What is Social Entrepreneurship and Why the World Needs More Social Entrepreneurs

The Dominance of Neoliberal Ideas about Capitalist Businesses and Their Responsibility

By definition, businesses exist to make profits and incorporate any residual concerns about social good as part of their normal profit seeking behavior.

In other words, it is the case that businesses and their owners worldwide are concerned about social good as just being another imperative rather than the reason for their existence. Indeed, the late legendary, Milton Friedman, who is considered as the Father of Neoliberalism, put it, the responsibility of business is business and hence, social concerns come later.

This mantra has been followed over the last two to three decades by generations of capitalists who aver that they are in business for making profits alone and by extension; their businesses are creating social value.

Thus, whether one is a owner or an inheritor of a family owned business, or an executive at a professionally run firm, or for that matter, an up and coming entrepreneur, what they all have in common is a pervasive profit seeking behavior that places social concerns at the bottom despite the increasing tendency world over to make the corporates and business take greater responsibility for their social outcomes of business.

The Rise of Social Entrepreneurship and Why There is a Momentum behind This Idea

Having said that, there is another category of entrepreneurship which exists solely for promoting social welfare.

These entrepreneurs are known as Social Entrepreneurs since they are primarily focused on actualizing social value and social good as opposed to rampant profit seeking.

In other words, social enterprises are those that have the bottom line consideration of positive social good and creating social value instead of existing for profits alone.

It is not the case that these social entrepreneurs do not make profits or do not enjoy the proceeds from their ventures.

Just that their endeavor is to do good for society through their firms and profits generated are usually divided in a just and equitable manner or are reinvested into their firms as part a cyclical process of social welfare.

As can be seen from the discussion so far, social entrepreneurs reflect a growing trend among capitalists worldwide that the time has now come for such people to take society and its welfare seriously.

Indeed, the latest edition of the World Economic Forum in Davos, which is an annual gathering of the business and political elite and movers and shakers in the world, had as its central theme the responsibility of business towards social good and welfare outcomes.

The Pioneer of Social Entrepreneurship: Mohammad Yunus

Some real world social entrepreneurs are Mohammed Yunus of Grameen Bank in Bangladesh who pioneered the concept of Micro Credit or reaching out with money to those who lacked access to formal banking channels.

Through this endeavor, Yunus managed to vastly improve the lives of poor and the underprivileged wherein through provision of credit in small amounts to those lacking established businesses that are needed for documentation and other requirements that are sought by the formal financial sector.

The experiment in social good proved to be so successful that Yunus was awarded the Nobel Prize for his efforts and what more, he became an example and an inspiration for generations of social entrepreneurs to follow his path and work for the betterment of society rather than for individual gratification.

Indeed, this model was adopted by the Government of Andhra Pradesh in India, which launched the SHGs or the Self Help Groups that are outside of the purview of formal credit and instead, were relying on money lenders to borrow for their small businesses.

Thus, it can be said that Social Entrepreneurs reach those who the eminent management expert, C K Prahlad, calls the Bottom of the Pyramid and ensure that society benefits from their ventures.

Bogus Social Entrepreneurs, Technology, and Role of the Government

Having said that, one must also caution that there are many who in the guise of being Social Entrepreneurs often take the system for a ride and make huge amounts of money in the process.

There are countless examples worldwide of so-called social entrepreneurs who racked up massive profits at the expense of the poor and the underprivileged. Of course, we are not saying that Social Entrepreneurship as a concept has failed because of unscrupulous individuals.

Rather, what we are saying is that government’s world over must encourage and nurture social entrepreneurs and at the same time, put in place safeguards that would serve as a system of checks and balances.

In recent years, the increasing adoption of technology at all levels and in all fields of society has given a fillip to social entrepreneurs.

As it is easy to scale up and reap the efficiencies from the economies of scale and at the same time, leverage the synergies from integrating business and social good with technology, there is more than ever a consensus that when used properly, technology can indeed serve society better and encourage social entrepreneurs.

Conclusion

Lastly, whether you are student aspiring to serve society or an established professional looking to follow your passion, social entrepreneurship can help you in realizing your vision and actualizing your mission.

With famous rich business legends such as Bill Gates, Warren Buffett, and NR Narayana Murthy willing to provide seed capital for social entrepreneurs, there is no dearth of encouragement and incubating for them.

Moreover, governments are also helping social entrepreneurs in their endeavors and hence, we are at a Tipping Point as far as social entrepreneurship is concerned.

To conclude, the world needs more social entrepreneurs and the ecosystems are also helpful for them to make a difference to society.