What Is Social Entrepreneurship?
Social entrepreneurship is a concept that enables the construction of businesses whose greatest impact is improvements in society .
In other words, these companies exist mainly to promote solutions that generate changes in the reality of vulnerable people and/or communities.
They can do this by offering training , employment , health treatment opportunities, acting in the preservation of the environment , among other fronts.
Faced with this explanation, you must be wondering what is the difference between these initiatives and the work of third sector organizations.
Although they fight for common causes, social entrepreneurship does not only depend on donations to survive.
Part or all of its revenues come from products and services , just like any other business.
However, this model does not have profit as its central objective, but the added value to a society.
While the “ordinary” entrepreneur creates a business to make a profit, meeting a market demand, the social entrepreneur takes an initiative to solve a problem, to meet a social need, usually perceived in his locality, in the community where he lives and or works.
Over time, such an initiative can become a business, which does not exclude making a profit, but this is more a consequence than a first intention.
It is also important to differentiate social entrepreneurship from social responsibility actions , which are spearheaded by companies.
These campaigns usually benefit communities in a punctual way, for example, delivering basic food baskets at Christmas time.
However, they do not necessarily support deeper transformations that are able to change the condition of these individuals, providing support for them to have their own income.
Social entrepreneurship, on the other hand, exists precisely to promote these changes, being carried out in a continuous and well-structured way.
Finally, it is important to emphasize the local character of social entrepreneurship. It is common for the story of a social entrepreneur’s initiative to be linked to a problem that a person/group saw in their communities. And, from there, seek a solution that benefits everyone.
The problem may even be present in other places and, thus, the solution is “scalable”. But the beginning is almost always local.
What Is It To Be A Social Entrepreneur?
To be a social entrepreneur is to be at the forefront of an entrepreneurial initiative that adds social value .
In practice, it means using the characteristics and tools of entrepreneurship to make a business with socio-environmental impact viable.
Here’s what Klaus Schwab, founder of the Schwab Foundation – an organization that supports innovative models in this field – says:
“Social entrepreneurs are pioneering more sustainable and inclusive approaches to business models. These people have proven how employees, customers, suppliers, the community and the environment can all benefit when all stakeholders are involved in creating socio-economic value.”
In this sense, the foundation cites strategies employed by this leader :
- Proposal for creating useful ideas to solve social problems, combining innovative practices and knowledge , producing new procedures and services
- Creation of partnerships and forms/means of self-sustainability of projects
- Transformation of communities thanks to associations and strategic partnerships
- Using market-based approaches to solve social problems
- Identification of new markets and opportunities to finance a social mission.
What Is The Role Of Social Entrepreneurship?
Social entrepreneurship emerged to meet needs that are not covered by the State, meeting, in particular, the demands of vulnerable populations .
Since then, companies have started to pay more attention to their role in society , implementing social responsibility activities.
In this scenario, entrepreneurship also emerged, which corresponds to a new way of thinking about the management of companies , increasing their flexibility and competitiveness in the market.
It didn’t take long for these concepts to mix, using the entrepreneurial capacity to solve one of the main problems of NGOs and other entities focused only on the social field: raising financial resources .
Although, in the country, there are several options to capture the values necessary for these institutions to work, they are limited by bureaucracy and difficulties, for example, to bring the actions to the attention of potential collaborators.
Considering the context of entrepreneurship, which is born to propose different solutions to old questions, it made perfect sense to use this reasoning to solve the financial demand.
Instead of focusing efforts on sensitizing communities and raising funds from governments and incentive funds, social entrepreneurs forged their own source of income.
In this way, they combined commercial items and assistance to the population, with the objective of forming self- sustainable businesses .
Of course, it can be interesting to raise funds from other funds on some occasions, such as in the expansion of the initiative or during large campaigns, but it is possible to survive in a less dependent way on donations.
It is perfectly possible to scale in social entrepreneurship and is even desirable, since solutions and initiatives that are successful in one community can be adopted in other locations, greatly enhancing their benefits.
One of the paths for this scale is networking, something that is still little practiced in organized civil society, since CSOs often operate in isolation, when they could greatly benefit – and benefit their public – by working together with their organizations. sister organizations.
Another way to scale successful initiatives is through corporate social responsibility strategies.
When a company takes an initiative or a project that it supports in one community and takes it to be replicated in another, it is expanding the range of its social actions. This benefits other locations, with the advantage of offering something that has already been tried and proven successful.
