Wednesday, 16 November 2011

Social Entrepreneurs: An Oxymoron in Name Only?

by Ken Caplan

What’s in a name?

Over the past few years, rather belatedly compared to other sectors, the water and sanitation sector has begun using the phrase “social entrepreneurs”.  The term however is far from new – according to Wikipedia, it was first coined back in the 1960s.  The essence of the concept is that entrepreneurial principles are applied to (re)solve social (or environmental) problems. 

The term came up recently on two television programmes here in the UK – The Apprentice and Dragon’s Den.  The first is a programme aimed at whittling down a group of self-described “entrepreneurs” to join a major corporation or win an investment in their business idea.  Similarly, Dragon’s Den sees a range of individuals or small businesses pitching for investment in their idea, product or business from a handful of “powerful” investors.  Unsurprisingly, as both focus on the financial bottom line (of making a return on an investment), it is easy to see how for some the term “social enterprise” can represent an oxymoron, as was directly stated on both programmes.  Maybe the term hasn’t quite caught on in the actual business world then?  Enterprise is after all usually equated with business, which requires profits to thrive.  If someone is described as “enterprising”, though, it can either mean that they take the initiative to solve problems or that they are good at making money from whatever venture they get involved in.

Social enterprises have grown up most notably around micro-credit but also around healthcare, the organic food movement, and a range of other sectors.  These are “social” in the sense that they provide a value that contributes to society.  They still require a “profit” to sustain themselves, to incentivise or reward those involved, or to expand (although the social nature of the initiative suggests that margins or return on the investment is presumably not meant to be very high).  

Although perhaps not labelling it as such, in various ways BPD has been exploring "social entrepreneurship", particularly in the sanitation sector, for a few years now.  For example, at present we are working with WSUP (Water and Sanitation for the Urban Poor) to understand how community managed service delivery can apply more business-like principles (to ensure their sustainability) or how local private sector management can be more poverty-focused by incorporating elements of community management.  Our work in this area is ongoing, but we will keep blog readers posted on how our thinking evolves...