Social Entrepreneur Final

DRAFT Social entrepreneurs: understanding how a social entrepreneur has change the world

Introduction The idea of Social Entrepreneurship has become increasingly popular as social problems in our complex modern society have grown In a way, it is a reaction to the ‘bottom line’ philosophy of modern big business with its emphasis on short-term profit to the detriment of any long-term benefit to society as a whole or the human component of the business itself. Social Entrepreneurship seeks to harness the practical dynamism of the successful businessman to enrich and help society, especially in countries where the individual is beset with problems of dire poverty and lack of opportunity. While the concept of social entrepreneurship is relatively new, initiatives that employ entrepreneurial capacities to solve social problems are not. We have found a variety of initiatives —particularly focused on the problems of poor and marginalized populations—that have transformed the lives of thousands of people around the world (Alvord et al., 2003) Social entrepreneurs play an important role is societal development. In contrast to traditional “ business” entrepreneurs, they focus primarily on social value creation, namely, the alleviation of social problems such as poverty, hunger, illiteracy, environmental destruction, etc. (Mair and Noboa, 2005). In many ways social entrepreneurs are to the society what business entrepreneurs are to the economy, meaning that although they may, like business entrepreneurs, be interested in profit, but their emphasis is on social change. According to Dees (1998) the idea of “social entrepreneurship” has struck a responsive cord. It is a phrase well suited to our times. It combines the passion of a social mission with an image of 1

business-like discipline, innovation, and determination commonly associated with, for instance, the high-tech pioneers of Silicon Valley. The time is certainly ripe for entrepreneurial approaches to social problems. Many governmental and philanthropic efforts have fallen far short of our expectations. Major social sector institutions are often viewed as inefficient, ineffective, and unresponsive. Social entrepreneurs are needed to develop new models for a new century. In reflection, the terms social entrepreneur and social entrepreneurship were first used in the literature on social change in the 1960 and 1970s. It came into widespread use in the 1980s and 1990s, promoted by William Drayton the founder of Ashoka: Innovators for the Public, and others such as Charles Leadbeater (Wikipedia, 2009) Drayton, founder of the world’s first organization to promote social entrepreneurship, ‘Ashoka’, is credited with coining the phrase “Social Entrepreneur”, to describe a person who recognizes logjams in society and finds ways to free them. This type of person envisages a universal change, and figures out how to heave whole societies on to new, rewarding paths. This type of entrepreneur strains and shoves until the job is done, identifying and solving large-scale social problems. Only an entrepreneur has the vision and determination to complete the huge tasks involved, and social entrepreneurs are agents of fundamental change. Definition Whilst social entrepreneurship is attracting growing amounts of talent, money, and attention, it has become increasingly difficult to identify who is a social entrepreneur and what he/ she does, resulting in all sorts of activities are now being called social entrepreneurship. To this end there arises a need to clarify the definition of the term, in an effort to simplify the identification of a social entrepreneur Any definition of social entrepreneurship should reflect the need for a substitute for the market discipline that works for business entrepreneurs. We cannot assume that market discipline will automatically weed out social ventures that are not effectively and efficiently utilizing resources. (Dees, 1999) For Martin and Osberg (2007) the definition of the term “social entrepreneurship” must start with the word “entrepreneurship.” The word “social” simply modifies entrepreneurship. If entrepreneurship doesn’t have a clear meaning, then modifying it with social won’t accomplish 2

much, either. In the end they believe that the critical distinction between entrepreneurship and social entrepreneurship lies in the value proposition itself. For the entrepreneur, the value proposition anticipates and is organized to serve markets that can comfortably afford the new product or service, and is thus designed to create financial profit. From the outset, the expectation is that the entrepreneur and his or her investors will derive some personal financial gain. Profit is sine qua non, essential to any venture’s sustainability and the means to its ultimate end in the form of large-scale market adoption and ultimately a new equilibrium. The social entrepreneur, however, neither anticipates nor organizes to create substantial financial profit for his or her investors – philanthropic and government organizations for the most part – or for himself or herself. Instead, the social entrepreneur aims for value in the form of large-scale, transformational benefit that accrues either to a significant segment of society or to society at large. A broader definition of the term social entrepreneur is given by Wikipedia which defines social entrepreneurship as the work of a social entrepreneur. In this case a social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas business entrepreneurs typically measure performance in profit and return, social entrepreneurs assess their success in terms of the impact they have on society. While social entrepreneurs often work through nonprofits and citizen groups, many work in the private and governmental sectors. Social entrepreneurs are the persons, who aspire to change the world in positive directions. They have belief in their ability to make impact on the world / society by their sustained efforts in certain directions. They build institutions and organizations which espouse certain ideas and mission and try to create an impact on the world in certain positive directions. They establish self sustaining organizations and institutions which can enable us to represent our ideas in concrete shape and enable us to change the world. (Jain, 2008 ) According to Zeigler (2009) The social entrepreneurship support network, “Schwab” describes the social entrepreneur as a “pragmatic visionary who achieves large scale,

systemic and

sustainable social change through a new invention, a different approach, a more rigorous application of known technologies or strategies, or a combination of these”. 3