These two paths, networking and corporate social responsibility strategies, have enormous potential to amplify the effects of local social initiatives.
In addition to benefiting people in vulnerable situations, projects that focus on the social mission contribute to the satisfaction and personal fulfillment of managers and employees.
This is because her work aligns her career and life purpose, adding a noble meaning to her professional activities.
What Is The Importance And Impact For Society?
Social entrepreneurs have made a difference in the lives of communities around the world.
Its projects take food, better living conditions , professionalization, information and culture, contributing to social well-being and preservation of natural ecosystems.
In the current Information Age, these actions stand out for uniting innovation, digital transformation and generating value for society, surpassing purely profit-oriented objectives.
Today we can see two movements. The first is that we already have entrepreneurs who start a business with a social purpose, without necessarily going through the stage of a non-profit initiative. This type of social business tends to grow significantly.
In parallel, we see civil society organizations, CSOs, seeking to expand their means of sustainability, creating or expanding the offer of products and services.
This trend also tends to strengthen, since it is very difficult to sustain an organization solely on the basis of donations.
Although donations will increase significantly, it is very difficult to meet the maintenance needs of this entire contingent.
As you can imagine, it is difficult to measure the effects of each project, especially those that operate locally, but there are estimates.
One of the most recent was disclosed in a report by the UOL portal, showing that the actions impacted 622 million individuals in the last two decades.
This data appears in a report by the Schwab Foundation, released during the World Economic Forum, in Davos, Switzerland, held between January 21 and 24, 2020.
As we explained above, the foundation supports the work of social entrepreneurs, who are located in 190 nations.
The projects led to the distribution of US$6.7 billion among vulnerable communities.
They also achieved important achievements in favor of the environment, such as the reduction of CO2 emissions – and, consequently, a reduction in the greenhouse effect and global warming -, preventing 192 million tons of this gas from reaching the atmosphere.
Practical Actions Of Social Entrepreneurship
To understand and create practical actions in this field, it is worth remembering that they must meet the demands in a continuous and sustainable way.
Therefore, they imply investing time, planning and structuring the offer of services and products, so that the activity does not only meet a specific need.
And to deliver value, it is important to create indicators that help to understand the evolution and effectiveness of your initiative.
Faced with a community without access to potable water, for example, the social entrepreneur must find answers that go beyond the purchase of this item to supply for a month.
It is necessary to offer opportunities to reverse this situation, reusing water or guaranteeing the supply of this region without great costs for citizens.
Therefore, there is the maxim that teaching to fish is better than simply giving the fish, because, when empowered , communities work to leave the situation of vulnerability.
Basic sanitation and handicrafts are some of the segments traditionally benefited by social businesses, but not the only ones.
According to the report presented by the Schwab Foundation, the sectors that most count on the support of social entrepreneurs on the planet are:
- ecological solutions
- Economic activities
- job creation
- access to energy
- financial inclusion
- right to land
- Social inclusion
Environmental issues also stand out, especially because our nation has an abundance of natural resources, such as the Amazon rainforest .
In addition to the specific flora and fauna, the Amazon is recognized as the “lungs of the world”, due to its essential role in preserving a healthy atmosphere for living beings.
What Are The Characteristics Of A Social Entrepreneur?
A social entrepreneur must combine different knowledge, skills, competences and attitudes , uniting an entrepreneurial spirit with solidarity.
We can define knowledge as knowledge that can be acquired through external sources , be it classes, books and podcasts .
In the world of work, it usually refers to technical or formal education, but also to information related to people management .
To be at the forefront of a social enterprise, it is useful to learn to:
- Identify and seize business or partnership opportunities
- Manage people and companies
- Apply originally business solutions to solve social problems.
These are qualities that make a person capable of carrying out practical activities successfully.
Developing skills is important, as it is useless to obtain knowledge without knowing how to use it in the day-to-day business.
The essential skills for an entrepreneurial profile focused on social causes are:
- have clear vision
- take initiative
- be balanced
- be participatory
- Know how to work in a team
- know how to negotiate
- Knowing how to think and act strategically
- Be perceptive and attentive to details
- be agile
- Be creative
- be critical
- be flexible
- be skillful
- Keep focus
- be innovative
- be smart
- Be objective.
It is important to emphasize that the social entrepreneur, like other entrepreneurs, needs to have vision. Seeing a solution where there is a problem and other people have not been able to act is a critical skill.
They are postures that express the purpose, beliefs and personal attributes.
