Australia has been ranked 28th out of the world’s 45 biggest economies, in a global experts’ survey on the best countries for social entrepreneurs.

The Thomson Reuters Foundation Poll, carried out in partnership with Deutsche Bank, the Global Social Entrepreneurship Network (GSEN) and UnLtd, sought to collate date on the work of social entrepreneurs and how they are thriving amid the political, social and financial challenges they face as businesses with a social impact.

The United States ranked highest in the overall poll, with Canada, Britain, Singapore, and Israel trailing close behind in the top five. Turkey is bottom of the list, scoring poorly in most of the 12 indicators used to measure political, economic, regulatory and cultural factors.

Overall, the poll of almost 900 social enterprise experts found a lack of public understanding, access to investment and selling to governments to be the biggest challenges facing the sector.

Despite these findings, data shows investors are looking at such enterprises with growing interest.  According to the 2016 Annual Impact Investor Survey by Global Impact Investing Network (GIIN) and JP Morgan, impact investors – who want to create positive impact alongside financial return – contributed more than $15 billion in 2015 to finance businesses tackling social and environmental problems. This figure is expected to rise to $17.7 billion in 2016.

According to the FASES 2016 report created in partnership with the Centre for Social Impact, there are 20, 000 social enterprises operating across all industry sectors in Australia.

On the issue of sector growth and momentum, Australia came in third, on par with Singapore and India, with a score of 89.6 per cent after America and Canada. Australia was also highly ranked at number three on whether social entrepreneurs can make a living from their work with a score of 68.8 per cent.

Of most interest was Australia’s ranking at 36th, regarding government involvement, which saw experts cohesively agreeing that the sector needed coordinated government support.

A need for policy development and greater support from the government has previously been reiterated in the FASES 2016 report. More than 80% of survey respondents of the FASES 2016 report strongly agreed that state and federal government policy support would encourage new opportunities for social enterprise and generate growth.

It was noted that local government in particular, had a strong role to play in market development for social enterprise, while state and federal governments had a greater part in providing enabling regulation, supporting organisational development and stimulating innovation in policy design.

The Social Enterprise Development and Investment Funds (SEDIF) were established by the Australian Government in 2010, and are the first investment funds of their kind in Australia. The Funds offer finance and support to social enterprises to help them grow their business and scale the impact their work has.

A total investment pool of more than $40 million was created out of the initial $20 million grant funding to the three SEDIF funds – Social Ventures Australia (SVA), Social Enterprise Finance Australia (SEFA), and Foresters Community Finance. Social enterprises then use the finance provided by the SEDIF fund managers, to carry out the work that will deliver the impact.

The SEDIF initiative recognises the potential for social investment approaches to drive effective solutions to social challenges and to encourage meaningful partnerships between the private, community and government sectors.

There is a need to build the pool of investment ready social enterprises that are able to access the debt capital from the three SEDIF funds. More broadly, there is a need in Australia to identify and support social enterprises to become investable.

The Impact Investment Readiness Fund (IIRF) provides the funding for early-stage organisations to access professional services in order to become investment ready.

“The poll results underscore the need for greater support of social enterprise incubators and accelerators from the government in Australia.  It also highlights the importance of supporting the development of early stage investment in for-purpose enterprises” says Daniel Madhavan, CEO of Impact Investing Australia.

“We have no shortage of dynamic social entrepreneurs focused on creating businesses that have meaningful impact.”