Characteristics The identification of social entrepreneurs is made simpler when there is a concise definition of the aforementioned term. To many authors social entrepreneurs can be identified through certain characteristics that they extol. In the book “The rise of the social entrepreneur” Leadbeater, 1997 characterized the social entrepreneur as being

entrepreneurial: they take under-utilized,

discarded resources and spot ways of using them to satisfy un-met needs; Innovative: they create new services and products, new ways of dealing with problems, often by bringing together approaches that have traditionally been kept separate and transformatory: they transform the institutions they are in charge of, taking moribund organizations and turning them into dynamic creative ones. Most importantly, they can transform the neighborhoods and communities they serve by opening up possibilities for self-development. Social entrepreneurs exhibit qualities and behaviors we usually associate with the business entrepreneur, but they start the entrepreneurial process by explicitly embracing social causes and places themselves where social, civic and community based gaps exist (Perrini, 2005). Fritz (2008) pointed out that David Borstein in his book “How to change the world: Social Entrepreneurs the power of new ideas”, enumerated some of the major characteristics of a social entrepreneur, to him, many people do not realize that they are entrepreneurs. They just know that they are obsessive about some social problem and determined to do something about it. How do we recognize such people? Borstein suggests that social entrepreneurs display the following characteristics: (1) They are willing to self-correct. Entrepreneurs are not starry-eyed idealists as you might think, but pragmatists who get the job done by focusing on the goal, not a particular approach. (2) They are willing to share credit. (3) Social entrepreneurs are willing to break free of established structures. (4) They are willing to cross disciplinary boundaries. Borstein says that social entrepreneurs serve as "social alchemists," gathering ideas, experience and resources from different fields resulting in configurations that are new and, many times, counterintuitive and (5) They have a strong ethical motivation. Unlike other entrepreneurs who seek to create market success, social entrepreneurs are driven by their ethical visions. 4

Other distinguishing characteristics of social entrepreneurs include: they are persons that are driven and determined, ambitious and charismatic. They excel at spotting un-met needs and mobilizing under-utilized resources to meet those needs (Leadbeater, 1997); and, they are people of integrity, that are genuinely interested in contributing to society (Villareal, 2004);

How Social Entrepreneurs Change the World In understanding how social entrepreneurs change the world it is invariably important to analyze the work that these individuals do and how it benefits society. Social entrepreneurs drive social innovation and transformation in various fields including education, health, environment and enterprise development. They pursue poverty alleviation goals with entrepreneurial zeal, business methods and the courage to innovate and overcome traditional practices. Nagler (2007) considered the social entrepreneurial sector to be increasingly important for economic (and social) development because it creates social and economic values. He identified three major ways in which social entrepreneurs benefit society. 1. Employment Development The first major economic value that social entrepreneurship creates is the most obvious one because it is shared with entrepreneurs and businesses alike: job and employment creation. Estimates ranges from one to seven percent of people employed in the social entrepreneurship sector. Secondly, social enterprises provide employment opportunities and job training to segments of society at an employment disadvantage (long-term unemployed, disabled, homeless, at-risk youth and gender-discriminated women). 2. Innovation / New Goods and Services Social enterprises develop and apply innovation important to social and economic development and develop new goods and services. Issues addressed include some of the biggest societal problems such as HIV, mental ill-health, illiteracy, crime and drug abuse which, importantly, is confronted in innovative ways. 5

3. Social Capital Next to economic capital one of the most important values created by social entrepreneurship is social capital (usually understood as “the resources which are linked to possession of a durable network of ... relationships of mutual acquaintance and recognition".

Case study: Emmaus and Plan Puebla Emmaus The Emmaus Movement was born in November 1949 after WWII where many French families did not have any form of housing. It was founded by L `Abee Pierre, a former resistance fighter, who at the time served as a member of parliament. In 1952 Abbé Pierre founded Emmaus choosing the name because he loved the story of Jesus meeting the disciples on the road to Emmaus and giving hope and purpose to their lives. Abbé Pierre’s vision had been to create a community, which provided a person with a home rather than a temporary living space. Although he came from a wealthy family he soon ran out of money but used the idea of recycling clothes and old furniture as a way of raising funds. This led to distinctive features of the Emmaus Communities – the provision of work to the people within it to enable them to come off state benefits and support themselves. Now 306 member groups finance the daily work activities of Emmaus International. This movement is international and secular. They operate in 36 countries, and are organized into 4 regions (Africa, America, Asia, and Europe). The movement does not appeal to subventions; each community has a high degree of autonomy. These communities themselves manage their operation and their revenues. The association provides them legal support and important media coverage. All groups Emmaüs World contributes to the financing of solidarity in Africa, Latin America, Asia and Europe. They are designed to make stronger the capacity of groups to work and develop 6

their social actions carried out locally for the poor. The aim is to strengthen the capacity of its members

to

work

and

develop

actions

for

the

disadvantaged.

