Creating the Solution: Social Entrepreneurship
It’s easy to look at some of the most difficult global problems and have a defeatist attitude. You might look at the doomsday clock, which is currently 100 seconds to midnight, and feel hopeless. How are we supposed to mobilize entire populations to solve world issues like poverty, global warming, illiteracy, and inequality? One answer is to create the solution through social entrepreneurship.
What is Social Entrepreneurship?
The emergent entrepreneurial field has been mainstreamed and is now used in everyday rhetoric. However, this ease with using the term has clouded the definitive line of what social entrepreneurship is and what is it not.
Social entrepreneurship in its simplest form is the use of smart business practices to create solutions for global problems. Based on the Global Entrepreneurship Monitor, two essential things are required for an activity to be classified as social entrepreneurship.
First, it must be driven by social value creation as opposed to value capture. This means a venture’s ultimate bottom-line is to contribute to the social good instead of reaping short-term financial benefits. This guideline excludes operations such as corporate responsibility programs and traditional entrepreneurship from social entrepreneurship.
Secondly, the venture must be market-based rather than non-market based. Meaning, it needs to compete in the for-profit sector instead of the public sector. This aspect excludes volunteering, nonprofit work, and government legislation from social entrepreneurship.
Some hallmark social entrepreneurial ventures are TOMS shoes, Grameen Bank, and GoldieBlox. All three function in the for-profit space and are mission-centric. Now that we have the definition of social entrepreneurship down, it’s worth questioning if this good-natured approach is successful in cut-throat business.
Does Doing Good Mean You’ll Do Well?
There is a fork in the road. You either take the path of personal success or choose to do good. Either become a shark in business or step to the sideline and find more cause-worthy work. However, what if there is a third option? To do both good for the world while doing well in business.
Social entrepreneurship is that third lane, and multiple cases have proven its success. Take, for example, sustainable investing. This combination of traditional investment uses environmental, social, and governance or ESG, insights to make accordingly informed decisions. ESG funds outperformed counterparts by 70% during the turbulent first four months of 2020. By these numbers, doing good meant doing well in the stock market.
From a business perspective, the founder of Grameen Bank, Muhammad Yunus, won the Nobel Peace Prize in 2006 for his success. He gave microloans to the people of Bangladesh and was able to lift ten million people out of poverty between 1990 and 2008. His net worth is over $10 million dollars.
So, instead of viewing your career as one of two paths forward– success or social good– consider social entrepreneurship as it can provide you both.
Study Social Entrepreneurship
By now, you should have a firm grasp of the topic and its benefits. If you think it’s for you, the next step forward is to develop business expertise. Having a keen sense of opportunities and understanding how economic principles can be ideated around is one half of the puzzle for a social entrepreneur.
This means you’ll need to immerse yourself in business environments. Whether it’s attending business school or working at a startup, it’s important to develop that perspective before you take on a venture of your own. The second piece of the puzzle is passion.
You need to have the heart and commitment to your cause. If things get tough, you can’t jump ship and act in your company’s financial interest. You need to remain steadfast in your social mission.
The world needs social entrepreneurs. With pressing climate change, growing distrust in democracy, rising nuclear threats, and a host of other existential problems, it’s up to innovators to focus on solving problems that make the world a better place.
I’m a content writer working with Great Business Schools a site that aims to give business students a portal that tells them everything they need to know before they commit to a business education.