When combining the words social and entrepreneurship it identifies a process that aims to create value for society in new ways, by combining existing resources under organizations. (Mair, J. & Martı, 2006, 37-38 These organizations are driven by societal needs, focusing on fulfilling a meaningful social mission that aligns with their core values (Rodrigues, J. 2022).
Let’s begin by examining the differences between social entrepreneurship and traditional business. Based on my studies, the primary distinction between social entrepreneurship and traditional business lies in the use of revenue. In social entrepreneurship, revenue sustains the business and supports employees in their shared mission to achieve a social goal, rather than flowing to the capital market as profit.
Traditional businesses aim to generate profit for stakeholders, while social entrepreneurs use market mechanisms to reinvest profits into the business and its social missions. Social entrepreneurs often strive to ensure that a larger share of profit benefits their employees, prioritizing not only customer needs but also the well-being of their workforce. In some of the social entrepreneurship cases I reviewed, entrepreneurs valued employees’ unique contributions and adapted their business models accordingly, respecting their individuality.
Distinctions and overlaps between social entrepreneurship, non-profits, and traditional businesses
Both social entrepreneurs and non-profit organizations are driven by social missions and seek to create social value (Rodrigues, J. 2022). The main difference lies in their use of market tools to achieve social sustainability. Increasingly, non-profits are engaging in commercial activities for self-sufficiency, as relying solely on donations poses a risk to an organization’s sustainability. (Dey, P. & Steyaert, C. 2012).
While distinguishing social entrepreneurship from traditional businesses and NGOs, it’s important to note that these boundaries are not rigid, as there is considerable overlap. Traditional businesses, for example, may begin adopting the status and models of social entrepreneurs. For traditional companies to operate sustainably, they may consider incorporating processes from social entrepreneurship, though such a shift would likely require extensive changes in mission and structure. This suggests that traditional entrepreneurs may gradually evolve into social entrepreneurs over time.
Social entrepreneurship and sustainability challenges on a societal level
Social entrepreneurs address societal challenges by centering their ventures around pressing social issues. Though these challenges may appear localized, they often stem from broader societal problems. Rather than altering social capital, social entrepreneurs focus on building and strengthening it. They seek ways to increase social capital through market-based strategies and work to ensure it remains sustainable over time. (Mair, J. & Martı, 2006, 41).
On my believe the first societal-level challenge social entrepreneurship could address is how humans extract resources and services from ecosystems. Social entrepreneurs often start by addressing local challenges, seeking ways to preserve heritage, nature, and cultures that could otherwise face extinction. They generate wealth and income for communities restricted by societal issues such as inequality and violence without disrupting local life.Imagine how a mining company operating with the principles of social entrepreneurship would be like. Rather than disrupting local communities and damaging the ecosystem, it would prioritize environmental protection and respect for local heritage. Its operations would be designed to conserve the ecosystem while creating lasting value for the community.
The second societal challenge that I see social entrepreneurship could address is financial inequality. Some individuals choose to live with less financial wealth and fewer material possessions, while others are creating social impact by generating income opportunities for people in areas with high unemployment and very low wages.
This brings me to a third societal issue: gender equality. Social entrepreneurship has the potential to address this challenge by empowering women through work opportunities and promoting financial independence in regions where women have limited autonomy.
Social enterprises and the pursuit of growth
According to research by Tykkyläinen, S. (2019, 377) social enterprises pursue growth to ensure their survival, protect themselves from competitors, and shield their social mission from external threats that could undermine their impact.
In the documentary “Living the Change: Inspiring Stories for a Sustainable Future” (2018) growth means power, and growth requires energy. This raises questions: how can social enterprises grow sustainably, and who should benefit? An example shared in our lecture discussed a social entrepreneur offering affordable English language classes in low-income areas. Volunteer teachers participated to immerse themselves in the local community.
However, beneficiaries are not always clearly defined. Volunteering isn’t universally feasible as volunteers might be stuck on the volunteering status, even though the person would like to make a living and integrate into society. Helping others involves a power dynamic and inevitably impacts the local society. Conclusion Social entrepreneurship represents a powerful model for addressing societal challenges. By prioritizing social impact, these ventures build community resilience, protect local ecosystems, and promote economic equality. As traditional businesses explore elements of social entrepreneurship we might be looking at a future where more organizations might adopt sustainable, socially conscious practices.
References
Mair, J. & Martı, I.. Social entrepreneurship research: A source of explanation, prediction, and delight. Journal of World Business 41 (2006) pp. 36–44.
Tykkyläinen, S. ‘Why Social Enterprises Pursue Growth? Analysis of Threats and Opportunities’. Social Enterprise Journal, vol. 15, no. 3, Aug. 2019, pp. 376–96.
Dey, P. and Steyaert, C. (2012), "Social entrepreneurship: critique and the radical enactment of
the social", Social Enterprise Journal, Vol. 8 No. 2, pp. 90-107.
Rodrigues, J. Social Entrepreneurship. In class lecture 27.9.2022. Image: made with Adobe Firefly.
Comments