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Room for Thought

Room for Thought is a casual space for Empower Fellows and interested commenters to opine on issues within the field of social entrepreneurship, and to further debate towards a better understanding of the role of the social entrepreneur in society.

Round II: Are there different “definitions” or forms of social entrepreneurship in different countries?

Patric Gibbons

Ok, so while I believe the definition of social entrepreneurship stays the same no matter where you go I really think the form can change from country to country. This is essentially because to me, every country has different needs. For example, in countries like Guatemala, where I have worked, there is a huge need for clean water. In other countries, malnourishment is a big problem, and in other countries maybe both malnourishment and lack of access to water is a problem. Some countries may have warfare and conflict further exacerbating their problems or may be far behind in recognizing women’s rights, which poses greater challenges for us as social entrepreneurs. Culture can also have a huge influence on our form too. How will the people we work with accept our values? What is their view of us? Do they trust us? Therefore, the form of our SE can vary greatly depending on the needs and cultural differences of the populations that we are trying to help.

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Lucia Smith

I think social entrepreneurship can manifest itself differently depending on the circumstances in which it is enacted. Cultural traditions and policies inherently shape the willingness and ability of a venture to successfully take root and propagate. Just as the needs and demands (and the ability to supply those needs and demands) change depending on the environmental context, societal views on how these products and practices should be implemented greatly shape how these ventures come into play. A system that works well in one context may not be appropriate in another; for example, how might Islamic restrictions on money-lending affect finance programs and training? Such factors must be taken into consideration when considering the development of a particular type of social entrepreneurship.

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Meagan Maher – Collaborative Transitions Africa, Uganda

This question is difficult since I don’t know very much about definitions of social entrepreneurship in different countries.  The definition varies so much in the United States alone, so it seems reasonable to believe that it varies abroad as well.  It’s also likely that the term “social entrepreneurship” isn’t in popular use in some other countries.  The NGO I worked with in Uganda over the summer didn’t have a definition of social entrepreneurship, even though its activities were, by an average definition, related to social entrepreneurship.  If I asked them what social entrepreneurship was, I’m not even sure they would have an answer (I’m emailing them about it now).  I think that many times individuals or groups will set out on projects to improve a community without taking the time to define what they’re doing or put it into a category.  So people are often social entrepreneurs without being conscious of it.  Perhaps these people could fit into one category of SE, but it makes more sense to me to put different forms of SE into categories by the nature of the activity, not by where the activity takes place.

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Chrissy Goldbaum – Foundation for Sustainable Development, Cochambamba, Bolivia

While the nature of a social entrepreneur’s or NGO’s work will vary depending on the country in which they are working, I believe that the tenets of entrepreneurial or development work remain the same. For example, the issue of an outsider gaining locals’ trust and ensuring community financial buy-in and participation in project idea creation and maturation (this could be an entire discussion in itself!) are issues that any entrepreneur will encounter in any given part of the world. However, given the differing social/economic/political needs and individual and institutional assets in different regions, the type of project one develops will change in order to meet the needs of those who they are working with and to utilize the local skills available effectively.

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Erica Goldstein – Physicians for Human Rights, Cambridge, MA

Many people do not know what social enterprise means. Therefore, social enterprise is defined across countries by the social entrepreneurs themselves. I think that social enterprise is pretty much defined as the same thing, but the limit and focus of social enterprise in each country is going to vary. For example, looking at the Schwab Fellowships this summer, I found that each country had a certain “niche.” For example, there is a big focus on microfinancing in India.

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Cody Valdes – Sisi ni Amani, Nairobi, Kenya

We would like to think that we can adjudicate between what is good for society (which is the centerpiece of social entrepreneurship business models) and what is merely wanted by society (what is generally pursued by regular old businesses). By placing the moral luminance of the first above the second – a judgment that Social Entrepreneurs freely make for themselves – we clearly are not moral utilitarians. In other words, we ascribe higher value to outcomes x, y, z (such as the reduction of poverty, or the creation of jobs for women) above outcomes a, b, and c (such as the enjoyment of an iPad, or a nice cigarette). As Social Entrepreneurs, we take liberty in making these judgments. But should we allow somebody like the billionaire Bill Gates into our club? Did he not single-handedly take the world into the 21st century? What about his competitor, the late Steve Jobs, whose company was a design-based refinement of the basic computer components? Did he do anything except make us happier with our toys? Did he add productively to society on the scale that Gates did, or reduce poverty on the way Gates did? It is difficult to understand where the continuum of business crosses over from social entrepreneurship on the one end to greed-driven profit maximizing on the other – where we might discover the bankers and traders who secured their year-end bonuses by selling stock options of questionable quality.

