BCE 413: ENTREPRENEURSHIP AND

EMPLOYABILITY NOTES
Social Entrepreneur
A person who pursues novel ideas with the potential to solve or alleviate certain community-
oriented problem

Who is a Social Entrepreneur?

A social entrepreneur refers to an individual who pursues novel ideas with the potential to
solve or alleviate certain community-oriented problems. Social entrepreneurs often are willing
to take the risks associated with their venture to help address issues, enabling positive change
in society.

In order to understand the term social entrepreneur, we must first understand that an
entrepreneur refers to someone with creative and innovative ideas who already identified a
void in the marketplace and is attempting to create a solution to address the issue.
Entrepreneurs often take a higher amount of personal or financial risk, striving to bring about
the success of their initiative.

Summary

 A social entrepreneur refers to an individual who pursues novel ideas with the potential to solve
or alleviate certain community-oriented problems.
 Social entrepreneurs often are willing to take the risks associated with their venture to help
address enabling positive change in society.
 Social entrepreneurs often need to make sure that their ideas are easily understandable, user-
friendly and that they are able to receive vast support from other people who will join in the
venture.
Understanding Social Entrepreneurs

Social entrepreneurs often start their venture or initiative after recognizing the prevalence of a
certain problem in society and creating a solution to address it using their entrepreneurial skills.
Their overall goal is to make a positive societal change while creating social capital to further
their objectives.
They are often very ambitious and persistent in tackling major social issues and offering their
ideas for societal-wide changes. Rather than leaving solutions to the government or business
sectors, social entrepreneurs will likely analyze the situation and find solutions by changing the
system and often persuading governments, large corporations, and sometimes even entire
societies to join them to support their initiatives.

Social entrepreneurs will often devote much of their lives to their passions and interests in
order to bring about positive changes to the areas they are concerned about.

Social entrepreneurs often need to make sure that their ideas are easily understandable, user-
friendly, and are able to receive vast support from other people who will join in the venture.
Often, every leading social entrepreneur is a recruiter of local changemakers and acts as a role
model for other like-minded individuals with similar passions.

Characteristics of Social Entrepreneurs

Social entrepreneurs certainly differ when it comes to individual personalities; however, they
also share similar characteristics necessary for success as pragmatic individuals willing to
undertake significant risks and uncertainties to achieve positive changes in areas that might be
resistant to new ideas or approaches. The following are the characteristic of social
entrepreneurs;

1. Ambitious

Social entrepreneurs often tackle major social issues and often strive to improve the lives of
certain disadvantaged groups within society. They operate in all kinds of organizations
from non-profit organizations, charities, ventures – such as for-profit community development
banks – and organizations that mix elements of non-profit and for-profit organizations.

2. Mission-driven

Social entrepreneurs often focus on generating social value and focus less on profits and
revenue. When profits are generated, they are put back into supporting the social mission of
the organization. While profit is an important objective of the organization, the money is used
towards furthering the social cause and objective.

3. Strategic

Social entrepreneurs are adept at observing what others might miss. They identify
opportunities to improve systems to create new solutions and approaches to create societal
value and make a positive change in society. Social entrepreneurs need to be extremely
determined and conscientious in order to be relentless in their pursuit of the social objective.
4. Resourceful

Social entrepreneurs often lack the strong support offered in the business world of access to
capital and market support systems due to their interest in the social context rather than profit
generation for shareholders and other stakeholders. They need to be skilled at persuading
others to agree with their ideas and support their ambitions through financial, political, and
other means.

5. Results-oriented

Social entrepreneurs focus on the end results, which transform existing realities, open up new
pathways for the marginalized and disadvantaged, and unlock society’s potential to effect social
change.

Difference: Social and Commercial Entrepreneurship

The upcoming discussion will update you about the difference between social and commercial
entrepreneurship.

