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Social Entrepreneurship

What is social entrepreneurship?

Quite simply, social entrepreneurship describes the field of individuals, businesses, and nonprofit organizations who solve social problems with market-driven, business approaches. This could range from development of a new product like an affordable solar light to creating a new sales outlet for small producers to receive a fair portion of income, such as fair trade coffee companies. There are many terms used to describe the various entities in the field, such as “social businesses” – like green energy companies or microcredit institutions – as well as “social entrepreneurs”, who are the individuals who envision and found these enterprises. Above all, social entrepreneurship describes the method used to address the problems, with a particular focus on sustainable, long-term solutions, and the target of change, which is often marginalized and poor populations both domestically and internationally. Social enterprises are generally not entirely business nor entirely social, but rather a fusion of the two. Unlike traditional nonprofit organizations that invest all revenue back into the organization, social enterprises may be profitable and also achieve social outcomes along the way.

Who are social entrepreneurs?

As with business entrepreneurs and start-up organizations, social entrepreneurs are characterized by creative thinking, innovation, and utilization of systems approaches to solve often complicated problems and create sustainable solutions. Social entrepreneurs challenge the status quo, recognizing that traditional approaches to addressing social problems may not be the most effective. One of the most widely cited social entrepreneurs is Muhammad Yunus, 2006 Noble Laureate and Founder of the Grameen Bank, the microfinance organization and community development bank that paved the way for the larger microfinance field, which provides banking services to individuals who may be too poor or too remote to access commercial banks1. Other well-known social entrepreneurs include:

  • Bill Drayton, founder of Ashoka, an organization that supports, mentors and connects promising social entrepreneurs across the globe.
  • Blake Mycoskie, founder of TOMS, a shoe company that donates one pair of shoes for every pair sold.
  • Malala Yousafzai and Shiza Shahid, co-founders of the Malala Fund, an organization that advocates and invests in local leaders and organizations that enable girls to complete 12 years of education.

What’s next for social entrepreneurship?

Social entrepreneurship is a trendy topic, attracting attention and funding from the prominent Skoll Foundation and Schwab Foundation, amongst others. As the field grows in popularity and credibility, it has professionalized in many ways. Ashoka, a pioneer in identifying and cultivating social entrepreneurs, suggests that “social entrepreneurship” has reached a “tipping point”, becoming not only mainstream but attracting investors in social change through innovation2.

Recognizing the high potential of the field, innovation competitions and impact investment have grown in prominence. For example, the Forbes’ Under 30 Change the World Competition competes six promising entrepreneurs to win several awards totaling $1 million to fund their innovation . In 2015, a half-million dollar award went to Kiah Williams, co-founder of SIRUM, an organization that connects unused medications to patients in need. In 2016, awards went to Opus 12, a company with technology that converts CO2 to cost-competitive chemicals and fuels, and Pillar Technologies, an enterprise that prevents damages at construction sites by using predictive analysis and sensors4.

However, as the field of social entrepreneurship has grown, it also faces risks. The pool of “social entrepreneurs” now often includes anyone or any organization doing social good. Casting such a wide net risks oversimplifying the field, its ability to respond collectively to critics, and its ability to identify and implement best practices5. A challenge and opportunity for the next generation of social entrepreneurs will be to not only define the boundaries of the field, but also to identify overlap with the social and for-profit sectors, to capitalize on learning and innovation that already exists and propel it to the social entrepreneur’s cause.

Interested in gaining knowledge on social entrepreneurship and international development? Learn more from the online Master of Arts in International Development at Saint Mary's University of Minnesota. 

About the Author

Jill LaLonde is an instructor at Saint Mary's University of Minnesota and the Executive Director of OneVillage Partners, a Minnesota-based international NGO that facilitates community-led development projects in Sierra Leone. Jill has more than 10 years of experience in the international development and nonprofit sectors, ranging from Gates-funded public health research in Northern Uganda to managing multi-million dollar USAID-funded projects across Africa, Asia and the Middle East at Land O’Lakes International Development. Jill holds a BA in Psychology from the University of Minnesota and an MSc in Development Studies from the London School of Economics.

References:

1Noble Prize.org. (2006). Muhammad Yunus Biographical. https://www.nobelprize.org/nobel_prizes/peace/laureates/2006/yunus-bio.html (accessed October 7, 2016).

2Ashoka. (2016). Social Entrepreneurship: Building the Field. https://www.ashoka.org/en/focus/social-entrepreneurship (accessed September 17, 2016)

3Forbes. (October 2015). Meet the Six Social Entrepreneurs Competing to Change the World and Win $1 Million. http://www.forbes.com/sites/michelatindera/2015/10/01/under-30-summit-15meet-the-six-social-entrepreneurs-competing-to-change-the-world-and-win-1-million/#610f92f4163b (accessed September 17, 2016)

4Forbes. (October 2016). Opus 12 and Pillar Technologies Win Forbes Under 30 Summit Change the World For Profit Competition. http://www.forbes.com/sites/forbespr/2016/10/17/opus-12-and-pillar-technologies-win-forbes-under-30-summit-change-the-world-for-profit-competition/#178d8be657c5 (accessed October 18, 2016)

5Martin, Roger L. and Osberg, S. (Spring 2007). Social Entrepreneurship: The Case for Definition. http://ssir.org/articles/entry/social_entrepreneurship_the_case_for_definition (accessed September 17, 2016)