To undertake, it is necessary to have a proactive, dynamic and innovative behavior, combined with a passion for the social field.
It is the attitude that will boost the business, providing motivation and charisma to the entrepreneur.
He should invest, in particular, in the following postures:
- Being dissatisfied and indignant in the face of injustices and inequalities
- act with determination
- have engagement
- Be committed and loyal to your mission
- be ethical
- Act with professionalism and transparency
- Have passion for what you do.
They result from a mixture of knowledge, skills and attitudes , which can describe both technical (hard skills) and behavioral ( soft skills ) qualities.
The fundamental competences for the social entrepreneur to perform well are:
- sense of responsibility
- sense of solidarity
- Sensitivity to social issues
- Know how to use latent forces and regenerate little used forces
- Knowing how to take calculated risks
- Motivate and integrate various actors around the same goals
- Knowing how to interact with different segments and interests of various sectors of society
- Know how to improvise.
Persistence is critical for a social entrepreneur, as their purpose can encounter many barriers. Being resilient and being able to pick yourself up after a few setbacks is necessary and, in the end, rewarding.
What Are The Differences Between Business Entrepreneurship And Social Entrepreneurship?
As we mentioned in the previous topics, social entrepreneurship mainly serves to generate social capital, include and emancipate populations in vulnerable situations or that experience inequalities.
On the other hand, business entrepreneurship has the same objective as any private company, which is to generate profit for the owners, partners and investors.
Another fundamental difference is that traditional entrepreneurship focuses on producing goods that meet customer needs and desires, while social entrepreneurship works for transformation in communities.
These changes and impacts on people’s lives are the main measure for evaluating the success of a social enterprise.
What Is Business Entrepreneurship?
It is the most common type of entrepreneurship , which moves one or more individuals towards opening their own business .
Generally, the entrepreneur enjoys a strategic vision, identifying a creative solution to common problems.
In this way, he assembles the structure of his company oriented to a specific niche, which will be served from a model focused on innovation .
Unlike traditional organizations, which value rigid hierarchies and centralized control, entrepreneurs focus on what is best for the customer, building a relationship that will maintain interest in their products and services over time.
They are also characterized by decentralization, oriented work, employee empowerment and resource self-sufficiency.
What Is Pure Entrepreneurship?
This expression refers to the very action of undertaking , also related to the opening of a new business.
The concept of entrepreneurship includes innovation, autonomy and risk.
Innovation is born from the creativity and repertoire of the entrepreneur, who needs autonomy to put his idea into practice.
In this context, he also takes risks , as the business may not work out, for example, because it is not well accepted by the public, face unfair competition or lack of investors.
Even if the price to pay is high, the entrepreneur will not give up this freedom to put his idea into practice.
Case Studies: Examples Of Social Entrepreneurship
Just follow the success cases that we comment below.
Conceived by Bangladeshi Muhammad Yunus , the bank is one of the most popular social enterprises in the world.
It all started in the 1970s, when Yunus decided to mobilize against an injustice in his country – Bangladesh.
The poor population could not obtain credit from banks , even if it was to open a new business.
Whenever they needed to borrow money, these people had to resort to loan sharks, who charged abusive interest.
So, the entrepreneur thought of a way to prove that loans to this segment of the population had low risk, attracting investors to structure their own microcredit bank.
He himself lent US$ 27 to 42 women in a community, who invested in work tools and managed to pay all the installments.
From this successful experience, Grameen Bank was born , which grants small loans to support production and poverty reduction in several countries.
The organization awarded Yunus the Nobel Peace Prize in 2006 and, by 2011, had already helped poor families with nearly $10 billion.
That year, in an interview with Exame Magazine, the entrepreneur stated that he did not fear default , clarifying that:
“Our business model has proven effective since the beginning, in the 1970s. We’ve never had problems like this anywhere. Our historic default rate is 97%. In 2009 alone, we lent more than 1.2 billion dollars and recovered all the money.”
The Support Group for Adolescents and Children with Cancer (GRAACC) is one of the most popular social businesses in Brazil.
The entity was created in 1991, through a partnership between pediatrician Antonio Sérgio Petrilli, engineer Jacinto Guidolin and volunteer Lea Della Casa Mingione.
The team wanted to improve the chances of a cure for children with cancer and, in 1998, achieved technical-scientific collaboration with the Federal University of São Paulo (UNIFESP).
In this way, GRAACC has become a reference in the treatment of childhood cancer , being maintained through the sale of products in bazaars, virtual stores and donations.