Social entrepreneurship is the attempt to draw upon business techniques to find solutions to social problems. This concept may be applied to a variety of organizations with different sizes, aims, and beliefs.
Conventional entrepreneurs typically measure performance in profit and return, but social entrepreneurs also take into account a positive return to society. Social entrepreneurship typically attempts to further broad social, cultural, and environmental goals is often associated with the voluntary sector. At times, profit also may be a consideration for certain companies or other social enterprises.
There are continuing arguments over precisely who counts as a social entrepreneur. Thus far, there has been no consensus on the definition of social entrepreneurship, so many different sorts of fields and disciplines are associated with social entrepreneurship. Philanthropists, social activists, environmentalists, and other socially oriented practitioners are referred to as social entrepreneurs. For a clearer definition of what social entrepreneurship entails, it is necessary to set the function of social entrepreneurship apart from other socially oriented activities and identify the boundaries within which social entrepreneurs operate. Some have advocated restricting the term to founders of organizations that primarily rely on earned income–meaning income earned directly from paying consumers. Others have extended this to include contracted work for public authorities, while still others include grants and donations.
Social entrepreneurship in modern society offers an altruistic form of entrepreneurship that focuses on the benefits that society may reap. Simply put, entrepreneurship becomes a social endeavor when it transforms social capital in a way that affects society positively. It is viewed as advantageous because the success of social entrepreneurship depends on many factors related to social impact that traditional corporate businesses do not prioritize. Social entrepreneurs recognize immediate social problems, but also seek to understand the broader context of an issue that crosses disciplines, fields, and theories. Gaining a larger understanding of how an issue relates to society allows social entrepreneurs to develop innovative solutions and mobilize available resources to affect the greater global society. Unlike traditional corporate businesses, social entrepreneurship ventures focus on maximizing gains in social satisfaction, rather than maximizing profit gains. Both private and public agencies worldwide have had billion-dollar initiatives to empower deprived communities and individuals. Such support from organizations in society, such as government-aid agencies or private firms, may catalyze innovative ideas to reach a larger audience.
Social entrepreneurship is distinct from the concept of entrepreneurship, yet still shares several similarities with the classic concept. Jean-Baptiste Say, a French economist, defined an entrepreneur as a person who “undertakes” an idea and shifts perspectives in a way that it alters the effect that an idea has on society. The difference between “entrepreneurship” and “social entrepreneurship”, however, stems from the purpose of a creation. Social entrepreneurs seek to transform societies at large, rather than transforming their profit margin, as classic entrepreneurs typically seek to do.
The concept of “social entrepreneurship” is not a novel idea, but it recently has become more popular among society and academic research, notably after the publication of “The Rise of the Social Entrepreneur” by Charles Leadbeater. Many activities related to community development and higher social purpose fall within the modern definition of social entrepreneurship. Despite the established definition nowadays, social entrepreneurship remains a difficult concept to define, since it may be manifested in multiple forms. A broad definition of the concept allows interdisciplinary research efforts to understand further and constantly challenge the notion behind social entrepreneurship. No matter in which sector of society certain organizations are (i.e. corporations or unincorporated associations and societies), social entrepreneurship focuses on the social impact that an endeavor carries. Whether social entrepreneurship is altruistic or not is less important than the effect it has on society.
The terms social entrepreneur and social entrepreneurship were used first in the literature on social change in the 1960s and 1970s. The terms came into widespread use in the 1980s and 1990s, promoted by Bill Drayton the founder of Ashoka: Innovators for the Public, and others such as Charles Leadbeater. From the 1950s to the 1990s Michael Young was a leading promoter of social entrepreneurship and in the 1980s, was described by Professor Daniel Bell at Harvard as ‘the world’s most successful entrepreneur of social enterprises’ because of his role in creating more than sixty new organizations worldwide, including the School for Social Entrepreneurs (SSE) which exists in the UK, Australia, and Canada and which supports individuals to realize their potential and to establish, scale, and sustain, social enterprises and social businesses. Another notable British social entrepreneur is Andrew Mawson OBE, who was given a peerage in 2007 because of his regeneration work including the Bromley by Bow Centre in East London.
Although the terms are relatively new, social entrepreneurs and social entrepreneurship may be found throughout history. A list of a few noteworthy people whose work exemplifies the modern definition of “social entrepreneurship” includes Florence Nightingale, founder of the first nursing school and developer of modern nursing practices; Robert Owen, founder of the cooperative movement; and Vinoba Bhave, founder of India’s Land Gift Movement. During the nineteenth and twentieth centuries some of the most successful social entrepreneurs effectively straddled the civic, governmental, and business worlds. Such pioneers promoted ideas that were taken up by mainstream public services in welfare, schools, and health care.
