The Effect of Social Entrepreneurship on Economic Development in Emerging Economies: a review of existing studies

Background: Social entrepreneurship (SE) has emerged as an innovative mechanism to tackle persistent societal challenges, such as poverty, unemployment, and inequality, by prioritising social impact alongside sustainable business models. This is particularly relevant in resource-constrained emerging economies like South Africa, where high unemployment (approximately 33%) and weaknesses in the entrepreneurial ecosystem (ranked 49th globally) hinder traditional economic development (ED) pathways. Objectives: This systematic review aims to examine the relationship between SE and ED, exploring definitions of SE, its interconnections with ED, contextual applications (with a focus on South Africa), associated challenges, opportunities, enabling factors, and contributions to sustainable growth and the Sustainable Development Goals (SDGs). Materials and Methods: using a systematic lierature review approached, the review adhered to the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) framework. Peer-reviewed articles were systematically searched across databases including Scopus, EBSCO (encompassing ABI/INFORM, Business Source Complete, Emerald Management, and GreenFILE), and Google Scholar, using keywords such as "social entrepreneurship," "economic development," "small and medium-sized enterprises (SMEs)," and "job creation." Inclusion criteria focused on scholarly, peer-reviewed papers with robust methodology; 180 documents were excluded due to lack of relevance, absence of peer review, or methodological deficiencies, yielding a synthesised body of literature for thematic analysis. Results: SE significantly drives ED globally, generating an estimated $2 trillion in revenue and creating 200 million jobs, while fostering innovations in healthcare, education, and poverty alleviation. In South Africa, SE addresses unemployment and inequality through community-driven initiatives, despite challenges like funding limitations, regulatory barriers, mission drift, and low entrepreneurial awareness (11.9%). Opportunities include digital technologies, microfinance, youth programs, and South-South collaborations, supported by enablers such as adaptive management, stakeholder engagement, and social capital. Theoretically, SE enhances frameworks like Amartya Sen’s capabilities approach and institutional theory. Conclusion: Social entrepreneurship serves as a vital catalyst for inclusive and sustainable economic development, complementing governmental efforts in emerging markets. While challenges persist, leveraging opportunities and enablers can amplify its impact. Future research should prioritise empirical metrics, digital integration, longitudinal studies, and comparative analyses to maximise SE’s transformative potential.