Social Entrepreneurship
“Social entrepreneurship is the attempt to draw upon business techniques to find solutions to social problems. This concept may be applied to a variety of organizations with different sizes, aims, and beliefs” (Wikipedia, 2015). Social entrepreneurs act as the change leaders to improve the system for providing a better society (Ashoka, 2015).
Article: TWO KEYS TO SUSTAINABLE SOCIAL ENTERPRISE. Harvard Business Review.
Social entrepreneurship has been in discussion over the past decades as it tries to bring in social and economical changes. This very recent article by Roger Martin and Sally Osberg from the Harvard Business Review, discusses the two factors that most social entrepreneurs use to change the existing system; the economical actors and using new technology advances. The goal of the social entrepreneurs it to change the socio-economic equilibrium to transform the lives of a specific group of people (Martin, R.L.,& Osberg,S.R. 2015).
(1) The Actors:
The problem that social entrepreneurs try to solve is to balance the power between the economical actors . These actors can be individuals, a company, the government and even the whole system. The social entrepreneurs define two types of actors that are added to the existing system required to transform the equilibrium. The customers that help shift the power balance and the government that is responsible for changing the economics.
• Customers and power
The authors offer an example of India’s handmade rug industry where children were sold to business owners by labor brokers, where they were forced to work over 12 hours a day in terrible conditions to make hand made rugs. Kailash Satyarhti, a children’s rights activist discovered that only way to stop the terrible practices of child labor was to educate the buyers of how these products were made. Most people would refuse to buy these rugs knowing that they were made by children in poor working conditions. As a result of this, Mr. Sathyarthi started theGoodWave International that certifies these products to make sure they are not made using child labour around Asian countries.
• The Government and economics
Social entrepreneurship uses government for more effective means like allocating citizens taxes for better use and making government services more valuable.
(2) Changes in Technology:
Second way of changing the system is to keep the same actors but substantially change the technologies used. This change is achieved in 3 ways:
Replace a key technology with a lower-cost one – For instance, in the U.S, the Health Leads trains college students to assist with non medical social support services to the poor that lack basic needs of food and shelter from using public health clinics and emergency. As a result it reduces the health costs for the government.
Create a new enabling technology – Garmeen Bank allowed small lenders to lend to the poor in developing countries, and at the same time developed a profitable business model
Repurpose an existing enabling technology – For instance, Imazon used technology advancement to repurpose with the use of Google Maps to build new roads through the rain forests in the Amazon basin.
Changes in technology can allow businesses, government and society as whole to improve its practices that can benefit both the unprivileged and the actors in the system. Leaders like Kailash Satyarhti, have improved child labor practices and gave new avenues for a new venture that benefits both the needy and businesses.
MARTIN, R. L., & OSBERG, S. R. (2015). TWO KEYS TO SUSTAINABLE SOCIAL ENTERPRISE. Harvard Business Review, 93(5), 86-94.
http://web.b.ebscohost.com.libezproxy.nait.ca/ehost/detail/detail?vid=3&sid=5d18f049-baf5-4b89-945f-263c2a720110%40sessionmgr113&hid=116&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#db=bth&AN=102262156
Video: Michael Porter: Why Businesses can be good at solving problems?
Ted speaker, Michael Porter a Harvard Business School Professor claims that the system we have developed today to reduce social problems with NGO’s is not enough to solve the problems. He refers to the concept of “scale”, addressing that we don’t have enough resources to make a change. According to Porter, only businesses can make resources by generating profits and incomes, and therefore change their business models to solve social problems. Traditionally, businesses were known to create social problem, but Porter says, “there is a fundamental opportunity for business today to impact and address these social problems”. Nowadays, businesses do not take social responsibility as a single part of the business model but try to combine the business model with a social issue. He refers to this as the concept of shared value, which is incorporating social and economical value into the business model. We can evidence this today, the social issues like safe environment and pollution reduction have allowed businesses to generate profits through alternative products and services.Finally, Porter suggest business, NGOs and governments to partner up with each other to solve social issues and make a change.
Questions:
1. Can you think of any social entrepreneurs that have made changes to the system with changes in the actors or technology?
2. Is there a socio-economic issue that you would like to change as a social entrepreneur? How would you use the actors or technology to make that change?
3. According to the Ted speaker Michael Porter, businesses have changed from traditional processes of seeing social issues as a small part of their business model into combing a business model with social issues to make profits. Can you think of a business that has been successful at implementing this practice?
4. Do you agree with Porter that we can not solve social issues at a larger scale without the resources from businesses?
5. Porter speaks about creating shared value which a combination of social and economical value. How do the four pillars of a business change for an enterprise that has a shared value business model? HR, Finance, Marketing, Management.
References:
Ashoka (2015). Ashoka Innovators for the Public: What is a social entrepreneur: Retrieved from
https://www.ashoka.org/social_entrepreneur
Martin, R. L., & Osberg, S. R. (2015). TWO KEYS TO SUSTAINABLE SOCIAL ENTERPRISE. Harvard Business Review, 93(5), 86-94.
Wikipedia (2015): Social Entrepreneurship. Retrieved from
https://en.wikipedia.org/wiki/Social_entrepreneurship
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