Social entrepreneurship is an entrepreneurial approach that focuses on social value creation and societal change. Social entrepreneurs are creative and visionary individuals who use business models and structures to address a wide range of issues. Typically, they aim to create a sustainable business that helps economically disadvantaged segments of the population. This often involves a hybrid of government intervention and market-based strategies.
Social entrepreneurship is a new field, and its scope is expanding. Many organizations are becoming more aware of its value. As a result, the industry is attracting more and more money, talent, and attention. Although it is still a young field, many examples have been documented.
A classic example of a social entrepreneur is Muhammad Yunus, the founder of the Grameen Bank. Yunus’s initial experiment with microcredit in Bangladesh grew into a movement that has helped millions of people in rural communities access small loans. His subsequent work led him to receive the Nobel Peace Prize. Using a combination of social entrepreneurship and activism, Yunus amplified the impact of his original innovation. The Grameen model has been embraced by other countries.
Another prominent example is Warby Parker. In 2012, the company launched its Buy a Pair, Give a Pair program, which gave away free pairs of glasses to those in need. It also provided free eye exams and vision screenings to local governments. After several years, the organization transitioned into a for-profit venture, but continues to work to make a positive impact on the world.
Other examples include the Bill & Melinda Gates Foundation, which strives to address major global social problems, and Ashoka, a nonprofit organization that supports local social entrepreneurs. Global social entrepreneurship has emerged in recent decades. These organizations link a large number of organizations, and sometimes span continents.
Unlike the conventional entrepreneur, a social entrepreneur works to disrupt the systemic inequality of a society. They aim to re-evaluate the status quo and add new actors to it. By creating a new equilibrium, they alleviate suffering and release trapped potential. To do so, they are often forced to abide by standards. While this may seem to be a good thing, it can also be a source of confusion and ambiguity.
Unlike social service ventures, which are focused on a limited population and have a modest impact, a social enterprise aims to change a large segment of a society. They are mission-driven and are often exemplary in execution.
A key difference between a for-profit social enterprise and a social service venture is that for-profit enterprises are often driven by a desire to profit. Nonprofit organizations, on the other hand, are often funded by donations or grants.
For-profits usually have a greater scope and more resources to invest, but they can be less effective. The reluctance of investors to invest in risky ventures is a major hurdle for entrepreneurs who focus on making social impacts.
Despite their challenges, social entrepreneurs are proving to be increasingly successful. Social enterprises can help to create a competitive advantage by identifying opportunities that would not otherwise be profitable. Because of their focus on social problems, they are often able to address problems that are too narrow for private capital to pursue. However, they are also vulnerable to failure.