As the field of social entrepreneurship gains momentum, I often hear the question: Isn’t all entrepreneurship social?
Debatable. Personally, I think Ashoka articulates the difference beautifully:
Just as entrepreneurs change the face of business, social entrepreneurs act as the change agents for society, seizing opportunities others miss and improving systems, inventing new approaches, and creating solutions to change society for the better. While a business entrepreneur might create entirely new industries, a social entrepreneur comes up with new solutions to social problems and then implements them on a large scale.
I understand the skeptics – what does “social entrepreneurship” even mean? It’s vague and ambiguous, and it doesn’t even fit neatly into a sector of the economy! It’s like a bizzaro hybrid of economics + international development + business + social work + finance + philanthropy + technology… what is this? We have seen “innovation” and “social change” before, and the trends come and go… how do we know this isn’t just more hype?
To me, the answer is clear – social enterprise has something that other “innovative” trends have lacked: infrastructure.
Social Entrepreneurship programs and degrees are being offered at the university level, and are being studied by scholars around the world. Some notable programs include:
Duke (CASE program)
NYU (Reynolds program)
Stanford University (GSB social entrepreneurship program)
University of Maryland (Center for Social Value Creation)
Yale (Program on Social Enterprise)
Socially responsible investing, or SRI, has been gaining popularity in the financial sector. Finance and banking are changing the way we bank and invest. Investment from venture capital and private equity is growing, and includes some of the most sophisticated financial institutions in the world:
Policy and legal support
Governments are attempting to facilitate the growth of the sector through new policies, including certifications, tax codes, and governmental support of the emerging sector. Some recent developments in the United States include:
Low-profit limited liability companies, or L3Cs – a legal entity created in 2010, to bridge the gap between nonprofit and for-profit.
Benefit corporations – legislation was first passed 2010 in Maryland.
In the United Kingdom alone, there are over 62,000 social enterprises, and the number is growing. U.S. Secretary of State Hillary Clinton recently showed her support of the sector, saying that “social entrepreneurs who marry capitalism and philanthropy are using the power of the free market to drive social and economic progress.” The State Department is even partnering with the Social Capital Markets Conference, or SOCAP, to co-host a conference on social capital markets. In just a few decades, social entrepreneurship has gone from a small niche movement working mostly at the bottom of the pyramid, to shifting tax codes and legal structures in some parts of the world.
Social entrepreneurs face unique challenges, but their thirst for impact and entrepreneurial spirit have shown the world that this is not a trend, it’s a new way of doing business – and a way to solve some of the world’s most pressing problems.
As the infrastructure of social entrepreneurship solidifies, new related fields, activities and organizations are emerging, creating a true ecosystem of social innovation. Social finance, socially responsible investing, environmental sustainability, institutional responsibility – these terms are tied together by a common thread: a desire to improve our world.
In social enterprise, we see a convergence of a number of fields:
Business that creates true value for society.
Finance that allows us to invest in the businesses that improve our world.
Education of those who seek to find creative and sustainable ways to make an impact.
Banking that makes loans and finance accessible to the “bottom of the pyramid.”
Technology that increases access to, well, virtually everything, everywhere.
Development aid that seeks to improve lives, governance and the general strengthening of society.
Politics that seek to empower citizens and strengthen the nation.
And I am sure there are more.
In the end, social entrepreneurship is more than a new field – it is a new way of doing business.
As Bill Drayton, chair and founder of Ashoka, said: “Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.”
Just as social entrepreneurs revolutionize the industries they work in, social entrepreneurship as a field will not just revolutionize entrepreneurship – it will revolutionize the entire business world. We can see it in a myriad of examples, ranging from Tom’s Shoes to She Enterprises and it’s just getting started. Social entrepreneurship is shifting the heart of business from profit to purpose.
Ten years from now, while businesses and corporations may not be completely dedicated to a social impact, they will support one. And most importantly, no matter what your business, the ultimate goal (and responsibility) of businesses everywhere will have shifted from maximizing profit, to simply making a profit – and that is sustainable change.