According to Wikipedia, social entrepreneurship (SE) involves the recognition, evaluation, and exploitation of opportunities that result in social value, the basic and long-standing needs of society, as opposed to personal or shareholder wealth. Therefore, social entrepreneurs are individuals with innovative solutions to social problems. A social entrepreneur focuses on creating capital, which includes fu­lfillment of basic and long-sta­nding needs such as providing food, water, shelter, education and medical services.

According to Guy Larry Osborne, faculty, Carson-Newman College, social entrepreneurs may start their own enterprises or reform existing organisatio­ns. According to Osborne, what social entrepreneurs have in common is commitment and understanding of social change.

In regards to social change, social entrepreneurs have hel­p­ed the poor by teaching them to help themselves. Also, these entrepreneurs have questioned the conditions and systems that maintain the discrepancies in wealth and opportunity for poo­r. SE is an emerging field that combines knowledge and skills from many disciplines. Altho­ugh the te­rm is relatively new, social en­trepreneurs can be fo­und thro­ughout history. Floren­ce Nigh­tingale (founder of the first nu­rsing school and developer of modern nursing practices), Robert Owen (founder of the cooperative movement), and Vinoba Bhave (founder of India’s Land Gift Movement). David Bornstein, the author of How to Change the World: Social Entrepreneurs and the Po­wer of New Ideas, says, “So­cial entrepreneurs ide­ntify reso­urc­es where people only see pr­oblems. They view the villagers as the solution, not the passive beneficiary.”

In the status quo, a number of groups and organisations ha­ve recognised socially oriented ventures. For example, the Fast Company magazine, recently recognised Better World Books, an organisation that addresses the literacy problem by helping fund community reading programmes through sales of donated books. As another example, the Manhattan Institute Award for Social Entrepreneurship honours leaders develop solutions for pressing social pr­oblems. According to S Trevis Certo, faculty, Texas A&M University, the Manhattan Institute recognised the Houston-based Pr­ison Entrepreneurship Programme for its work providing prisoners with the skills needed to start new ventures.

Today’s social entrepreneurs have come to include the most successful business entrepreneurs as well. Bill Gates, the founder of Microsoft, is a leading example. In a recent speech at the World Economic Forum in Switzerland, Gates championed a new form of capitalism: “Such a system would have a twin mission: making profits and also improving lives for those who don’t fully benefit from market forces.”

However, unlike business entrepreneurship where there is a drive for resource mobilisation, social entrepreneurs may face difficulties in mobilising financial resources for their noble causes. Starting a new social venture requires identifying fu­nding sources that are primarily interested in creating social value. Fortunately, a recent trend toward venture capital funding of social ventures has transfo­rmed social entrepreneurship.

Is social entrepreneurship really different from business entrepreneurship? Despite the differences between social and commercial entrepreneurship, some scholars claim that there exists a continuum for which commercial and social entrepreneurship serve as two end anchors. Therefore, organisati­ons can pursue commercial entrepreneurship, social entrepreneurship, or some combination of both. In fact, some scholars even refer to organisations that pursue both commercial and social objectives as “hybrids.” In a sense, these hybrids pursue two bottom lines, one of which deals with profits while the other deals with social value.

However, not all scholars agree with the notion that a person or organisation can pursue two bottom lines and be considered social entrepreneurs. For example, some firms engage in cause-related marketing as a mechanism to increase sales, profits, and shareholder wealth. Therefore, it is difficult to argue that employing such tactics for a profitable objective indicates that one is a social entrepreneur. The most provocative and striking element of social entrepreneurship has been its ability to combine elements of the business and volunteer sectors. Future research that clearly defines the characteristics of social entrepreneurs will help SE achieve its greatest potential.

(By Varun Dutt, PhD, Carnegie Mellon University, Pittsburgh, PA. Also, Knowledge Editor, Financial Chronicle, New Delhi.)