“Social entrepreneurs possess powerful ideas for attacking problems, and they are unwilling, or unable, to rest until they have spread their ideas society-wide.”
People start their own business for different reasons. Some want to be their own boss, some want to achieve their dreams, and some want to make a lot of money. However, a social entrepreneur sees their business as a way to solve social problems. So what is social entrepreneurship?
The world has witnessed many social problems, ranging from illiteracy, starvation and poverty to gender issues, and climate change, among other things. Social entrepreneurship provides an innovative solution to these problems, and a social entrepreneur aims to improve human life by combining business and social issues.
In this article, we will explore the definition of social entrepreneurship, what drives it, and how it benefits society. We will also share some famous examples of social entrepreneurship.
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Explaining the Definition of Social Entrepreneurship
The word “entrepreneurship” dates back to the 17th century, and the term “social entrepreneurship” is also not a new concept. However, social entrepreneurship has gained popularity in recent years as more people and experts dive into this field to examine what it is and how it benefits society.
J. Gregory Dees, founder of the Centre for Social Entrepreneurship Development (CASE) of Duke University, discussed the concept of social entrepreneurship in his seminal piece “The Meaning of Social Entrepreneurship”. He defines that social entrepreneurship “combines the passion of a social mission with an image of business-like discipline, innovation, and determination.”
Put simply, social entrepreneurship is a special kind of business that addresses social problems and seeks the opportunity to create social value. Social entrepreneurs are innovative and determined to develop a business model that makes a positive impact on social change.
Social entrepreneurs usually care about one specific problem in a specific area, such as education, health care, food shortage, and economic situation. Even though focusing on the local area, social entrepreneurship has a long-term effect and a small social organisation can become a global organisation. Meanwhile, people can also gain benefits from social entrepreneurship.
Social Entrepreneur vs. Business Entrepreneur
Like entrepreneurs, social entrepreneurs notice a gap in the market and see it as an opportunity to improve society. However, there are some key differences between entrepreneurship and social entrepreneurship.
In his book How to Change the World: Social Entrepreneurs and the Power of New Idea, David Bornstein stresses, “What business entrepreneurs are to the economy, social entrepreneurs are to social change. They are the driven, creative individuals who question the status quo, exploit new opportunities, refuse to give up, and remake the world for the better.”
The fundamentals of social entrepreneurship are to create social value; in other words, social entrepreneurs do business for a social mission, while traditional business entrepreneurs aim for profit.
|Business Entrepreneurship||Social Entrepreneurship|
|Wealth creation||Social mission|
|About individual success||About social change|
|Start profit-seeking business||Look for the most effective and innovative methods to solve social problems|
|satisfy customer needs||Improve society|
Business entrepreneurs focus more on markets, business trends as well as customer needs. Their success is based on sustainable profits. Whereas social entrepreneurs aim to come up with a new solution and build a business that serves the community.
However, it does not mean that social entrepreneurship has nothing to do with profits. In fact, social entrepreneurship not only emphasises social value but also stimulates economic growth. The point is that their social mission cannot be reduced to individual benefits. The money they earn is used to promote and improve their social business–it is a virtuous circle.
What Drives Social Entrepreneurship?
Why do people start social entrepreneurship? “More people today have the freedom, time, wealth, health, exposure, social mobility, and confidence to address social problems in bold new ways”, Bornstein summarises in his book. Especially in poor developing countries, building an organisation to serve social missions is more important than freedom.
Economic growth and technological breakthroughs during the second half of the twentieth century have changed human life. Since 1950, the average lifespan has increased by 20 years in western countries and by 30 years in developing countries. People now have more time and resources to consider matters other than their own survival.
Along with the development, the basic education system was built and the increased access to higher education has opened up opportunities for people from different backgrounds. It is no wonder that gender and racial barriers have gradually declined.
With more access to information and knowledge, people are awoken to severe social issues, and therefore they decide to take action.
Definition of Social Entrepreneurship Types
Let’s explore the different types of social entrepreneurship.
- Community-based Social Entrepreneurship
This kind of entrepreneurship works within a specific community to tackle social problems. Social entrepreneurs are usually individuals or small organisations, but their missions are varied, from a failing education system to a poor health care system and from poverty to violence.
Community-based social entrepreneurs work directly with the community, which brings instant changes and long-term improvement. Social entrepreneurs usually start with this type, and it is the opportunity for you to start your own project and make a difference.
- Non-Profit Social Entrepreneurship
Non-profit social entrepreneurship focuses more on social causes than wealth creation. They are usually companies or organisations and these social entrepreneurs raise funds to reinvest in their businesses for the further social cause.
If you are more business-oriented, then this type suits you! You can utilise your ability and power to solve social problems.
- Hybrid Organisations
Hybrid organisations mix non-profit and for-profit elements. For instance, your organisation offers shelters for poor people, and then you start to train and employ them.
No matter what organisation you are running, the core of social entrepreneurship is to contribute to society and look for a social return on investment.
Characteristics of Social Entrepreneurs
Now you have learned some about social entrepreneurship. To become a social entrepreneur, here are some of the characteristics:
- Social mission: this is what distinguishes social entrepreneurs from business entrepreneurs. Profit is part of the business model, but it is not the end. Instead, profit, or wealth creation, serves the social cause.
- Innovative: some social entrepreneurs come from poor regions, which means that they have far less money. Therefore, an innovative and sustainable solution is important. They break old rules, think about new business models, and bring social improvement.
- Never give up: social entrepreneurs are motivated by their strong will to change society. They would not let limited resources stop them from pursuing their social missions.
Examples of Social Entrepreneurship
Social entrepreneurs have existed for a long time, but they receive less attention than business entrepreneurs. Here are two famous examples of social entrepreneurship:
- Muhammad Yunus and Grameen Bank
Muhammad Yunus’s Grameen Bank can be seen as the most successful case of social entrepreneurship. On a field trip to a poor village, Yunus interviewed a woman and noticed that she had borrowed money at a relatively high rate, leaving her only one penny profit margin. In 1983 Yunus formed the Grameen Bank.
This Bangladesh-based microfinance organisation and community development bank provides banking services and small loans to the rural poor, most (97%) of whom are women. In 2006, Muhammad Yunus won the Nobel Peace Prize for his profound impact. Today, Grameen Bank has expanded its reach with over 2,500 branches.
- Wangari Maathai and Green Belt Movement
Wangari Maathai, the founder of the Green Belt Movement (GBM), aims at planting trees, protecting the environment, and fighting for women’s rights.
GBM was founded in 1977, responding to the needs of rural Kenyan women and the food supply. It encourages women to plant trees and trains them to store rainwater and provide firewood. Maathai also won the Nobel Peace Prize in 2004.
People around the world are facing various social problems: unequal education, health problems, poverty, food shortage, violence, and climate change. Social entrepreneurs are innovative and result-oriented people who combine both business and social missions to solve problems and bring long-term social impact.