The basic definition of Social Entrepreneurship is the use of start-up companies and other entrepreneurs to develop, fund and implement solutions to social, cultural, or environmental issues. This concept may be applied to a variety of organizations with different sizes, aims, and beliefs.
Social entrepreneurship is attracting growing amounts of talent, money, and attention. But along with its increasing popularity has come less certainty about what exactly a social entrepreneur is and does. As a result, all sorts of activities are now being called social entrepreneurship.
The nascent field of social entrepreneurship is growing rapidly and attracting increased attention from many sectors. The term itself shows up frequently in the media, is referenced by public officials, has become common on university campuses, and informs the strategy of several prominent social sector organizations.
Why Social Entrepreneurship?
- Creates social benefit,
- Strengthens social capital,
- Reveals innovative and sustainable business models,
- Support the use of technology and innovation,
- Increases employment,
- It considers values such as environmental protection, equality, and social inclusion.
What is the difference between social enterprises from a company that conducts corporate social responsibility activities?
Social initiatives aim to achieve two different goals under the roof of a single organization: to provide social benefit and to make a profit. On a superficial basis, most social enterprises can be perceived as a traditional NGO or company. However, when they are examined more closely, the main feature of these organizations is to use their commercial activities as a tool to carry out their missions while putting their missions at the center. This is precisely where social enterprises are ethically or socially responsible. Unlike companies, the criteria for success in social initiatives is not the profit, but the positive impact on society. Another point that distinguishes social enterprises from these companies is that they are primarily accountable to the communities they serve, not to the shareholders.
What happens when an entrepreneur successfully brings his or her personal characteristics to bear on a suboptimal equilibrium? He or she creates a new stable equilibrium, one that provides a meaningfully higher level of satisfaction for the participants in the system. The entrepreneur engineers a permanent shift from a lower-quality equilibrium to a higher-quality one. The new equilibrium is permanent because it first survives and then stabilizes, even though some aspects of the original equilibrium may persist (e.g., expensive and less-efficient courier systems, garage sales, and the like). Its survival and success ultimately move beyond the entrepreneur and the original entrepreneurial venture. It is through mass-market adoption, significant levels of imitation, and the creation of an ecosystem around and within the new equilibrium that it first stabilizes and then securely persists.
When Jobs and Wozniak created the personal computer they didn’t simply attenuate the users’ dependence on the mainframe – they shattered it, shifting control from the “glass house” to the desktop. Once the users saw the new equilibrium appearing before their eyes, they embraced not only Apple but also the many competitors who leaped into the fray. In relatively short order, the founders had created an entire ecosystem with numerous hardware, software, and peripheral suppliers; distribution channels and value-added resellers; PC magazines; trade shows; and so on.
Because of this new ecosystem, Apple could have exited from the market within a few years without destabilizing it. The new equilibrium, in other words, did not depend on the creation of a single venture, in this case, Apple, but on the appropriation and replication of the model and the spawning of a host of other related businesses.
In order for social entrepreneurship to truly grow, investors and professionals require to see a lot more easily replicable models that can be implemented across various geographies and industries. If there are larger numbers of replicable models, more people would be motivated to become social entrepreneurs themselves, leading to large-scale, effective solutions against the social problems that have been plaguing our collective human society for centuries now. Check our youth exchange which focuses on social entrepreneurship.
Clearly, there is much to be learned and understood about social entrepreneurship, including why its study may not be taken seriously. Our view is that a clearer definition of social entrepreneurship will aid the development of the field. The social entrepreneur should be understood as someone who targets an unfortunate but stable equilibrium that causes the neglect, marginalization, or suffering of a segment of humanity; who brings to bear on this situation his or her inspiration, direct action, creativity, courage, and fortitude; and who aims for and ultimately affects the establishment of a new stable equilibrium that secures permanent benefit for the targeted group and society at large.
This definition helps distinguish social entrepreneurship from social service provision and social activism. That social service providers, social activists, and social entrepreneurs will often adapt one another’s strategies and develop hybrid models are, to our minds, less inherently confusing and more respectful than indiscriminate use of these terms. It’s our hope that our categorization will help clarify the distinctive value each approach brings to society and lead ultimately to a better understanding and more informed decision making among those committed to advancing positive social change.