks of NUS Enterprise and ACE (Supports, Policy and Human Capital domains). Acting on its own initiative, the team has been actively engaging potential partners and customers by participating and handing out information in platforms such as trade shows and sustainability expos, corresponding to the Supports domain.

There are several ways in which WateRoam products can reach its markets on the ground; first and most prominent thus far, through NGOs, second, through governments at various levels and third through retail distributors. An emerging distribution model for WateRoam is micro-entrepreneurship in which individuals are empowered to be local water businessmen and women who will deploy the technology solution to their local communities. In many ways, micro-entrepreneurship encapsulates the twin motives of the social enterprise. The micro-entrepreneurs are part of the distribution value chain that pushes out the product and thus increases revenues accruing to the company. At the same time, the social mission is aligned as the micro-entrepreneurs can have their lives and livelihoods drastically improved. The more successful the micro-entrepreneurs the higher will be the number of individuals in local communities who benefit from wide-spread access to clean water. Micro-entrepreneurship could also address another key challenge faced by WateRoam, that of monetising a social enterprise when there is lack of money in the target communities. The micro-entrepreneurship model could be a way to tap on the capital that does exist, such as time, enthusiasm and endeavour.

For micro-entrepreneurship to work, it is not sufficient to focus on water filtration product itself. A mindset change in the local communities is also needed. As an example, individuals in some rural communities spend between US$20 and US$30 a month on medical palliative care. Much of these expenditures can be avoided if there is access to clean water, because many ailments are caused by drinking polluted water and poor living conditions due to lack of clean water. WateRoam has to invest time to work with local partners and train them to communicate with the potential micro-entrepreneurs to spread this fundamental message about the importance of clean water.

The social impact created by WateRoam is summarised in Table 1. In a short period of just over two years, more than 14,000 individuals have benefitted from the deployment of WateRoam’s filtration system.

Table 1

Impact of WateRoam

	Date	Country	Partners	Number of Beneficiaries
Rural School Water Intervention	August 2016	Cambodia	Don Bosco Calauan Laguna and SPRING Technologies Pte Ltd	320
Rural Village Water Intervention	July 2016	Philippines	Relief.sg and Wahana Visi Indonesia	150
Rural Village Water Intervention	Jun 2016	Indonesia	Togather Café and World Vision	1,000
Myanmar Flood Relief	August 2015	Myanmar	Relief.sg	2,471
Nepal Earthquake Disaster Relief	May 2015	Nepal	Relief.sg, Life Care Society and Singapore Red Cross	4,550
Vanuatu Cyclone Pam Relief	April 2015	Vanuatu	Relief.sg and Singapore Red Cross	2,700
East Malaysia Flood Relief	January 2015	Malaysia	Relief.sg and Centre for a Better Tomorrow	2,700
Chroy Metrey Village, Cambodia	June 2014	Cambodia	Canact Asia and SRMCDO (Siem Reap Muslim Community Development Organization)	300
Tanjung Pinang, Bintan, Indonesia	June 2014	Indonesia	Canact Asia	150

Source: Wateroam.

Tware Pte Ltd

Tware was cofounded in 2011 by Mr James Teh along with Wei-Liang Lin and Sep-Riang Lai. The company provided the Tjacket, a smart jacket—a wearable technology product that could simulate a hug using Haptics technology—a form of kinaesthetic communication that creates touch sensation using vibrations. The idea of wearable technology could be traced back to Teh’s PhD research project on human–computer interfaces with the NUS Faculty of Engineering from 2007 to 2011. His project involved the development of prototype called ‘Huggy Pajama’, which parents could use to communicate remotely with their children using virtual hugs. Lai, a final-year student in electrical engineering, working on the same project with Teh in NUS, had deep knowledge about electronics hardware that complemented well with Teh’s expertise in human–computer interfaces (Cheah & Wu, 2016).