But American thinkers on business and management during the post-WWII years never drew a bright and sharp line between social enterprises and businesses-as-usual. The men who towered over the field of corporate, management, and business theory in the 20th century, such as the late William Drucker, held the following maxims: 1) That corporations are organs of society, and so are inherently value-producing, or else the body society will eject them. Interestingly, these were not the words of an apologist for cigarette corporations; he was delivering a warning to corporations who thought they might run roughshod over their community or customer in order to maximize their profit; 2) Profit is never the goal of a company; it is merely the means by which a company sustains itself, so that it can produce its benefit for society. Marks & Spencer began in the late 1800s with the mission of reducing the visibility of class divisions in the UK by providing low- and medium-income people with affordable, high-quality clothing and goods. Consequently, the argument goes, they continue to thrive today. Sears began in America in the early 1900s in order to service disconnected rural farmers and provide their clothing, materials, and other needs. They found a number of people who weren’t being adequately serviced in society and set out to fix that; the motive was neither profit nor the creation of jobs at Sears’ headquarters. Profit must be secondary to the mission’s execution.

Is this how it works today? We see in the unabashed proclamations that “greed is good” that America’s corporate culture took a wildly inappropriate swing in the late 20th century. CEOs and middle managers genuinely began to believe that the profit motive ought to be their calling card, that their guiding mantra would indeed be “greed is good.” American companies who once listened to men like Drucker (these consultants and writers were mostly men) incorporated the philosophies of social enterprises; nowadays, many or most do not. One might say that in light of Occupy Wall Street, in a small way, corporate America’s chickens are coming home to roost.

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Room for Thought is a casual space for Empower Fellows and interested commenters to opine on issues within the field of social entrepreneurship, and to further debate towards a better understanding of the role of the social entrepreneur in society.

Round I: What is Social Entrepreneurship?

Cody Valdes – Sisi ni Amani

Social entrepreneurship is endemic in informal contexts. Little of the economic movement that occurs in a slum, or a market, is superfluous economic activity. There are no Botox screening centres, no retailers of brand-inflated handbags, and no professionals in the business of interior designing to speak of. These sub-zones of society should not be understood as poverty-driven caricatures of asceticism. Nevertheless, they are economies that have the endemic characteristic of producing value, from the Nairobi “Mamas” cooking the beans that feed young male day-labourers, to the self-taught carpenters and metal welders that weld desks and chairs for classrooms. Innovation in informal contexts is thus propelled by the necessities of building a society and the many means of addressing them; and yet, the imaginative capacity of informal contexts is limited by available tools, norms, and modes of thinking that circulate within an economy. As an outsider, the bar is thus raised to a height that must, by all moral and purposive demands, exceed the creativity of informality’s existing entrepreneurship. One must approach old problems in informal contexts not by displacing existing transactions with new ones that are merely better funded and compellingly foreign, but by bringing new ideas and tools to bear upon old problems, leveraging technological fluencies and the fresh creativity of outside perspective, to engender social innovations.

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Anne Wolfe – Fundación Paraguaya

Social entrepreneurship, for Fundación Paraguaya, was about being at the front of their field, about constantly innovating. They spoke of constant monitoring and evaluation, which was designed to provide them with data to identify problem areas and improve their program. However, when put into action, there seemed to be a lack of understanding about what areas of their program they should be monitoring and evaluating. They focused mostly on quantitative data, such as increase in income, rather than asking the women, staff and other clients what they thought of the program. Social entrepreneurship is not standing still, it is about constantly striving to move forward, to find new links between social and economic goals, to look for ways to merge business and social improvement. Basically, it’s trying to find the middle ground between financial profit and social benefit.

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Manas Baba – BUILD India

In general, I define social entrepreneurship to be a business or venture aiming to enact social change and measuring its success by the social value generated. For BUILD’s income generation project in Thottiyapatti, we were aiming to introduce a supplemental, secure source of income in a place accustomed to unstable daily-wage agricultural labor. It’s hard to tell if the goal or measurement of this project qualifies for social entrepreneurship. I tend to think that it doesn’t: in the end, the goal is for Thottiyapattians to have more money. Ideally, this money would be used for reinvestment into the community and bettering health and education for families, but we can’t dictate how people will spend this money. But in the end, if people severely lacked access to income opportunities, does the mere fact of having it qualify as social value in itself?

