You may have found yourself in a position of late overhearing or being surrounded by terms or phrases such as; “Our business is a social entrepreneurship” or “We’re really great at social innovation.” I have heard these terms since the day I started business school and still manage to find myself in awkward and frustrating situations. Just the other day, I was being interviewed and was asked why I am interested in working with social entrepreneurship. The interview quickly led to a disagreement about what I and the interviewer defined as Social Entrepreneurship.
At this moment I found myself wondering – how have we gotten to the point today where the term is so commonly used in conversations, marketing and business practice, yet remains so ambiguous?

So what do we know about social entrepreneurship today?

We’ve recently seen investment trends in businesses that have a social impact. It has become more attractive to invest in a concept that gives back to society. But naturally, when so many adopt a term, it becomes increasingly difficult to define. Spring 2007, the Stanford Social Innovation Review argued that Social Entrepreneurship signals the importance of driving social change and creating a venture that is beneficial to society.  But by this claim, the definition of social entrepreneurship becomes even less clear, as this means that by solely claiming that a business contributes to society, your business can be a social enterprise. Which carves a whole new pathway of confusion, as any business creator can then claim that their venture is beneficial to society.

Focusing in on “Entrepreneurship” alone – a term that I cannot stress enough frustration towards, entrepreneurs and economists from Peter Druker, Jean-Baptiste Say, over a long period of time have attempted to clarify this term. Business school teaches you, in simple terms, that entrepreneurship is a business that takes risks to maximise profits; the practice or willingness to organise a venture in the pursuit of organisational growth and development. The nature of this definition is similar to Stanford’s definition of Social Entrepreneurship; ambiguous and open for argumentation.

Stanford Social Innovation Review argues that the entrepreneur is an agent that follows a process of being inspired to approach a problem, creative to develop a new solution and action-oriented to carry out the new solution.

Going back to the term social entrepreneurship and method of isolating the term “entrepreneurship”. We learn that an entrepreneur must be willing to take risks and strive to approach a problem with a new and novel solution. Standford Review argues that social entrepreneurship should; (a) Target a margin or proportion of suffering population/segment of humanity that currently lacks the resources that will provide better quality of life or national development which the enterprise wishes to offer, (b) Seek an opportunity of social value proposition, or (c) Create a new and stable equilibrium that relieves the humanitarian suffering or provides the resources targeted.

Can a dating app such as Tinder be defined as a social enterprise? It is a difficult debate to conclude as it is arguable that Tinder can add value to a population through better quality of life and adds long-run economic value through increasing population. If we are arguing Tinder’s use in country such as Sweden where OECD Quality of Life and Life Satisfaction index are amongst the highest in the world (9.1) and a growing population, then the app has limited benefits. But in a country such as Japan, a country that has been experiencing declining population and marriage rates and a OECD Quality of Life Community index of a 6.1 and Life Satisfaction of 4.0, the app could be a social enterprise. This suggests that to be categorized as a social enterprise, it depends on the society and culture context. But this leaves us with the last determent of a social enterprise, “…relieves the humanitarian suffering…”. This category is the most ambiguous, as it is difficult to argue what humanitarian suffering is above a level of need. For this reason, it helps using Maslow’s Hierarchy of Needs pyramid (Basic, Psychological and Self-fulfilment needs). We can make a case using Maslow’s pyramid if one argues that the idea “relieves” or moves the population targeted to a higher level of the pyramid. What this means is that there needs to be more research in terms of what suffering entails. For example; is Japan, a country with measurements above average for economic well-being, experiencing humanitarian suffering due to a declining population?

So what does this mean? An enterprise can be defined as a social enterprise, depending on what social and cultural context it targets. However, to provide a clear definition of the commonly used determents of a social enterprise, it must;

(a) Target a margin or proportion of suffering population/segment of humanity that currently lacks the resources that will provide better quality of life or national development, which the enterprise wishes to offer

(b) Seek an opportunity for social value proposition

(c) Create a new and stable equilibrium that relieves the humanitarian suffering or provides the resources targeted,

but more research in what constitutes “humanitarian suffering” is needed.

AUTHOR

Cecilia Johansson is an industrial engineer with one foot in business tech and another in corporate sustainability. She strives towards ensuring that corporations grow together with society.