When a therapist chanced upon Teh’s research one day in 2010, she suggested the use of such devices as the sensory disorder therapy of children with autism—a brain development spectrum disorder characterised by sensory dysfunctions. Teh also learned that individuals with hyper- or hypo-sensitivity to external stimuli in their environment could be soothed when touched or hugged. Determined to make an impact on more people, Teh and his cofounders decided to progress beyond their prototypes to build real products for the market and have them commercialised. Since then, Tware was born and its flagship product Tjacket was conceived to calm the nerves of individuals with sensory modular difficulties, such as those with autism, stress or anxiety. Led by Teh as the chief executive officer, Lai played the role of chief technology officer. Lin, on the other hand, was a NUS graduate in industrial design introduced to the team by Teh’s professor in Japan. Lin’s experience in product design made him an ideal candidate as the chief innovation officer, who helped develop aesthetically appealing products with user-friendly functions.

In the Supports and Human Capital domain of the ecosystem, Tware had access to NUS’s researchers as well as the knowledge generated by their R&D work. The startup licenced from NUS Enterprise, the researchers’ know-how on Huggy Pajama and Tjacket—a remote deep pressure vest for autistic individuals, a non-commercial prototype version that has no software interface designed and is non-portable. Besides technology licencing, NUS Enterprise provided Tware business mentoring and fundraising advice. With their support, Tware was able to secure grant and investments to commercialise its flagship Tjacket products for special needs users (Cheah & Wu, 2016). Building on the university’s know-how, Tware also developed its own technology to integrate air pressure devices in Airawear jackets, which could inflate at target pressure points to generate the sensation of massage. The company proceeded to file a patent for such massage jackets that aimed to serve the needs of people with postural problems and raise funds on Kickstarter, a crowdfunding platform.

Tware achieved major milestones in 2014, when it raised a total of S$2.8 million in private equity funding through its seed round of investment. With the additional fund injection, Tware built 1,000 units of the Tjacket and sold them at a retail price of US$549. The sales were encouraging, with an increase of 65 per cent by the second year (Cheah & Wu, 2016). In July 2014, Tware clinched the top prize at the annual Asian Entrepreneurship Award organised by Future Design Centre Incorporated Association, a Japanese non-profit organisation that supported entrepreneurs across Asia to combine talent and technologies to solve societal and environmental issues. The award came with a prize of ¥3 million and two-year tenancy with KOIL, a coworking space and startup incubator in Kashiwa City, Japan. The availability of private equity funding in Singapore and monetary awards in Japan indicates a positive development of the Finance domain.

Having just graduated from engineering and industrial design disciplines, the three cofounders had little knowledge about starting a business and translating laboratory prototypes into products that are commercially viable, user desirable and technologically feasible. To have quick access to expertise in product development, the team decided to participate in the Business Advisor Program jointly offered by Enterprise Singapore (former SPRING Singapore) and the Singapore Institute of Management (SIM), a management institute providing higher education and professional training. The aim of the Program was to help enterprises in developing capability and management. In the Program, a business advisor with relevant experience was introduced to the team to train, coach and mentor the team in the mass production of commercial-grade units of Tjackets. Leveraging the Human Capital and Policy domains of the ecosystem, the team worked closely with the business advisor from the Program to identify suitable suppliers of airbags and related accessories in China and contract manufacturer with headquarters in Singapore and factory in Malaysia. After integrating the Chinese supplies with electronic components in the Malaysian factory, the finished goods were shipped to Tware Singapore (Cheah & Wu, 2016). Although offshore production was used in the manufacture of Tjackets, Tware was able to maintain high product quality by performing quality inspection of the finished goods before sales and distribution.

To foster social entrepreneurship with the view to building a more sustainable, innovative and inclusive society, the Singapore Centre for Social Enterprise (raiSE) aimed to develop the Culture domain of the social enterprise ecosystem by facilitating interaction between the social enterprises and private sector stakeholders. In 2015, raiSE connected Tware with Uniqlo, a Japanese casual wear designer, manufacturer and retailer. Since 2014, Uniqlo reached out to the special needs community with its In Store Shopping Experience programme in partnership with voluntary welfare organisations like Asian Women’s Welfare Association. The programme aimed to provide disadvantaged children in Singapore with in-store shopping experience. Riding on the success of the programme, Uniqlo expanded it to other stores in the region as well as sought partners such as Tware to augment its existing range of apparel that can cater to children with autism. Tware and Uniqlo collaborated by having the former’s smart pressure technology integrated in the latter’s range of fashionable jackets. The outer Uniqlo jackets were woven with inner Tware deep pressure vest, where the smart pressure could control through a button or mobile phone application (Mytjacket, 2015). The wearer may feel the sensation of a hug through the pressure generated by the inflation of an airbag layer in the jacket. The preferred intensity of the hug may be selected by varying the degree of pressure to be created with a slider in the mobile application.

