SOCIAL ENTREPRENEURSHIP: WHAT IT IS AND HOW IT IS DIFFERENT FROM CLASSIC ENTREPRENEURSHIP

ARUNAVA

“Social Entrepreneurship” is a term almost everyone has seen or heard recently. We learn of individuals constantly being recognised as social entrepreneurs because of one or the other contributions they’ve made for the welfare of society. But the question here is whether we know what social entrepreneurship is; because anyone who has done a little research into the same knows that it lacks a clear, consistent definition. And because of the lack of definition, theoretically, there is a lack of in-depth research. In this article, I will not define social entrepreneurship, but instead summarise the concept for us and elaborate its differences with classic entrepreneurship, for ease of understanding of all the members of our club. Note that classic entrepreneurship refers to entrepreneurship in general, and is used only in this article as a means of differentiating it from social entrepreneurship to avoid confusion.

Let us begin by understanding the definition for classic entrepreneurship and its effects on society. Entrepreneurship, in the business management literature, is defined as the exceptional set of activities carried out by a set of exceptional people to maximise profit. “Exceptional” here doesn’t mean “gifted”, but unique with very singular and honed skills that are developed by the process of entrepreneurship itself. Some of the conventionally recognised skills required are innovation, risk taking, dedication, organisation, strategy making, opportunities’ awareness and leadership. Coming to the effects of entrepreneurship on society, one may find:

1. Lower unemployment
2. Increased frequency of innovation
3. Accelerated changes in economic structure,

as a few well understood implications of the same.

Coming to social entrepreneurship, which is relatively a much, much newer concept albeit very similar in basic; we have the idea of profit in question here. Social entrepreneurship is ‘understood’ as a form of entrepreneurship that is mission oriented while ‘not necessarily’ profit oriented. To this, the Skoll Centre for Social Entrepreneurship says that the definition of social entrepreneurship should not extend to philanthropists, activists or similar socially responsible organisations, because while the characteristics are similar, they are not necessarily entrepreneurs at the same time. So, we’ve established social entrepreneurship as an independent business theory. But that is not enough. We’re still lacking concrete differences between classic and social entrepreneurship. For this, we look into the profit-mission orientation structure.

1. Profit orientation: When an entrepreneur invests his/her ideas and resources largely for profit.
2. Mission orientation: When an entrepreneur invests his/her ideas and resources largely for improvements in a community/communities.
3. Hybrid orientation: When an entrepreneur invests his/her ideas and resources for both profit and improvements in a community/communities.

All three types of entrepreneurs exist. However, Profit oriented entrepreneurs are categorised most recently as classic entrepreneurs, while hybrid and mission oriented entrepreneurs fall under the category of social entrepreneurs. This implies that the number of up and coming entrepreneurs are largely social entrepreneurs, and that is true; and which is why entrepreneurship is such a big deal recently. Now, for a better understanding of social entrepreneurship, let us look at sustainability.

Classic entrepreneurs are ideally sustainable companies. However, that can’t be said for social entrepreneurs. Mission oriented entrepreneurship, by definition, means minimal profit, if any. This implies that it is dependent on its target for sustenance. That is not a bad thing, but more a question of implementation. If your idea sits well with your mission and you are satisfied with it, there is nothing wrong with it. Now, let’s look at hybrid entrepreneurship; where profit and mission are adjusted well in. Most people would find this a comfortable middle ground for whatever ideas they have. Well, that is a matter of perspective really, because one form of entrepreneurship isn’t better than other, but more a question of what you want. Hybrid entrepreneurships are self-sufficient, which means they are neither dependent, nor are they max-profit.

Social entrepreneurship has gained great popularity, as we all know. But its lack of theoretical consistency has in turn created a lack of research, resulting in a lack of understanding it as a new business discipline. Conclusively, I’d like to say that social entrepreneurship is a platform that enables innovation in a world that needs it. If you have an idea, do not hesitate to learn more about entrepreneurship and try your idea out.