An additional complication in this project is defining BUILD’s role and Thottiapatti’s role. In some ways, BUILD could be considered social entrepreneurs in trying to tackle this income issue and create economic empowerment. However, in the end, we want the business to belong entirely to Thottiyapatti, with us out of the picture. We envision them managing a business just like any other person would: does their rural background turn this seemingly non-social objective into a social one because of economic empowerment?

A final complication for me in understanding social entrepreneurship comes from the different organizations we met over the summer. Take SELCO for example: they are a self-proclaimed social enterprise whose mission is to enhance livelihoods through sustainable energy solutions. Their model is for-profit and involves providing villagers a service. On the other hand, BUILD’s gains are not-for-profit and are derived from experiential learning, and instead of Thottiyapatti being a customer, we want them to be the producer of some sort of good or service.

Overall, I think the core of my struggle in defining social entrepreneurship lies with understanding what “social” exactly is and how the roles of the actors involved shape this definition.

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Allie Wollum – BUILD India

Right now we are in the process of defining what social entrepreneurship means to BUILD: India in the context of Thottiapatti. We felt tension between the goals of income generation and addressing a social problem. We have begun to realize that within social enterprise is room for both. By looking at both of these issues as intertwined, we begin to see where social entrepreneurship differs from strictly business entrepreneurship.  As a concept, social entrepreneurship is a way to innovatively look at social issues and find new ways to solve them. For us, looking at the gendered structure of social life in Thottiyapatti has highlighted the need to look at issues in a new way; the need for supplemental income in a way that empowers women to think about their role in the larger social and political context.

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Meagan Maher – Collaborative Transitions Africa

I had an internship, but they didn’t have a definition for social entrepreneurship.  I worked with two different organizations.  The one the initiated the peace messages/multimedia project had a philosophy of finding out from the communities what they needed, including them in the brainstorming process, and then working together on the final project.  The organization that I was working with in the field had other projects going on as well and their overall philosophy was to work with the youth on initiatives that would improve economies on the local level, improve “sovereign efficiency”, and bring peace.  I don’t know if any of this is really helpful with a definition of social entrepreneurship, so I’ll take a stab at it myself.

To me, social entrepreneurship is any activity or business that initiates something new in order to work towards solving some problem; the end goal should be improving the world in a creative and effective way.

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Erica Goldstein – Physicians for Human Rights

The philosophy at Physicans for Human Rights is to stop mass atrocities using the authority of health professionals. Social entrepreneurship is innovative in nature, approaching social problems using a business model.

I would not consider corporate responsibility and social entrepreneurship equivalent; however, businesses can be social enterprises if social or environmental responsibility is included in the mission statement.

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Marla Spivack – Innovations for Poverty Action

The NGO I was working for did not define themselves as a social enterprise, but over the course of the summer I came to see a variety of ways in which they were a social enterprise.  IPA is a research NGO, they conduct randomized controlled trials of development programs.  In my empower application I wrote about how the specific research project I was working on, which was investigating youth financial literacy education and group savings accounts, was related to social entrepreneurship because it could inform financial access projects.  After working on the project for several weeks it felt as if I was doing much more computer coding, data management, and people management than research or development work.  I asked my supervisor, a young Middleberry Alumn who had also studied Economic Development in college how he felt about the work we were doing, and if he felt like we were contributing to development in Uganda. I was frustrated by the lack of impact I felt our project was having on beneficiaries.  The most immediate beneficiaries, he explained, were our employees not our research participants.  The data we were collecting would eventually turn into one or more papers about financial access and would join a larger body of research which might eventually affect funding and policy choices in the financial access sector. Our employees, on the other had were educated Ugandans whom we were providing with decent, meaningful jobs through which they were gaining transferable skills in a growing industry in Uganda. Good enumerators in our organization had room for upward mobility, becoming auditors, team leaders, and eventually field mangers, with increasing salaries and in the case of field managers benefits packages.  We trained them in new computer skills teaching them new excel shortcuts and how to code in STATA. This type of personel development may eventually decrease opportunities for ex-pat workers, especially at the intern level, in the organization. I do not think that our hiring or training practices means that IPA is a social enterprise, but I think this highlights the ways in which any NGO or private company can have a positive social impact not only through fulfilling its mission, but also through the way it operates, and the way it trains and empowers its local staff.