After testing different sales and marketing channels and comparing their customer conversion rates, the team found that referrals from network of special needs schools and therapists were the most effective means of reaching out to customers (Cheah & Wu, 2016). Building on this network, Tware collaborated with more than fifty international organisations (including hospitals, therapy centres, special needs schools and support groups) on the use of Tjacket for conditions such as anxiety, ADHD and autism. The company also reduced the cost of Tjackets for schools, Volunteer Welfare Organisations and low-income families with the help of Corporate Social Responsibility (CSR) programmes managed by corporations. By having a cloud system to monitor how the teachers, parents and special needs children were using the jacket, the R&D and product design teams were able to develop an enhanced version of Tjacket, which was more durable, less hot and lighter in weight. In April 2016, the team launched Tjacket version 2.0. By then, more than 50 per cent of the Tjacket revenue came from international markets.

The social impact created by Tware was evident since the launch of its flagship Tjacket in 2014. Within the first year, Tware engaged more than twenty special-needs schools, therapy centres and homes in Singapore, while their products had supported at least 600 beneficiaries and caregivers worldwide. By 2016, 1,000 units were sold, with approximately half the buyers from Singapore and the remaining from over seven countries and territories, including Australia, Japan, Germany and Taiwan. The Tjacket also caught the attention of the USA Veteran Affairs (VA) department that supported more than twenty million veterans. More than 10 per cent of the veterans who served in the Vietnam War, Gulf War and Iraqi operations were found to develop post-traumatic stress disorder (PTSD) in any given year, according to the VA department. The department was interested in the potential application of Tjacket to help treat these soldiers with their PSTD (Cheah & Wu, 2016). In February 2016, the Tjacket won the best innovation in Smart Wearable Technology Award by the World Government Summit in Dubai. Table 2 summarises the key milestone of Tware.

Table 2

Key Milestones of Tware

Date	Event
2007–2010	Teh pursued his PhD studies where he met Lai and Lin.
2010	Therapist saw the Prototype of Huggy Pajama and suggested developing a product for sensory disorder therapy.
2011	Teh, Lai and Lin founded Tware.
2012	Received angel investment.
Mar 2013	Filed Tjacket patent in Europe and the USA.
Nov 2013	Signed contract with the first international distributor in Japan.
2014	Raised total seed investment of S$2.8 million.
Jun 2014	Launched via online e-commerce platform Food and Drug Administration Class 1 devices.
Jul 2014	Won the Asian Entrepreneurship Award.
Jul 2015	Collaborated with Uniqlo.
Feb 2016	Won best innovation in Smart Wearable Technology Award at World Government Summit (Dubai).
Apr 2016	Launched improved Tjacket v 2.0.
Apr 2016	Launched AiraWear campaign on Kickstarter

Source: Cheah and Wu (2016).

Discussion and Implications

From the case studies of WateRoam and Tware, we have gathered several insights about how the social enterprises have leveraged the ecosystem to start and grow their ventures. The findings also entail implications for policymakers in ensuring that the ecosystem is conducive in supporting social inclusiveness of academic innovation and entrepreneurship.

In the Finance domain, WateRoam has received grant funding from a number of organisations. In addition to the Innovation Practicum Grant from NUS Enterprise and the ACE Startup Grant, WateRoam is a beneficiary of grants from the Singapore International Foundation, Shell and the DBS Foundation. This illustrates that there is munificence in the Singapore ecosystem to fund social enterprises that assist developing economies. To date, the startup has not raised private equity funding and moving forward, it hopes to raise equity funding through social impact investment. It is acknowledged that this could provide somewhat different challenges compared to conventional venture capital financing. On the one hand, the nature of social impact investment is that investors need to see some track record of impact created. On the other hand, social ideas that involve changing business norms in rural communities may require paradigm shifts, time and patience to give due weight to the human element. As such, growth of an organic business model for social enterprises could be slower at the start, which delays the timeline for raising impact investment. The Finance domain is a potential area of improvement in Singapore’s ecosystem for social entrepreneurship. As social enterprises are quite new in Singapore, at least in terms of having a critical mass of enterprises, both investors and social startups are still uncertain about the correct funding and growth formula. It may be instructive to study the experience of India, which has a rich history of social enterprises and has faced similar financing issues in the 1990s.

