Social Entrepreneurship: Addressing Inequality and Externalities

Development of Social Entrepreneurialism

The old parable — give a man a fish and you feed him for a day, but teach a man to fish and you feed him for life — captures the animating spirit behind social entrepreneurship. This analysis begins by providing a brief history and a working definition of social entrepreneurialism. It also discusses related movements working toward similar goals from different directions, addressing various challenges in society and the environment. A more detailed overview of the specific challenges that social entrepreneurialism can address — including environmental problems and social issues such as inequality — is then outlined. Finally, the concepts developed in the paper are applied to a specific social problem to illustrate how a social entrepreneur might work to solve it.

Social entrepreneurship was introduced in the 1970s to address the issue of social sustainability. The term "social entrepreneur" was first mentioned in 1972 by Joseph Banks in his seminal work The Sociology of Social Movements, where he used it to describe the need to apply managerial skills to address social problems as well as business challenges (El Ebrashi, 2013). The concept of social entrepreneurship evolved as part of the broader entrepreneurship literature, despite the fact that most of that literature focused on the creation of new ventures to produce profits. However, forming new ventures within the social entrepreneurship framework was not oriented toward profit-making. Instead, it replaced the notion of individual value creation — the creation of wealth — with a more holistic concept of value creation that included a broader set of stakeholders, such as those at the community level and community development goals.

Multiple scholars and institutions have proposed definitions of the social entrepreneur. The table below summarizes several key perspectives:

Bornstein (1998) described a social entrepreneur as "a path breaker with a powerful new idea who combines visionary and real-world problem-solving creativity, has a strong ethical fiber, and is totally possessed by his or her vision for change" — emphasizing mission leadership and persistence. Thompson et al. (2000) defined social entrepreneurs as people who identify unmet needs that the state welfare system cannot or will not meet and who gather the resources necessary to "make a difference," stressing their role as emotionally engaged social value creators. Dees (1998) characterized them as change agents who adopt a mission to create and sustain social value, relentlessly pursue new opportunities, engage in continuous innovation, act boldly without being limited by available resources, and maintain a heightened sense of accountability to the constituencies they serve. Brinckerhoff (2009) offered a simpler formulation: a social entrepreneur is someone who takes reasonable risk on behalf of the people their organization serves. Leadbeater (1997) highlighted their role as leaders, storytellers, people managers, visionary opportunists, and alliance builders who organize ventures to make social change. Zahra et al. (2008) defined social entrepreneurship as encompassing activities and processes undertaken to discover, define, and exploit opportunities to enhance social wealth by creating new ventures or managing existing organizations in an innovative manner. Finally, Ashoka (2012) described social entrepreneurs as individuals with innovative solutions to society's most pressing social problems who are both visionaries and ultimate realists, concerned above all with the practical implementation of their vision (Abu-Saifan, 2012).

Entrepreneurship has also been described as the process by which an entrepreneur discovers a fit between certain needs and resources, establishes an innovative venture, works on the venture's growth, pursues further opportunities to continuously innovate, and produces sensible outcomes (El Ebrashi, 2013). The outcomes of social entrepreneurship differ from those of traditional entrepreneurship, and the measurement of those outcomes also differs. Social entrepreneurs are known to focus on market failures — a function that resembles that of traditional entrepreneurs — but these market failures are not only related to price disequilibria or the inability of some people to access certain products or services. Rather, they address issues related to externalities, public goods, and distributional equity (El Ebrashi, 2013).

These concepts began to receive institutional support in the 1980s with the establishment of Ashoka, the first organization in the world dedicated to supporting social entrepreneurs. Ashoka is now the largest network of social entrepreneurs worldwide, with nearly 3,000 Ashoka Fellows in 70 countries putting their system-changing ideas into practice on a global scale (Ashoka, n.d.). Its mission is "to support social entrepreneurs who are leading and collaborating with changemakers, in a team of teams model that addresses the fluidity of a rapidly evolving society. Ashoka believes that anyone can learn and apply the critical skills of empathy, teamwork, leadership, and changemaking to be successful in the modern world" (Ashoka, n.d.). Ashoka has been one of the pioneers in developing the social entrepreneur concept and creating a network to support these entrepreneurs.

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