Work in Progress

I believe that the inequality between the rich and the poor is what causes the ills of the world – environmental deterioration, crime, drugs, terrorism.”So spoke the billionaire founder of eBay. It might have been April 1^st, but Jeff Skoll was dead serious during his speech at Oxford University.117 He continued that “social entrepreneurs work to decrease that inequity, bringing in new ideas to leverage small amounts of resources into something that creates a great amount of good. A great social entrepreneur is someone who makes a difference at scale, who doesn’t just affect a small number of people, but who shifts the entire landscape.” Skoll was speaking at an event that carries his name - the 2005 Skoll World Forum on Social Entrepreneurship, which was organised by Saïd Business School’s new ‘Skoll Centre for Social Entrepreneurship’.118

The centre is backed by the Skoll Foundation, whose mission is to advance systemic change to benefit communities around the world by investing in, connecting and celebrating social entrepreneurs. Along with the Ashoka, Schwab and Avina foundations, it is helping to promote the ‘new heroes’ that are making the world a better place. They use the term ‘social entrepreneur’ to describe professionals in private or nongovernmental sectors who are pioneering new approaches to social and environmental problems. The Schwab Foundation describes social entrepreneurship as “about applying practical, innovative and sustainable approaches to benefit society in general, with an emphasis on those who are marginalized and poor.” It defines a social entrepreneur as “a pragmatic visionary who achieves large scale, systemic and sustainable social change through a new invention, a different approach, a more rigorous application of known technologies or strategies, or a combination of these.”119 Such social entrepreneurs can work within and transform large organizations to make them more socially beneficial, or create their own organizations that provide solutions to social challenges. The Dean of Oxford University’s Saïd Business School, Anthony Hopwood explains that “just as entrepreneurs have changed the face of business, social entrepreneurs act as the change agents for society, seizing opportunities others miss and improving systems, inventing new approaches and creating sustainable solutions to change society for the better.”120

At the conference the recipients of the 2005 Skoll Awards for Social Entrepreneurship were announced. One of these was the Rugmark Foundation USA, which has been working since 1994 to eliminate child labor in carpet manufacturing.121 In Nepal, Pakistan and India, the organization monitors factories, certifies carpets made without child labor, and rescues and educates child laborers. In consumer countries, it seeks to create market preference for certified rugs. Imports of certified rugs now represent 1 percent of the U.S. market, and with help from Skoll, Rugmark Foundation USA hopes to increase the market share of certified rugs to 5 percent by 2007. Another recipient is the Appropriate Technologies for Enterprise Creation (ApproTEC) which since 1991 has been developing and promoting technologies that can be used to run profitable small-scale enterprises.122 Working in developing countries in Africa, ApproTEC introduced low-cost, people-powered irrigation pumps that enable farmers to grow more crops and sell produce in the dry season, when prices are high and supply is low. Since its inception, ApproTEC reports it has helped farmers start 36,000 new businesses in Kenya, Tanzania and Mali that collectively generate more than $38 million in new profits and wages per year.

Ashoka Foundation’s Olivier Kayser, argues that one of the most powerful things they do for people, beyond providing financial support, is giving them with a sense of common identity as social entrepreneurs.123 This reminds us how concepts are powerful in shaping our lived realities. The way the concept of ‘social entrepreneurship’ is defined is therefore an important process. Some understand it in a more narrow sense, to describe the practice of those involved in ‘social enterprise’, which are viewed as “those businesses with primarily social objectives whose surpluses are principally re-invested for that purpose in the business or in the community.” That is the definition offered by the Sustainable Enterprise Research Group (SERG) at the Management School of Liverpool John Moores' University in the UK. They continue that it is “an umbrella term for a range of alternative business models, which combine civic engagement and public service with wealth creation.”124 It is certain that the burgeoning activity of alternative companies involved in fairtrade, community-based or organic production warrants more research, and that larger corporations that seek to be more responsible should not be grouped together with them as ‘social enterprises’. However, individuals with the attitude and skills to successfully innovate and implement new approaches to social challenges, can work in all social and organizational settings, and their common characteristics invite definition, investigation and support.

How is the management academy responding to this phenomenon? “Social entrepreneurship is a growing international trend and increasingly business educators are incorporating the discipline into their core curricula” argues Anthony Hopwood. Yet his university is one of the few that have made research and teaching on social entrepreneurship a priority. The US is where management academy have engaged most with social entrepreneurship, although in many cases it has meant a rebranding of existing work on the nonprofit sector. For example, emerging out of its work on non-profit sector management, Harvard University has established the Social Enterprise Initiative, which regards ‘social enterprise’ as encompassing “the contributions any individual or organization can make toward social improvement, regardless of its legal form (nonprofit, private, or public-sector).”125 The Association to Advance Collegiate Schools of Business, an international accrediting agency, lists 28 other schools that report programs in social entrepreneurship, including Columbia, Stanford, Duke and Yale.126 Much impetus for work in this area is coming from students themselves.