Groups focused on social entrepreneurship may be divided into several categories: community-based enterprises, socially responsible enterprises, social services industry professionals, and socio-economic enterprises. Community-based enterprises are based on the social ventures of an entire community that uses its culture and capital to empower itself as an entire enterprise. Socially responsible enterprises focus on creating sustainable development through their initiatives that focus mostly on societal gains. Social service industry professionals work specifically in the sector of social services to expand social capitol for different individuals, communities, and organizations. Socio-economic enterprises include corporations that balance earning profits and nonprofit social change for communities. In addition, there are organizations dedicated to empowering social entrepreneurs, connecting them with mentors, strengthening their enterprise models, and preparing them for capital investments. These accelerators help take social entrepreneurs to global scale. The earliest pioneer accelerator is the Global Social Benefit Institute.
Types of social entrepreneurship
At the heart of social entrepreneurship is the innovation of novel social capital to create a more community-based agency for obtaining assets in individual lives. Private corporations focused solely on profit and nonprofit organizations that are focused solely on social impact are two extremes in the nuanced spectrum of social entrepreneurship, but other types of social entrepreneurs with different visions for their enterprises exist. This may range from individuals solely seeking to allow a society to profit although there is loss to individuals, to individuals who focus on simultaneously profiting both society and themselves. In either case, individuals are at risk for personal profit loss. There is a trend in organizations, especially private organizations that combine traditional interest in corporate profit gain with a desire to create social enterprises that have meaningful social impacts that are innovative in society. The complexity of defining the type of social entrepreneurship also may increase when boundaries cross. For example, certain nonprofit organizations may have initiatives that generate revenue, but only for the purpose of their social enterprise. Additionally, for-profit organizations may be focused primarily on gaining profit, but arrange some of their profits to benefit social activities.
Role of technology
The Internet and social networking websites have been pivotal resources for the success and collaboration of many social entrepreneurs. In the twenty-first century, the Internet has become especially useful in disseminating information in short amounts of time. In addition to this, the Internet allows for the pooling of design resources using open source principles. These media allow ideas to be heard by broader audiences, help networks and investors to develop globally, and to achieve their goals with little or no start-up capital. For example, the rise of open-source appropriate technology as a sustainable development paradigm enables people all over the world to collaborate on solving local problems just as open source software development leverages collaboration.
Many initiatives carried out with social entrepreneurs, while innovative, have had problems becoming sustainable and effective initiatives that ultimately are able to branch out and reach the larger society as a whole (versus a small community or group of people). Studies over the qualities encompassed in a social entrepreneur have shown that very few individuals possess the talent and skills of entrepreneurs with a primarily socially motivated outlook. Thus, compromises in social initiatives developed, often do not reach large audiences. Since the concept of social entrepreneurship has been popularized only recently, some advocates suggest that there needs to be some standardization of the process in scaling up social endeavors to increase impact across the globe.
A need for policymakers around the globe to understand social initiatives further is useful in increasing sustainability, effectiveness, and efficiency. Involvement and collaboration between private corporations and government agencies allow for increased monetary gain for carrying out initiatives, increased accountability on both ends, and increased connections with communities, individuals, or agencies in need. For example, private organizations or nonprofit organizations have tackled unemployment issues in communities in the past. Only short-term solutions are presented, however, or solutions are unable to scale up to a larger degree in order to maximize the number of people affected. Government policies in the financial sector are able to tackle such a large issue; however, the little collaboration that has occurred between the two modes that serve society has stagnated the effectiveness of social entrepreneurship. This stagnation primarily rests in the motives and goals of social enterprises and that of those in policymaking. Those in policymaking naturally tend to have different priorities than social entrepreneurs, resulting in slow growth and expansion of social initiatives.
Since social entrepreneurship has only recently started to gain momentum, current social entrepreneurs are encouraging social advocates and activists to step up as innovative social entrepreneurs. Increasing the scope of social entrepreneurship naturally increases the likelihood of an efficient, sustainable, and effective initiative. Increased participation draws more attention, especially from policymakers and privately owned corporations that may help shape social entrepreneurs through policy changes, training programs, and leadership development focused on developing social entrepreneurs. Simultaneously research shows that as social entrepreneurs attempt to widen their impact and scale their efforts, institutions will have a key role to play in their success.