Business Magazine

Social Entrepreneurship: Between Business and Activism

Posted on the 14 November 2012 by Center For International Private Enterprise

Social Entrepreneurship: Between Business and Activism

Riders for Health (Photo: ICCLab)

Throughout history, activists and thinkers have approached social problems and important causes with new ideas and ways of doing things. In the mid-1800’s, Florence Nightingale founded modern nursing and made unprecedented steps to improve hospital conditions.  1951, activist Vinoba Bhave — a follower of Mahatma Ghandi — attempted a massive land reform effort in India, progressing India’s national dialog about land reform and social equality. It was not until the last two decades, however, that a term emerged for this kind of innovator: we know them today as social entrepreneurs.

Social entrepreneurs are unique from their traditional counterparts because their goal is not just to make a profit, but also to address a pressing social issue through innovative, sustainable approaches and solutions. As PBS puts it, “The job of a social entrepreneur is to recognize when a part of society is stuck and to provide new ways to get it unstuck.”

Not all activists, or those that believe passionately in a cause, are social entrepreneurs. Just as they are unique from traditional entrepreneurs, social entrepreneurs are different from traditional activists. Instead of focusing on advocacy or awareness, social entrepreneurs provide sustainable solutions to real issues. As a post on Wamda.com — a site for “inspiring, empowering, and connecting entrepreneurs” — points out, “an activist might only become a social entrepreneur if he or she further develops his or her activism into a sustainable solution that will allow them to address the issues at hand.” 

Defining social entrepreneurship in the context of both entrepreneurship and activism highlights social entrepreneurs as at the intersection of creative energy and passion for a cause. Social entrepreneurs are those that learn from the Mark Zuckerbergs of the world as well as the Susan B. Anthonys and Wael Ghonims, providing creative and competitive solutions to critical social concerns.

One of the most exciting aspects of social entrepreneurship is the space it has created for addressing serious issues in countries where the government may not have the capacity or ability to do so. But even in countries that do have strong political and economic institutions, with financial crises and economic downturn facing many donors and governments, traditional approaches to charity and social work are drying up. By using a private sector approach and innovative market-based solutions, social entrepreneurship provides new ways of doing things whether at for-profit companies, nonprofits and NGOs, or even by using existing resources more efficiently in government.

In the Philippines, for example, social enterprises — for-profit organizations that strive to add social, environmental, and/or economic value to society — are increasingly becoming an alternative to government’s efforts to address social concerns. For example, a group frustrated with a lack of jobs available to disabled people created the Foundation for These-Abled Persons Inc. (FTI). FTI trains persons with disabilities (PWDs) to build appropriate school chairs, wheel chairs, and other materials for students with disabilities. FTI works not only to better the experience for disabled students at public schools, but also provides employment for PWDs.

In Hong Kong, according to social entrepreneur Leng Wong, the quality of care at elderly care facilities dropped and they become more expensive throughout the 1990’s because government subsidies to elderly care gradually ceased. As a result, senior citizens were often placed in homes that could not adequately address their needs. To tackle this problem, Mr. Wong and his co-founder Jeff Ng set up Home of the Elderly.  The organization matches senior citizens with elderly care facilities based on the citizen’s needs, charging the nursing home and not the senior citizen or their family and donating one-third of their profits back to their charitable foundation to promote seniors’ needs.

A similar story can be told by Riders for Health, a non-profit which works to improve health conditions in sub-Saharan Africa by teaching motorcycle skills to people, allowing workers and patients in rural areas greater access to health facilities. Or by Ashoka fellows like Juan Carlos Aguilar Macizo, who is developing a waste management system in Peru that is more cost effective and efficient than traditional water and waste systems.

These examples serve to represent the breadth of issues social entrepreneurship can address. For some industries or government services, however, social entrepreneurship may not be a viable model. Building and maintaining roads, for instance, is more of a straightforward responsibility of a government than something that could significantly benefit from private sector creativity. But given the right social entrepreneur, even road maintenance could be up for some cause-driven, innovative competition.

While navigating the world between activist and entrepreneur, or profit and non-profit, can be difficult — especially in terms of finding funding — social entrepreneurs have only skimmed the surface in the potential value that their innovative energy and passion for making the world a better place can add to society.


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