Students of the National University of Singapore, for example, have created the Social Entrepreneurship Forum, which convenes every year.127 In New Zealand the student-led University of Auckland Entrepreneurship Challenge 2005, called for applications from social entrepreneurship projects.128 The largest example of a student led initiative is ‘Net Impact’, which seeks to “shape the future of business by fostering a network of new-generation leaders who are committed to using the power of business to improve the world.” Headquartered in San Francisco, with more than 100 local groups in cities and graduate schools around the world, it now involves more than 11,000 members.129 Amlan Saha, co-founder of the Net Impact chapter in the Haute Ecole de Commerce (HEC) in France, told the JCC that “if a business school is lagging behind in providing education on social entrepreneurship, it is often students affiliated to the Net Impact network who organize seminars, which once tried, are often incorporated into the curriculum. It’s a student movement for more powerful and progressive business education.”

Intellectual development in this area is limited, perhaps those most interested in it want to do something rather than just write about it. Ashoka publishes the journal Change Makers130 which provides useful information in a journalistic style. The Schwab Foundation collaborates with the Spanish business school IESE to publish a case studies series; although useful they focus on describing success and therefore serve as advocacy material.131 In 2003 Stanford started the first academic journal dedicated to the subject, The Stanford Social Innovation Review, which also presents fairly functional and uncritical analysis of the area.132 The Liverpool University researchers are editing a special issue of the Journal of Social Economics which will also add to thinking in this area.133 However, despite a few papers describing the development of this concept134, it remains under-researched and under-theorized. One reason may be because it poses a challenge to the traditional research disciplines in management studies. There is certainly valuable interdisciplinary research, theorizing, publishing and educating to be done on social entrepreneurship in general. 

The growing interest in social entrepreneurship is driven by a questioning of traditional business practices, on the one hand, and traditional forms of charity, on the other. Changes to their funding environment have pushed some  non-profit organisations to look at potential market-based models of social change. Growing interest in the potential commercial opportunities to be found in providing products and services to the world’s poor is another factor. In 2005 the Shell Foundation made a splash on this topic with their report ‘Enterprise Solutions to Poverty’. Using a series of case studies in Africa and India, the Shell Foundation explains how multinationals operating in developing countries can apply non financial assets - such as their convening power, networks and management acumen - to the problems of poverty.135 A new book by Stuart Hart, broadened this ‘base of pyramid’ the concept, to suggest that business leaders should engage with the world’s really difficult problems as they could find profitable business models in providing practical solutions.136 The rise of this concept in the management studies academe was illustrated by IESE’s development of learning laboratory on the base of the pyramid concept.137

IESE’s focus is on large international corporations. However, John Elkington, who is writing a book on social entrepreneurship, told the JCC that the old economy of large consuming and controlling organizations will eventually die off and the seeds of the future economy are being planted by socially and environmentally conscious entrepreneurs who are starting their own companies. This view recalls the concept of ‘creative destruction’ first articulated by Joseph Schumpeter in 1942. “Capitalism... is by nature a form or method of economic change and not only never is but never can be stationary...” wrote Schumpeter. “The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.”138 An example of this process comes from personal computing. The industry, led by Microsoft and Intel, destroyed many mainframe computer companies--but in doing so, entrepreneurs created one of the most important inventions of this century.

Evolutionary biologist and social commentator Elisabet Sahtouris uses the metaphor of the butterfly to reflect the hope that the coming transformation will create something more beautiful than the current economic order. “In metamorphosis, within the body of the caterpillar little things that biologists call imaginal discs or imaginal cells begin to crop up in the body of the caterpillar. They aren't recognized by the immune system so the caterpillar's immune system wipes them out as they pop up. It isn't until they begin to link forces and join up with each other that they get stronger and are able to resist the onslaught of the immune system, until the immune system itself breaks down and the imaginal cells form the body of the butterfly.” Sahtoris says this “is a beautiful metaphor for what is happening in our times. The old body is going into meltdown while the new one develops. It isn't that you end one thing and then start another. So everybody engaged in recycling, in alternative projects, in communal living, in developing healthier systems for themselves and each other is engaged in building the new world while the old one collapses. Its collapse is inevitable. There is no way around that.”139

This social butterfly takes Schumpeter’s view of creative destruction to a new level, for if its cells are new types of entrepreneur, its body will be a new form of economic system.

contents © Greenleaf Publishing, apart from the Introduction © jem bendell, 2006. site by waywardmedia.com