During the last 15 years we have seen an increasing interest in Social Entrepreneurship. The number of scholarly articles, books, formal and informal training is raising exponentially. All major business schools are paying more and more attention this this increasing phenomenon, but as it is still in its early stages it seems quite difficult to actually define what is Social Entrepreneurship and what is not.
As I continue studying the phenomenon of Social Entrepreneurship I plan to publish a number of blog post attempting to better define and describe it in as an initial step in order to later focus on creating a solid framework to support its development as a vector of social change.
I argue that Social Entrepreneurship is a fourth new sector which is different from the existing three sectors (Public, Private, and the so called Third Sector). The word entrepreneurship entails the creation of something new, which makes for the differentiation of the other three existing sectors. As Ashoka’s founder Bill Drayton said: “Social Entrepreneurs are not content to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry”. In this sense Social Entrepreneurs are first and foremost social change agents, therefore they cannot identify (Fredric Kropp)their sector with any of the existing three but squarely in the middle of them all.
But let’s analyze the reasons that are enabling the emergence of this fourth sector.
The third sector model (not-for-profit and NGOs) is reaching its limits as they face a highly competitive environment characterized by increasing needs in their target communities, and a generally tighter funding environment with growing competition for donors and grants (Science Direct). In this context Social Entrepreneurship has emerged as complex yet promising organizational form in which market based methods are used to address seemingly intractable social issues (Vanderbilt University).
Market trends show increasing pressure over for profit enterprises to embrace the triple bottom line (HBR). Human-capital-intensive companies face double pressure as they are increasingly unable to attract the talent they require unless they show they are both socially and environmentally responsible. This is particularly true among the younger generations (HBR). Based on these findings it can only expect this trend to become stronger making Social Ventures more appealing than regular Business Ventures.
Governments are increasingly reaching out to Social Entrepreneurs to find solutions to some of their most pressing problems. Just as an example Obama’s administration created in august 2010 the Social Innovation Fund to allocate 50 million USD annual investment to new ventures in healthcare as one of several efforts to promote new partnerships of government, private capital, social entrepreneurs and the public, pushed by the White House’s Office of Social Innovation and Civic Participation three days earlier David Cameron then UK Prime minister had said “open up public services to new providers like charities, social enterprises and private companies so we get more innovation, diversity and responsiveness to public need” and to “create communities with oomph” (The Economist).
As we can see the current realities these three well-established sectors: government (Public), for-profit (Private) and not-for-profit (Social) are somehow “validating” the emergence of his “new sector” of social entrepreneurship.
This site aims to build a framework to better support to Social Entrepreneurs whom are trying to tackle some of our most pressing social issues.
Mauro Locarnini