1. Emergence Purpose:
Social-purpose organizations emerge when there is social-market failure, which means that
commercial market forces do not meet a social need, such as in public goods. A problem for the
commercial entrepreneur is an opportunity for the social entrepreneur. This implies that market
failure will create different entrepreneurial opportunities for social and commercial
entrepreneurship.
2. Mission:
The fundamental purpose of social entrepreneurship is creating social value for the public good,
whereas commercial entrepreneurship aims at creating profitable operations resulting in private
gain.
3. Resource Mobilization:
The economics of a social entrepreneurial venture often makes it difficult to compensate staff as
competitively as in commercial markets. In fact, many employees in social entrepreneurial
organizations place considerable value on no pecuniary compensation from their work. Therefore,
human, material and financial resource mobilization is done and is managed in different manner in
both the entrepreneurships.
4. Performance Measurement:
The social purpose of the social entrepreneur creates greater challenges for measuring
performance than the commercial entrepreneur. The commercial entrepreneur can rely on
relatively tangible and quantifiable performance parameters such as profit, market share, customer
satisfaction, and quality. Performance measurement of social impact is difficult to measure. Many
times, the impact is intangible and even slow which makes accountability and stakeholder relations
a tough task.
5. Governmental Support:
The social entrepreneurs receive support from governmental agencies in many ways whereas the
similar support is not received by a commercial entrepreneur. Even the interest rates on loan by
banks differ substantially in both cases.
6. Advertisements:
All advertisements by social entrepreneurs on TV, radio, newspaper get a heavy discount where as a
commercial entrepreneur has to pay through his nose for the prime time commercials.
However, the fact is that the charitable activity must still reflect economic realities, while economic
activity must still generate social value. Although social entrepreneurship is distinguished primarily
by its social purpose and occurs through multiple and varied organizational form. A social- purpose
commercial enterprise may differ less on these dimensions from its commercial counterparts than a
social enterprise that does not have any commercial aspect to its operations
The real difference between social and commercial, is not about turning the poor into profitable
businesses but about applying the principles of entrepreneurship – innovation, ambition, clear
objectives, marketable principles, iterative improvement and rapid discard of failure – to social ends
that cannot, of their very nature, ever be profit.

The Importance of Social Entrepreneurship for Development

1. Employment Development
The first major economic value that social entrepreneurship creates is the most obvious one because it is
shared with entrepreneurs and businesses alike: job and employment creation. Estimates ranges from
one to seven percent of people employed in the social entrepreneurship sector. Secondly, social
enterprises provide employment opportunities and job training to segments of society at an
employment disadvantage (long-term unemployed, disabled, homeless, at-risk youth and gender-
discriminated women). In the case of Grameen the economic situation of six million disadvantaged
women micro-entrepreneurs were improved.

2. Innovation / New Goods and Services

Social enterprises develop and apply innovation important to social and economic development and
develop new goods and services. Issues addressed include some of the biggest societal problems such as
HIV, mental ill-health, illiteracy, crime and drug abuse which, importantly, are confronted in innovative
ways. An example showing that these new approaches in some cases are transferable to the public
sector is the Brazilian social entrepreneur Veronica Khosa, who developed a home-based care model for
AIDS patients which later changed government health policy.

3. Social Capital
Next to economic capital one of the most important values created by social entrepreneurship is social
capital (usually understood as “the resources which are linked to possession of a durable network of ...
relationships of mutual acquaintance and recognition"). Examples are the success of the German and
Japanese economies, which have their roots in long-term relationships and the ethics of cooperation, in
both essential innovation and industrial development. The World Bank also sees social capital as critical
for poverty alleviation and sustainable human

4. Equity Promotion
Social entrepreneurship fosters a more equitable society by addressing social issues and trying to achieve
ongoing sustainable impact through their social mission rather than purely profit-maximization.

To sum up, social enterprises should be seen as a positive force, as change agents providing leading-edge
innovation to unmet social needs. Social entrepreneurship is not a panacea because it works within the
overall social and economic framework, but as it starts at the grassroots level it is often overlooked and
deserves much more attention from academic theorists as well as policy makers. This is especially
important in developing countries and welfare states facing increasing financial stress.

Models of social entrepreneurship

The social entrepreneurship model can be of 2 kinds:

1. Non-profit social enterprise

2. For-profit social enterprise

Business is not just for money, there are many social responsibilities as the
byproduct of the business, the social enterprise model. Social entrepreneurship is
coming into action from that mindset for contribution to society at its core.

There are several business models to promote that enable you to offer social
value to your valued customers with services, like fee-for-service, sustainability,
employment, market, volunteering environmental support, etc.

What is the best social entrepreneurship business model for success- A profit with
a charity mission? Social impact investment? Is the foundation of a traditional
charity? Your company is up and running, how do you make sure of its long-term
survival?

Social entrepreneur is growing. According to Harvard Business Review, today only

about a quarter of all social ventures were established. To help rid the world of
poverty, hunger, unemployment, lack of water and proper cleanliness, and other
major problems, many passionate, energetic people are willing to enter them.
Yet, often with their efforts, due to lack of adequate funding, they fall down the
road.

Social entrepreneurship business model

It is significant that a social entrepreneurship business model for profit develops

and implements optimized solutions effectively for societal problems, with
enterprise examples as the outcome.

