What is the definition of social entrepreneurship? What are its guiding principles? What future awaits social entrepreneurs?
Definition of social entrepreneurship
The definition of social entrepreneurship has been in constant evolution since it first appeared in the 1990s. As for today, it is seen as doing business for a social cause by putting the general interest of society on top of economic performance. In this way, in social entrepreneurship, profit is no longer the ultimate goal of business but a means to achieve broader goals connected to improving society and the environment.
Most often formed as social purpose corporations, low profit limited liability companies, cooperatives, or benefits corporations, all these legal types of businesses are the privileged actors of the social and solidarity economy. By nature, social enterprises are managed following the principles of corporate social responsibility (CSR) and Sustainable Development.
The people running these social businesses are called social entrepreneurs. And as we’ve been discussing, their measure of success isn’t about profit. Instead, they feel successful when their business has somehow improved the world.
The four pillars of social enterprises
Social entrepreneurship has similarities and differences when compared to the standard definition of entrepreneurship. In this way, it consists of four key ideas:
The economic viability of the project
Like any sustainable business activity, social entrepreneurship projects must meet a real demand previously identified in a market study. It needs to be profitable enough to create wealth and jobs.
Social and/or environmental objectives
Social or environmental goals are key to these types of project as they create the “social value” and the purpose of the business for both the team and the community. These objectives mostly focused on improving the world, can be of different natures: from the access to health services and energy savings to reducing unemployment or encouraging local food consumption.
Profit distribution
Depending on the legal status of the company, profits can be reinvested primarily for the optimal achievement of social and environmental objectives. Individual profits are formally limited and rigorously supervised.
Governance
“Participation” is the key word of governance in social entrepreneurship. Here, as the collective interests always outcomes individual interests, decision-making is always a shared process. This means all stakeholders are involved: from managers and staff to customers/users, local or even the national political power…
Social entrepreneurship, a sector of the future?
Often dependent on public fundings, social enterprises are highly subject to political changes. Ultimately, the sustainability of these businesses is essentially based on the ability to correctly balance the social/environmental desired outcomes with a positive economic performance.
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