What is the Appeal of Social Entrepreneurship?

“This generation of students is the first that was required or expected to do community service in high school and college. These students grew up expecting to integrate social impact into their work — no matter what sector they join.” - Dr. Nora Silver Director of the Center for Public and Nonprofit Leadership at UC Berkeley Haas School of Management

socialenterprise-connectIncreasing in popularity, social entrepreneurship gives action to a common desire of many individuals to make a difference or change the world. Many believe the Internet and mobile technology, which are strong catalysts for personal and social connection, have fueled these desires. Social entrepreneurship also offers more than just monetary returns or simply providing a salary. It allows the entrepreneur to create something beyond them and provide stability for communities into the future, especially when applied on the local level. Sustainable social change affects communities for generations to come. The popularity of the social enterprise business model has increased so dramatically in the business world that many MBA programs all over the globe have started to include elective classes focusing on the implementation of social ventures.

(for more information see the section How Do You Become a Social Entrepreneur?)

After the global financial crisis, “People were looking for a ‘new capitalism’ and found that social enterprise can provide a philanthropic and profitable model.” - Nick Badman Chairman of the Peter Cullum Centre for Entrepreneurship at Cass Business School in London

This trend – the hybridization of business and charity – is perhaps responding to a much broader economic trend of customization. Successful social ventures see small scale and intense customer focus as an opportunity. Products and distribution models are carefully designed and easily adapted to meet the specific needs of the community. Shoshana Zuboff, the Charles Edward Wilson Professor of Business Administration at the Harvard Business School, argued that a historic transition from mass consumption to individual wants was taking place forcing traditional capitalism to morph into what she called “distributed capitalism.” Michael Porter, also a Harvard Business School professor, suggests that capitalism has focused on the narrow equation of value leading to short-term economic returns and that is the reason for this shift. Porter uses the idea of “shared value” – generating economic value while at the same time creating value for society by addressing its needs and challenges, to describe the benefits of social enterprises.

socialenterprise-trustA poll conducted by GlobeScan in 2010 may be hinting at this transition suggested by Zuboff and Porter. The poll showed that barely half of Americans polled said they believed in the free-market system, a figure down from 80 percent in 2002. For 8 of the past 12 years, trust in business has been below 50 percent, according to the most recent Edelman Trust Barometer. More entrepreneurs seeking to generate revenue in pursuit of social goals are acting as catalysts in this transition from traditional capitalism to the distributed capitalism that Zuboff is describing. This blending of purpose with profit has even recently been formalized as US “Benefit Corporation” (B Corp), a corporate entity legally required to create benefit for society as well as its shareholders.

(See the example Better Books (B Corp) in the next section, A Brief History of Social Entrepreneurship)

Previous Chapter

Previous Chapter

What is Social Enterprise and Entrepreneurship?

Next Chapter

Next Chapter

A Brief History of Social Entrepreneurship