To bring value to customers social entrepreneurship model generated

by Wolfgang Grassi, has come into consideration. Grassi said that there are 3
steps that determine whether a successful model is usually a business:

 the model of profit for model owners,

 the ability to produce positive changes globally, and
 the ability to gain balance and positive change.
Modern social initiatives are implemented. The social business model is a
structure, design, or structure that follows a social business to bring positive
change while maintaining healthy financial returns.

The 5 Ps of social entrepreneurship are: Persistence, Patience, Purpose, People &

Profits.

Types of social initiatives

According to a study by Wolfgang Grassi, the following are the types of social
initiatives.

 Employment model, a social initiative that provides job opportunities

and job training to their clients
 Fees-service-model where the social initiative charges the customer
directly for socially beneficial services
 Low-income client model, while paying attention to low social income
clients, a social initiative usually offers direct services to social
services (such as a fee-service-service model)
 The cooperative model is a fee-based membership organization that
provides a general service or membership service to a group that
targets
 Entrepreneur Support Model, which directly sells business support
services to entrepreneurs in the targeted
 The market intermediary model helps their clients by marketing or
selling their clients’ products or services
 The market connection model focuses on building relationships and
otherwise connects to markets for their client’s products and
services.
 Service subsidy model that pays social programs by selling goods or
services in the market.
 The organization’s support models sell products or services to fund
social programs (as a service subsidy model). However, the social
programs that they collect funds are part of a separate, parent
company
These types of social enterprise business models have many variations, they can
give you ideas about how to create a sustainable facility for society during your
financial stability.

Social entrepreneurship business model: Non-profit social enterprise

It is significant that a social entrepreneurship business model for profit develops

and implements optimized solutions effectively for societal problems, with
enterprise examples as the outcome. Characteristics of social entrepreneurs are
the change maker of the world for-profit social enterprise business model.

In the recent Wharton Africa Business Forum, social enterprise funding models,
some prominent social entrepreneurs have described the various financial
processes and issues facing the African continent, social enterprise business
model example:

 protecting children from severe waterborne illnesses,

 providing families with dangerous kerosene lamps,
 candidates for software work for out-of-hours training.

For Kaba Jones to move, the social entrepreneur journey is a personal issue that
“develops from the smoke of civil war”. He was born in Liberia but escaped with
his family at the age of eight, before 1989, the long and bloody civil war in the
country started.

Jones said, “Millions of people were expelled from their homes, the infrastructure
was destroyed and the fabric of the society was separated.” In 2008, he returned
to Liberia 2008 to assist “reconstruct one piece at a time”.

“Every solution should be market oriented now, and this pressure for nonprofits
… will create, market and sell the products and services of the poor.” -Kaba Jones

A nonprofit company working for improving access to safe drinking water and
sanitation in Liberia, founder, and CEO of Jones Fass Africa. He explained that
primarily he wanted to concentrate on his efforts on education (FACE is actually
standing as a “children’s education fund”), but quickly realized that the task of
enabling clean water access to children was one of the children.
“Children do not see long-term school due to waterborne illnesses like diarrhea
and typhoid.” According to the World Bank, water-related diseases are beaten by
less than five years of African children over HIV / AIDS, malaria, and torch.

Since its establishment in 2009, Facebook’s 50 Community Water Project has

affected 25,000 people from 35 communities in Liberia. Jones said his goal is to
provide 100% water to one area in Liberia so that the successful part of the
country can be rebuilt in other parts of the country and on the continent.

According to Jones, there is also the economic impact of water problems. “African
women spend 60% of their time walking to drink water every day, and the
continent lost 40 billion working hours to collect water every single year.” With
clean water, doing other types of work, and improving their families. ‘Quality of
life

Although Africa collected more than $ 600,000 from Africa’s JP Morgan Chase,
CoCo-Cola, and P & G, it still continues. For the past two or three years, the
company is hiding “in the Valley of Death”, Jones said, holding a word from a
commercial startup that relates to the time before the start of a company’s
revenue production.

“You are at a stage where you are not the most start-up, but you need financing
and resources to reach the next level.” He told the experience as “the most
difficult and frustrating thing about any non-profit or social enterprise.”

Jones mentions that the “old charity” may exceed these days according to the
custom of this African custom.

“Every solution should now be market-oriented, and there is pressure for

nonprofits … to create, market, and sell goods and services to the poor.” But in
Jones’s view, when “some” most restricted population … services should not be
provided by the government properly, “a profitable answer is often not enough.