Tuesday, 24 January 2012

Social Entrepreneurs (contd.) – It’s Not All about Start-Up

by Ken Caplan

In our last post, we considered the meaning of the term ‘social entrepreneur’ and a few questions arose: The first was: Do social enterprises more aptly describe those who provide a service rather than a product? (Those that provide a product are inventors, aren’t they?) If it applies more to those who provide a service, the key is how the initiative or enterprise (though not necessarily the entrepreneur him or herself) relates to an ongoing customer base. The presumption is that, while ‘normal’ entrepreneurs seek a gap in the market and aim to fill it purely to generate profit, social entrepreneurs start with a social problem and then try to find a (business) solution to it, still requiring a financial return to make the venture viable. Presumably this suggests that social entrepreneurs are constantly moving – seeing problems, starting up initiatives and then passing them on or embedding them in the system? 

With this in mind, the question of how to support or foster social entrepreneurs comes up time and again. Initial support structures can help think through the business model, or provide credit lines, subsidised supply chains, free advertising, etc. After a while though, do these end up distorting the initiative by incentivising the entrepreneur to stay involved for too long? Or are they necessary to ensure take-off and consolidate markets that are often already distorted by price disparities, unfair competition, unsupportive public policy or environments that are not enabling?  

In contrast to normal entrepreneurs, if the key to social entrepreneurial efforts is to solve social problems, presumably the goal is to embed and encourage competition or copycats, moving from an initiative or pilot to a movement or an institutionalised change? Practically speaking though, once something is working and making money, doesn’t it become difficult for these individuals to walk away? Wouldn’t they rather seek to protect their (financial and other) investments? External supporters are busy thinking through how the original initiative should look and how it can be encouraged. Does time also need to be devoted to thinking not about how to protect these initial start-ups, but how to ensure that “first followers” or copycats also have at least some sense of social value in mind?  

Finally, of course one needn’t be “socially” minded to be an entrepreneur. However, to make progress on social issues, perhaps one must be entrepreneurial, given reduced public attention spans and struggling public sector finances. (As a Governor in my child’s primary school, I am even seeing this approach permeating through Government guidance on how schools are run, for example in suggesting the school can increase its budget by offering services to the community or other schools.) Whether this again distorts social agendas and the predictability required of ‘social’ services requires further discussion. Stay tuned…