Plan Puebla Plan Puebla was initiated in Mexico in 1966 by a small group of agricultural researchers who recognized that Mexican agricultural research did not address the needs of small subsistence farmers. The initiative sought to improve maize production techniques and transfer this new technology to small subsistence farmers, in hopes of improving the general welfare of rural farm families. The project gained momentum with support from the newly established International Maize and Wheat Improvement Center. After 10 years, private funding of the initiative ended, and the Mexican government took over the project. The model has been replicated in Colombia, Peru, Honduras, and other areas in Mexico. The project has enabled the creation of the Cholollan Regional Cooperative—a credit union founded in 1993 by former Plan Puebla staff—and the Center of Rural Development Studies in Puebla. •

Essential Innovation: Improves crop production by focusing on small, farmer-oriented cooperatives and providing support activities, rather than simply improving agricultural technology

•

Scope: Increased maize production by 62% among 47,000 Mexican farmers in the Plan Puebla region. Educated poor, small subsistence farmers about income diversification and facilitated a 252% increase in family income.

The Bottom Line Whilst Emmaus and Plan Puebla and are just two examples, they clearly show some of the benefits these individuals gives to society and how they have indeed help to change the world For example, the income strategy of Emmaus is tied directly to their mission: They either employ people who are developmentally disabled, chronically mentally ill, physically challenged, 7

poverty stricken or otherwise disadvantaged; or they sell mission-driven products and services that have a direct impact on a specific social issue. Social entrepreneurship is an essential tool for job creation. They are able harnessing the energy of local communities and to help generate significant job opportunities. This can clearly be seen in the case of Emmaus. Recently in London the Prime Minister called upon social enterprises to create about 15, 000 new jobs (ICG, 2009). Similarly they play the role of change agents in the social sector, by sustaining social value, recognizing and relentlessly pursuing new opportunities to serve their mission, acting boldly without being limited by resources currently in hand, and exhibiting heightened accountability to the constituencies served and for the outcomes created. Emmaus was effectively able to tackle to problem of poverty and homelessness, empowering beneficiaries to feel that they were making a vital contribution to their own wellbeing. In Mexico, Plan Puebla was able to create economic transformation in rural Mexico, through new innovations, which included create new maize technology, expand coverage via government service and providing support functions as needed, they were able to help Mexican farmers increase their income. Motivated by altruism and a profound desire to promote the growth of equitable civil societies, Abbé Pierre and Plan Puebla was able to change the performance capacity of society and pioneer innovative, effective, and sustainable approaches to meet the needs of the marginalized, the disadvantaged, and the disenfranchised. Social entrepreneurs has also help change or shape governmental policy to tackling certain social issue, for example, Nagler (2007) gave the case of the Brazilian social entrepreneur Veronica Khosa, who developed a home-based care model for AIDS patients which later changed government health policy.

Conclusion Social entrepreneurs play an important role in transforming society. Their ability to create social and economic value is indispensable in the development process. Their contribution to the

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alleviation of some of societies more pressing problems have been recognized and every day more emphasis is placed on the creation of social enterprises.

References •

Alvord, S.H., Brown, L. D. & Letts, C. W. (2003). Social Entrepreneurs: Leadership that facilitates societal transformation – an exploratory case study.

Harvard

University. 25 pgs •

Dees, J. G. (1998). The meaning of social entrepreneurship. Kauffman Center for Entrepreneurial Leadership Ewing Marion Kauffman Foundation. 6 pgs

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Fritz, J. (2008). Are you a social entrepreneur? Characteristics of social entrepreneurs. http://nonprofit.about.com/od/nonprofitmanagement/fr/spotsocialentre.htm

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Institute for Career Guidance (2009). Social enterprise to be part of £1bn job creation drive. http://www.icg-uk.org/article575.html

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Jain, T. K., 2008. Who is a social entrepreneur? Afterschool Centre for Social Entrepreneurship.

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Leadbeater, C. 1997. The rise of the social entrepreneur. Demos. 87 pgs

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Mair, J. & Noboa, E. (2005). How intentions to create a social venture are formed: A case study. Working Paper No. 593. IESE Business School. University of Navarra. 29 pgs

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Martin, O. & Osberg, S. (2007). Social Entrepreneurship: The case for definition. Sanford Social Innovation Review. Sanford Graduate School of Business. 39 pgs

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Morris,

M.

(2002).

What

is

social

entrepreneurship?

http://www.essortment.com/family/socialentrepren_svia.htm 9

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Nagler, J. (2007). The importance of social entrepreneurship for economic development policies. University of New South Wales, Sydney. 10 pgs

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Perrini, F (2005). The new social entrepreneurship: What awaits social entrepreneurial ventures? Edward Elgar Publishing. 341 pgs

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Villareal, J. G. (2004). Emprende de manera social. Entrepreneur Magazine.

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Wikipedia

(2009)

Social

Entrepreneur.

http://en.wikipedia.org/wiki/Social_entrepreneurship •

Zeigler, R. (2009). An introduction to social entrepreneurship. Voices, Preconditions, Contexts. Edward Elgar Publishing.

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