Why Social Entrepreneurship Matters
How business can (and should) be a force for good.
In the current age of sustainability, a new generation of entrepreneurs has emerged, namely social entrepreneurs.
Simply put, social entrepreneurs actively contribute to the betterment of the world by establishing purposeful ventures aimed at solving some of the greatest social and environmental issues of our times.
Different from charities, social enterprises raise profits so they can scale operations and extend the scope of their impact.
Ever since I have discovered the concept of social entrepreneurship, I have been highly interested in how business can be a force for good, how crucial it is today, and why many companies, unfortunately, are still very much focused on short-term gains.
As citizens become more and more aware of the state of the natural world and current social issues, many consultancy agencies, scholars and businesspeople point out that consumers are more attracted to companies that offer sustainable alternatives. Specifically, Accenture highlights that the ongoing health emergency has accelerated the rise in conscious consumption.
Although consumer attitudes do not always predict purchasing behavior, it confirms there is a higher degree of awareness and knowledge surrounding the importance of sustainable development (and the role of companies in aligning with it).
But regardless of whether there is solid demand for social enterprises or not, business owners should strive to improve the planet and society via their commercial activities as companies do not exist in isolation and are organs of society itself.
In this vein, Peter Drucker asserts in his book Management: Tasks, Responsibilities, Practices (originally published in 1973, yet some of it still relevant today) that the paramount purpose of businesses should be to make a positive impact on society. Specifically, “[businesses] do not exist for their own sake, but to fulfill a specific social purpose and to satisfy a specific need of society, community, or individual.”
The profit sustainable ventures generate is crucial, given it allows for impact on a large scale. However, it is not the reason why responsible businesses should exist in the first place.
Michael Porter, an influential American academic and professor at Harvard Business School, explores the idea of why profit raised by ethical companies is important in his Ted Talk. He also admits some corporations (those mainly driven by profit) are bad actors in the business and are the reason why some social and environmental problems have emerged (e.g. the fast fashion industry, the fast-food industry, and the banking industry). However, he believes that responsible companies can truly help solve those pressing issues.
For instance, the social enterprise Who Gives A Crap manufactures recyclable toilet paper (along with bamboo toilet rolls) and claims to donate 50% of profits to provide access to sanitation to people in need. So far, the company has managed to reinvest millions of pounds to create meaningful social impact and improve countless lives.
Reading about various stories on how business can be a force for good is extremely thrilling for me and it makes me hopeful.
Needless to say, it fills me with a strong motivation to contribute to the social entrepreneurship movement (I hope the same goes for you!) and to apply business acumen with the main purpose of giving back to the planet and society.
