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Are you a social entrepreneur?
In my inaugural article, I focused on exposing another breed of entrepreneurs called social entrepreneurs.
As a society, we have and continue to place emphasis on commercial entrepreneurship that possesses the capabilities to innovate and grow and known to contribute to job creation and consequently economic development.
However, for our country to improve the quality of life for citizens, we need entrepreneurs who can focus on the needs of those at the “base of the pyramid,” targeting the underserved or marginalised groups where government programmes cannot reach and where traditional private sector firms are not interested in serving. These entrepreneurs are called “social entrepreneurs.”
What distinguishes a commercial entrepreneur from a social entrepreneur?
I suggest that this breed of entrepreneurs differs from commercial entrepreneurs in three typologies: motivation; value proposition and socioeconomic transformation.
The first typology looks at the “motivation” perspective for social entrepreneurship.
The Stanford Social Innovation Review in 2008 defined social as the value of the product, service, good, process is titled toward the benefits the public or society as a whole—rather than private value —gains for entrepreneurs, investors and ordinary consumers. A key differentiator between business and social entrepreneurs is therefore motivation with the former focused on money while the latter on altruism.
Social entrepreneurs are therefore persons who possess qualities and behaviours of business entrepreneurs but whose focus is on caring and helping society rather than maximising profits. The differentiator is that the aim of the social entrepreneur is to create social value instead of personal or shareholder wealth. Social entrepreneurs focus on social mission and therefore perceives and assesses opportunities differently from corporate entrepreneurs.
The second typology relates to the value proposition of social entrepreneurship. Researchers, Martin and Osberg pointed out while most theories distinguished entrepreneurs from social entrepreneurs by profit maximisation, a critical differentiator is that entrepreneurs create value for an assumed market that would buy the product or service whereas social entrepreneurs’ value proposition is aimed at creating a better quality of life for the underprivileged and neglected.
The value proposition therefore serves as another critical differentiator between business and social entrepreneurs. It is expected that business entrepreneurs would maximise the profits of its shareholders.
The social entrepreneur’s value is to improve or transform an underserved, neglected or highly disadvantaged population that lacks the means to create a better quality of life for themselves or their families.
This does not mean that social entrepreneurs shun the profit-making value proposition.
Ventures created by social entrepreneurs can certainly generate income, and they can be organised as either not-for-profits or for-profits.
What distinguishes social entrepreneurship is the primacy of social benefit, what Duke University Professor Greg Dees in his seminal work cited on the field characterises as the pursuit of “mission-related impact” as cited in the Stanford Social Innovation Review, 2007.
The third typology relates social entrepreneurship with socio-economic transformation. For social entrepreneurs to be truly socially innovative it is not enough for them to simply address a social need.
Being socially innovative requires the individual or organisation to identify a previously un-addressed social issue.
This could be the development of a new green technology, the support of a disadvantaged group of people who are not currently being supported or even creating a more productive or efficient method for dealing with a current social need. However, this approach must provide something new.
Once a social need has been discovered the organisation must then be able to exploit this need in a sustainable way. The organisation must be able to identify a sustainable business model which enables them to meet this need in a financially viable way.
Lastly, for social entrepreneurial organisations to be truly innovative they need to generate disequilibria within their market.
Disequilibria refers to an organisation creating disruption and imbalance within their industry in a way that forces the market to replicate and follow in their foot-steps.
The common theme across the typologies in conceptualizing social entrepreneurship revolves around the motivation to fulfil the value proposition of improving or transforming an underserved, neglected or highly disadvantaged population that lacks the means to create a better quality of life for themselves or their families.
Having put forward three key differences between commercial and social entrepreneurs, I ask this question: are you a social entrepreneur in T&T?
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