Policymakers can facilitate the expansion of venture financing, which is geared towards social impact investment, in much the same way that regulatory changes and fiscal incentives fuelled the growth of Singapore’s VC industry. For example, setting up a government fund of funds targeted at innovative social enterprises can provide initial flow of funding and jumpstart the domestic market for social impact investing. Another possible policy approach is to promote intermediaries like the Impact Investment Exchange (IIX) that bridge finance providers and social entrepreneurs. A sufficiently large community of investors can provide the impetus to set standards for measurement and reporting of social impact, which will attract more funding into this domain.

The mentor networks from NUS Enterprise and ACE have been crucial for the WateRoam team to meet and connect with people from many different areas and backgrounds in the world of technology entrepreneurship, extending to the Markets domain. Among the connections established are those with international suppliers, government organisations and NGOs that are an essential part of WateRoam’s distribution channels. The company has benefitted from the goodwill capital of its mentors, who have spread positive word of mouth and provided referrals to potential partners, strengthening the Markets domain. Like WateRoam, Tware had benefitted from the university’s incubation facilities and mentoring support, enabling them to validate their product-market fit and business models before scaling. Given the pivotal role that the university’s mentor networks can play in extending the Markets domain of the new social ventures in their fold, it is recommended that institutes of higher education commit to building high-quality networks of mentors with knowledge and prior experience in social entrepreneurship. Policymakers should be cognisant of this when making funding decisions for entrepreneurship programmes at public universities.

In Singapore, about half of the startups cease operation in the first five years (Ministry of Trade and Industry, 2014). A similar trend is observed among the new ventures in the USA (Small Business Administration, 2014). While mainstream entrepreneurship encounters challenges of commercial viability, social enterprises face even greater odds as they struggle to balance double, if not triple bottom lines. Approximately half of the 80 social ventures funded by the Singapore Ministry of Social and Family Development (MSF) could not sustain themselves in the competitive environment beyond their third year of operation (Singh, 2014). However, some social enterprises, like Tware, have not only successfully exploited university’s technological know-how to develop innovative solutions for their target beneficiaries, but also leveraged the incubation resources offered by the university to access valuable networks of mentors, partners and investors. While university researchers and students have access to infrastructural support facilities on campus, other social entrepreneurs without affiliation to such universities would not benefit from their resources. It would, therefore, be expedient to enhance the Supports domain of Singapore’s ecosystem. Examples of infrastructural enhancements that can be considered by policymakers are described below.

Both WateRoam and Tware are technology-based social enterprises that commercialised ideas developed at the university. In doing so, these companies demonstrate the fulfilment of a major objective of public-funded research, that of creating social returns by benefitting society at large. The pool of knowledge and technologies residing in universities and public research institute has the potential to generate great social impact, if made available to social entrepreneurs. To facilitate this enhancement of the Policy domain, policymakers need to channel resources towards translational activities that raise technology readiness levels and shorten time-to-market. This strengthening of the Supports domain can be achieved in multiple ways: translational research funding given to research labs as an extension to R&D efforts, setting up specialised centres that focus on translational activities or grants for prototype development directed at startups and social enterprises.

The two case studies highlight the importance of private sector corporations and NGOs as partners to social enterprises. By leveraging on the resources and networks of these partners, Tware and WateRoam are able to not only expand their market outreach, but also enhance their technological capability and lower the prices of their products. This is crucial for the mission of creating positive impact for disadvantaged segments of society. Government agencies can play a significant role in facilitating these partnerships between social enterprises and large organisations. In Singapore, existing programmes to promote partnerships between SMEs and large corporations, like the Partnerships for Capability Transformation (PACT) initiative, serve as a template. A version of PACT—which provides up to 70 per cent funding support for collaborative projects—could be tailored for the social enterprise context by targeting potential partners to include NGOs and the CSR departments of corporations.

