Introduction
Social entrepreneurship is a term that has gained traction in the last few decades. It combines traditional business principles with a focus on social impact. The concept, however, is fluid, and its definition varies depending on the perspective from which it is examined. In this article, I will explore 15 different definitions of social entrepreneurship, analyze their implications, and provide real-world examples and calculations to illustrate the concept.
Table of Contents
1. Classic Definition by Muhammad Yunus
Muhammad Yunus, the founder of Grameen Bank and a Nobel Laureate, defines social entrepreneurship as business activity that prioritizes social benefits over profits. Unlike traditional businesses, a social enterprise reinvests profits to further its mission.
Example: A microfinance institution that provides small loans to low-income entrepreneurs reinvests its profits into expanding its services rather than distributing them to shareholders.
2. Definition by Ashoka Foundation
Ashoka, a global organization that supports social entrepreneurs, defines social entrepreneurship as innovative solutions to society’s most pressing problems. It highlights the need for systemic change and sustainable impact.
Comparison Table:
| Traditional Entrepreneurship | Social Entrepreneurship |
|---|---|
| Profit-driven | Impact-driven |
| Focus on market share | Focus on social change |
| Investor returns are primary | Social return is primary |
3. Gregory Dees’ Perspective
Dees, a pioneer in social entrepreneurship education, describes it as combining the passion of a social mission with the discipline of business practices. He highlights the importance of market-driven approaches to solving social issues.
4. Jean-Baptiste Say’s Definition
Say, an early economist, defines entrepreneurs as individuals who shift resources from lower to higher productivity. Social entrepreneurs apply this principle to maximize social value rather than profit.
5. Peter Drucker’s View
Drucker argues that entrepreneurship is about innovation and change. Social entrepreneurs, in this view, focus on improving systems and solving inefficiencies in social structures.
6. The Skoll Foundation’s Interpretation
The Skoll Foundation, a major supporter of social entrepreneurs, defines them as individuals who create large-scale social change through innovative business models.
Illustration Table:
| Social Issue | Traditional Approach | Social Entrepreneurship Approach |
|---|---|---|
| Homelessness | Government subsidies | Housing-first model businesses |
| Education | Public schooling | EdTech solutions |
7. The Stanford Social Innovation Review Definition
This journal defines social entrepreneurship as any innovative solution to social problems that is sustainable and scalable.
8. Bill Drayton’s Perspective
Bill Drayton, the founder of Ashoka, believes social entrepreneurs are people who recognize problems and implement solutions that change the system fundamentally.
9. David Bornstein’s Definition
Bornstein, the author of “How to Change the World,” sees social entrepreneurship as a problem-solving mechanism that applies business strategies to address large-scale social issues.
10. The U.S. Small Business Administration’s View
The SBA considers social entrepreneurship as business activities that address public concerns while maintaining financial sustainability.
11. Harvard Business School’s Definition
HBS describes social entrepreneurship as the pursuit of a dual mission: financial stability and measurable social impact.
12. The European Commission’s Perspective
In Europe, social enterprises must balance social, environmental, and economic objectives, often reinvesting a majority of their profits into the mission.
Calculation Example: If a social enterprise earns $100,000 annually and reinvests 70%, then: Reinvestment=100,000×0.70=70,000\text{Reinvestment} = 100,000 \times 0.70 = 70,000
13. The U.N. Sustainable Development Goals (SDGs) Alignment
Social entrepreneurship is often defined in the context of the SDGs, which focus on poverty reduction, education, and environmental sustainability.
14. B Corp Certification Perspective
B Corps, certified businesses that meet high social and environmental standards, define social entrepreneurship as using business as a force for good.
15. The Practical U.S. Business Perspective
In the U.S., social entrepreneurship is often seen as a for-profit or nonprofit business that addresses social issues while being financially viable.
Conclusion
The definitions of social entrepreneurship vary, but they all emphasize social impact, innovation, and sustainability. Whether viewed through the lens of microfinance, education, healthcare, or environmental sustainability, social entrepreneurship continues to evolve, shaping the way businesses operate to create a better world.
