Social Entrepreneurship – BMS Notes
Social entrepreneurship is a strategy used by people, organisations, fledgling businesses, or entrepreneurs to create, finance, and carry out remedies for environmental, social, or cultural problems. Many different kinds of organisations, with differing goals, sizes, and ideologies, may use this idea. Business indicators like as profit, sales, and price rises in stocks are often used by for-profit entrepreneurs to evaluate their success. Conversely, social entrepreneurs combine for-profit objectives with producing a beneficial “return to society” or they operate as non-profits. As a result, they use several measurements. Generally speaking, social entrepreneurship aims to advance wide-ranging social, cultural, and environmental objectives that are often connected to the nonprofit sector in fields like community development, healthcare, and poverty reduction.
Profit-making social enterprises are sometimes founded to assist the organization’s social or cultural objectives, not as a means to an end in and of itself. For example, a charity that works to house and employ the homeless may run a restaurant to make money and provide the destitute a place to work.
The Internet in the 2010s, especially social networking and social media websites, made social business easier. Through these websites, social entrepreneurs can connect with a large number of people who may not be nearby but who have similar objectives. They can then encourage these individuals to work together virtually, educate themselves on the issues, spread the word about the group’s events and activities, and crowdsource money.
Current interpretation
Muhammad Yunus, the founder of Grameen Bank and recipient of the Nobel Peace Prize, (left) with two young social entrepreneurs (right)
Since its inception in the 1980s, the idea of social entrepreneurship has only grown in popularity. In spite of this, no agreement has been found to define the notion despite decades of searching. It is hard to fully encapsulate the object due to its dynamic nature and the variety of conceptual lenses that academics have used; in fact, experts have likened it to a legendary beast. Due to the diverse backgrounds of scholars, there is a wide range of conceptualizations. These should be grouped into five meaning clusters based on the researcher’s chosen topic and presumptive conceptual framework. According to the popular definition, the first group of writers concentrates on the individual who is an entrepreneur. According to J. G. Dees, social entrepreneurship is the outcome of a very inventive and innovative leader.
A variety of job paths and educational backgrounds, from environmental science and entrepreneurship to social work and community development, may be found among social entrepreneurs. It is challenging to identify social entrepreneurs as a result. Because many social entrepreneurs use innovative, non-traditional tactics, David Bornstein has gone so far as to refer to them as “social innovators” rather than “social entrepreneurs.” Setting the role of social entrepreneurship separate from other voluntary sector and charity-oriented activities and defining the parameters within which social entrepreneurs work are vital for a more precise understanding of what social entrepreneurship comprises. [8] Some academics have argued that the word should only be used to the founders of businesses that make their primary revenue from earned income—that is, money received directly from paying customers—as opposed to money received from grants or gifts. Some have expanded this to include services done under contract for government agencies, while others have included grants and gifts.
In today’s world, social entrepreneurship provides an altruistic approach to entrepreneurship that focuses on the potential benefits to society. In other words, when entrepreneurship develops social capital in a manner that benefits society, it becomes a social effort. It is seen as beneficial as standard corporate enterprises do not focus numerous social impact-related issues, which are necessary for social entrepreneurship to succeed. In addition to identifying current social issues, social entrepreneurs try to comprehend the larger picture of a problem that cuts across many sectors, philosophies, and disciplines. Expanding one’s comprehension of an issue’s societal implications enables social entrepreneurs to create novel solutions and organise existing resources to impact the wider global community. In contrast to conventional corporate enterprises, social entrepreneurship endeavours prioritise increasing social pleasure above profit maximisation. Globally, billion-dollar programmes have been launched by both governmental and private organisations to empower underprivileged people and communities. Support from societal groups, such private businesses or government-aid organisations, might spur creative thinking to reach a wider audience.
Notable figures in the field of social entrepreneurship include Bangladeshi Muhammad Yunus, a prominent figure in South Asian social entrepreneurship, and Pakistani Akhter Hameed Khan. Yunus founded Grameen Bank, which introduced microcredit as a means of assisting creatives in many poor nations in Asia, Africa, and Latin America. He was rewarded for his efforts with a Nobel Peace Prize. Some, like Stephen Goldsmith, the former mayor of Indianapolis, focused on social endeavours locally by contracting with the private sector to provide municipal services.
