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Social Entrepreneurship: Fashion or Passion?

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Last Friday, I was at NUS attending the annual global iConnect 2013 event, organized by the NUS Entrepreneurship Society. The event was meant for young and budding entrepreneurs from around the world. The programme Friday evening was a discussion on Social Entrepreneurship, titled ” Social Entrepreneurship: Fashion or Passion?” 

Last week we also had one of our discussion participants ask me about Social Entrepreneurship. I would like to share the part of my speech that touched on Social Entrepreneurship. Here it goes;

“Social Entrepreneurship has become very fashionable these days but do we all know what Social Entrepreneurship really is? Successful entrepreneurs like Bill Gates are heavily involved in the area of social entrepreneurship, either personally or in funding such enterprises. It is an increasingly growing field of entrepreneurship and it is best that we all have a good understand of what it is all about. I am therefore glad we are gathered here today to discuss this issue.

Let me share some developments in different sections of society around the world in response to this growing awareness and interest in the area of social entrepreneurship. First, new business opportunities have started emerging as a result of the greater focus on social entrepreneurship. The base of the pyramid (BOP) business model focuses on servicing the low-income populations in the developing and also in some developed countries. In government, new legislation and incentive schemes are being developed to support social issues this new area. In the area of finance, there is talk of social stock markets and socially responsible investing. In the area of philanthropy too we are seeing many rich people putting in effort and money in support of social entrepreneurship and therefore the emergence of organizations like the Ashoka and the Schwab foundation,

The Singapore Government has been highly supportive of social enterprises, offering various incentives to aspiring entrepreneurs with a social mission in mind, making Singapore one of the most conducive environments for social enterprises to grow.  Some of these Incentives include ComCare Enterprise Fund, the Youth Social Entrepreneurship Programme for Schools and the President’s Challenge Social Enterprise Award.

So back to the question – what is social entrepreneurship?  Let me start with the Wikipedia definition. It says;

“Social entrepreneurship means identifying or recognizing a social problem and using entrepreneurial principles to organize, create, and manage a social venture to achieve a desired social change.”

So while business entrepreneurs are focused on profits and growth of the business only, social entrepreneurs want to also achieve some social change for their effort.

Questions we should ask ourselves are;
1. Should profit orientation of a business and social objectives be done separately? I.e., let someone run a business for profit and some of the profit is ploughed into organizations run by different people that are just focused on social work – quite like what some large corporations do as part of the Corporate Social Responsibility or CSR objective.

2. Should entrepreneurship skills be used to run organizations that are first focused on social objectives and the profits generated are used to fund the social work done. That is, an all in one model. Quite like a restaurant that is run by special needs people, where productivity and profit is less important than generating the necessary profits to pay for everything.

I see these 2 examples as the 2 extreme ways of practicing social entrepreneurship…..”

The question is, which of the 2 examples do you define as Social Entrepreneurship? Number 1 or number 2? Or could there be a middle ground?

I would really be keen to hear what you have to say?

Inderjit

8 Comments

  1. LC Seet says:

    A very good point. Personally, it is my belief that social entrepreneurship should enable individuals or groups to uplift themselves through their own efforts with social entrepreneurs playing a facilitating or enabling role. Unless this happens it is nothing more than charity. In other words – it is not sufficient for a social entrepreneur to “give a fish” or to teach how to “catch a fish” but also to enable the fishes (hopefully, more than one) to be marketed and sold. Hence, I would go for Option 2.

  2. Varghese Philip says:

    I agree with Mr Seet. Option 1 may also describe NGOs, or Citizen Service Organizations (CSOs, as Ashoka calls them), where funding for an impactful business is not generated from the business activity itself, but from outside sources, mainly government funding and donations.

    Social enterprises develop and deploy business models that enables revenue generation from its impactful business activity, so that the different classes of people (customers, employees, stakeholders) benefit from the solution applied to solve a social problem.

    Your Option 2 addresses employees.

    The multi-tiered pricing model used by Narayana Hrudalaya so that affordable healthcare is available to the needy and is subsidized by the more affluent customers is a third model. This addresses customers, and provides for revenue generation from the primary business activity of the social enterprise.

    I’d like to go with the “socialism” model where the same service or product can be made available and affordable by differential pricing – affluent customers pay a premium for a service or product, and subidize the same or similar service of product for the folks who are needy. This model can be applied to food, healthcare, education and maybe even housing … the most important areas of social need.

  3. Sam says:

    A for profit business shouldn’t be expected to fully dedicate itself to social objectives to begin with. It contradicts the fundamentals of business, which is to make profit at all cost. For profit businesses the social entrepreneurship is just part of their business plan that make their business a whole and not a separate entity that’s truly designed to make social changes.

  4. gskalra says:

    I say, lets look at Social Entrepreneurship not as a tool of charity, but rather as a tool of empowerment.

    Give a man a fish and he will eat for a day, teach him to fish and he will eat for the rest of his life. In this case, we give them the access to the tools that they need to progress further with their work and lives. Give their children the access to reach further, by helping them to open up their world.

  5. Claire says:

    I believe social entrepreneurship empowers the little guys and I like the fact that the rich and the powerful are forced to participate in it. Whereas in the past the rich and the powerful would talk about social issues among themselves and make the big decisions on how they fit, now we have active and knowledgeable social entrepreneurs who speak for the little guys and the average person. Whether it’s for the fashion or the passion, I see this as a very positive thing.

  6. Andre says:

    As we learn more about the world both scientifically and culturally, I think the new generation of businessmen and women are thinking more responsibly about the impact of industries around the world. These new generation of businessmen are influencing the larger busineses to take more responsibilities and we’re seeing the sort of impact social entrepreneurship can have, especially when combined with the internet. This is a good thing and I think we should all be supportive of the idea.

  7. Jeff says:

    There’s a lot of money to be made in social entrepreneurship, so it is nothing like charity or donation based programs. It’s a fancy way of saying “My view of the world and how they should be fixed”, but use the word “social” to emphasize that it is for the people and “engineering” to emphasize building towards a goal scientifically. On the surface you might see an organization calling itself a social entrepreneurship firm, but beneath that name there can be several companies that are benefiting from the movement.

  8. Kevin says:

    Is Social Entrepreneurship Fashion or Passion? I think this is an excellent question, although I don’t think many will have the definite answer for it. Social entrepreneurship as a whole at the moment can’t be summarized as one definite thing, but I’m sure the social entrepreneurs themselves know exactly why they got involved in what they do. Whatever the case I’m a fan of social entrepreneurship and there’s no doubt it is a positive step forward to taking more responsibility as inhabitants of this planet.

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