The university is a conducive environment for social enterprises because it essentially functions as an accelerator. In addition to the infrastructural support availed to all university startups, Tware and WateRoam also benefitted from individualised advice that took into account their social missions and double bottom lines. This is instructive for the Singapore ecosystem at large, in that not all incubation and accelerator programmes would fully serve the needs of social enterprises. In Israel, for example, specialised accelerators, like Tech For Good Rally, were set up to help social entrepreneurs build their ventures by applying technological innovations to social problems and providing them access to like-minded organisations, mentors and investors for advice and funding. Drawing upon their experience, our policymakers may consider making available more infrastructural resources of this nature, particularly in the area of public-funded R&D, to accelerators and incubators that specialise in social entrepreneurship. These infrastructural resources could support the larger community of social entrepreneurs by equipping them with the know-how, capability and networks to develop commercially viable and technologically innovative social ventures to enhance their financial sustainability.

Conclusion

The notion of social entrepreneurship has been popular for more than a decade. However, there has been limited study on the role of the startup ecosystem in social entrepreneurship. Little attention has been paid to understand how social entrepreneurs engage the public agencies, non-government institutions and the target beneficiaries to discover and evaluate opportunities and formulate their business models to develop sustainable social ventures. The theoretical concepts of entrepreneurship, on the other hand, are relatively well established, with its origin traced back to Schumpeter, who posited entrepreneurs as individuals who created businesses by bringing innovations to market. Since then, multiple streams of entrepreneurship research have emerged, such as those that focus on the relationship between an entrepreneurial firm’s characteristics and the ecosystem it operates in and academic entrepreneurship. While some researchers posited that the topic of social entrepreneurship was unique as it transcended the various domains of entrepreneurial studies, others argued that it was not distinct from entrepreneurship and recommended drawing on the existing theories of entrepreneurship studies for further enquiry on the study of social entrepreneurship. To address the gaps in the current literature of social entrepreneurship, this article builds on the theories of entrepreneurship studies—startup ecosystem and academic entrepreneurship—to examine how two social enterprises originating from a Singapore university engage the ecosystem stakeholders to create social impact. Our study has made several contributions.

First, our case analysis reveals that the growth of organic business model for social enterprises could be slower than that of profit-driven enterprises, thereby posing a challenge of securing funding for operating social venture activities. The Finance domain is, therefore, a critical dimension of the ecosystem that could be enhanced to help investors and social entrepreneurs who are new to social entrepreneurship to understand the more appropriate growth trajectory, funding projections and impact measurement. The policymakers may also consider referring to countries like India, which have a rich history of successful social enterprises that encountered similar funding challenges in the 1990s. Drawing on the strategies adopted to develop Singapore’s VC industry, policymakers can likewise jumpstart a domestic impact investment industry through a fund-of-funds structure and promoting intermediaries.

Second, this study brings into focus the potential that university’s incubation facilities and mentoring support have as change agents in promoting the role of higher education institutions in fostering social entrepreneurship. In both WateRoam and Tware cases, the mentor networks from the university have been pivotal in connecting them to experts of diverse disciplines as well as customers and beneficiaries from different backgrounds. As the Markets domain of the ecosystem can be extended through networks, we recommend that the institutes of higher learning strive to develop high-quality networks of mentors with expertise and prior experience in social entrepreneurship across a range of target sectors.

Finally, the results of the study highlight that the Supports domain in the form of university’s R&D facilities and accelerator programmes has been instrumental in connecting WateRoam and Tware to potential customers, employees, investors and mentors. While university-born social enterprises have the benefit of these infrastructural support facilities, other social enterprises without affiliation to universities do not have access to such valuable resources. To provide level playing field to social enterprises with and without university affiliation, the policymakers may make available more public-funded research and facilitate partnerships with NGOs and large organisations with strong CSR commitment. Most importantly, the policymakers may draw upon the experience of countries, like Israel, that have successfully built infrastructural support facilities to develop technologically innovative and financially sustainable enterprises that achieve the desired social impact.

Footnotes

Declaration of conflicting interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

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