Qualities of Social Entrepreneuring
In 1980, Bill Drayton established Ashoka, a group that assists regional social entrepreneurs. Drayton instructs his staff to search for four attributes: originality, entrepreneurial spirit, idea’s social effect, and moral integrity. The two components of creativity are problem-solving and goal-setting. Social entrepreneurs has the creativity to envision their desired outcome and devise a plan to achieve it. The Power of Unreasonable People is their book. Pamela Hartigan and John Elkington explain why social entrepreneurs are, in their words, irrational. They contend that these men and women look for financial gain in social production when it is not what others would anticipate. They also try to quantify outcomes that no one is qualified to assess and reject data indicating that their businesses would fail. Regarding this, entrepreneurs possess “A desire to quantify and assess their influence,” according to the Schwab Foundation. Entrepreneurs hold themselves to a high standard, especially when it comes to the work of their own company and how they interact with the communities they serve. Their primary instruments are data, both qualitative and quantitative, which direct ongoing progress and feedback. Ashoka has operations in many nations.
The foundation of entrepreneurial excellence is inventiveness. Entrepreneurs not only have a concept that has to be implemented, but they also know how to execute it and have a viable implementation plan. According to Drayton, “Entrepreneurs can’t stop until that concept is at work throughout the entire society—not just in one area. They have a vision of how society will be changed when their idea is at work.” This is shown by their strong sense of what they see for the future and their determination to see it through to completion. In addition, business owners want positive change because they are dissatisfied with the status quo. It has been said that this changemaking process creates market disequilibria by transforming hostile assets into complementary ones.
Social impact quantifies the idea’s potential to effect change even after its original creator has passed away. When an idea is put into action and has inherent value, it will bring about change even in the absence of the charismatic leadership of the original entrepreneur. These business owners’ inappropriate behaviour may be attributed, in part, to their lack of qualifications for the tasks they do. Most business owners don’t have the knowledge on how to put their ideas into practise. Rather, they surround themselves with a group of competent individuals. This crew is drawn to this notion.
The need for ethical fibre stems from the need for trustworthy leaders who are poised to transform the world. In order to explain this to his staff, Drayton advised them to visualise a frightening scenario and then put the applicant in it with them. The entrepreneur has moral integrity if they are at ease in this situation. One characteristic that sets entrepreneurs apart is their reluctance to claim credit for innovation. They maintain that everyone around them is to blame for the transformation they have wrought. They also have a propensity to be emotionally motivated; their goal is to alleviate pain rather than pursue financial gain. Regarding this trait, Muhammad Yunus states, “He (or she) is motivated by a set of societal aims yet competes in the marketplace with all other competitors.” This is the fundamental justification for being in the industry.
Difficulties in Social Entrepreneurship
Those who enter the sector of social entrepreneurship face several obstacles since it is still in its infancy. Initially, social entrepreneurs aim to anticipate, tackle, and ingeniously handle issues that may arise in the future. While most commercial entrepreneurs focus on filling gaps in the market, social entrepreneurs target challenges that are hypothetical, invisible, or often understudied, such as overpopulation, unsustainable energy sources, and food shortages. It might be almost tough to launch successful social enterprises with only prospective solutions since investors are seldom ready to take on hazardous projects.
The salary gap is the second issue with social entrepreneurship that arises from a shortage of ready investors. According to Elkington and Hartigan, “the pay disparity between commercial and social companies…continues to be the biggest obstacle, limiting the potential of [social enterprises] to attain sustained success and sustainability.” Pay for social entrepreneurs and their staff is sometimes meagre or nonexistent, particularly in the beginning stages of their businesses. As a result, their businesses have trouble keeping talented, dedicated staff. Even if they are addressing the most important problems facing the globe, social entrepreneurs still have to deal with mistrust and stinginess from the exact community they are trying to better.
Providing assistance to people who are least able to pay for it is another reason social entrepreneurs often fail. The exchange of capital—money, obviously—for products and services is the basis of capitalism. To make their organisations viable, social entrepreneurs must develop innovative business models that do not depend on the traditional exchange of wealth. What sets social companies apart from charities—which depend almost exclusively on contributions and outside funding—is their self-sustainability