Over the past two years I have noticed that the term “social entrepreneurship” is used with increasing frequency. There are wide diverse number of competitions a social entrepreneur can participate in to access seed money, mentorship, and coaching. Some of the top-ranked business schools have departments dedicated to social entrepreneurship. This is a growing field. So, what is social entrepreneurship? Why is there such a buzz about this in the business community?
In Social Entrepreneurship: What Everyone Needs to Know, David Borstein and Susan Davis states the most widely cited definition of social entrepreneurship is offered by Greg Dees, a professor at Duke University’s Fuqua School of Business and considered the father of social entrepreneurship education. Dees define social entrepreneurs as someone that improve the productive capacity of society and provide the “creative destruction” that propels social change. They create “new combinations of people and resources that significantly improve society’s capacity to address problems… creating public value, pursue new opportunities, innovate and adapt, act boldly, leverage resources they don’t control, and exhibit a strong sense of accountability”. In essence, a social entrepreneur is someone who wants to solve problems in society in an innovative way. They are similar to business entrepreneurs because they observe society, action-oriented, and likes to build. Both types of entrepreneurs have high-risk tolerance. However, the key difference between the two types is their objective: a business entrepreneur is focused on profit maximization, whereas a social entrepreneur wants to maximize social impact.
In How to Change the World, David Bornstein identified six characteristics that every social entrepreneur must have. They must be willing to self-correct, share credit, work quietly. They must be prepared to break free of established structures and cross disciplinary boundaries. They must have strong ethical impetus. Quiet an high expectation for any one person with a touch of humility. Bill Drayton (founder of Ashoka), and Muhamamad Yunus (founder of Grameen Bank) are two well recognized pioneers in this emerging field. Drayton founded Ashoka with the mission to connect social entrepreneurs to resources that will enable them to solve social problems. Yunus founded Grameen Bank (village bank) in Bangladesh to alleviate poverty and empower women. Drayton and Yunus are just two of the many faces plugging away to resolve the social problems in modern society.
Although this is a new field, the role social entrepreneurs play is as old as civilization. Prior to late 1900’s, social entrepreneurs had many names: visionaries, humanitarians, philanthropist, reformers, saints, scientist, or a great LEADER. The new name to this list is the direct cause of industrialization and urbanization. As the concentration of human population shift from rural to urban areas, there is a greater disparity between rich and poor people within society. Government agencies and businesses cannot keep up with all of the changes. A third section, not-for-profit, emerged to fill the void, but has reached its capacity to effectively address the social problems evolving with rapid urbanization and resource depletion. Social entrepreneurs are individuals that are trying to bridge the gap between businesses and nonprofit sector.
Currently, the definition of social entrepreneurship is blurred. Most social entrepreneurs are at the edge of creation and destruction. I really like how Bill Strickland framed social entrepreneurs in Sara Terry’s article “Genius at Work”:
“Artists are by nature entrepreneurs, they’re just not called that.They have the ability to visualize something that doesn’t exist, to look at a canvas and see a painting. Entrepreneurs do that. That’s what makes them different from businesspeople. Businesspeople are essentially administrators. Entrepreneurs are by definition visionaries. Entrepreneurs and artists are interchangeable in many ways. The hip companies know that.”