Social Entrepreneurship

By Accident

or

By Design?

Social Enterprise

Set up & trade to specifically tackle a social or environmental need

Entrepreneurial autonomous spirit and social aim

“Change the world for the better”

“Doing business and doing good”

- Not solely maximisation of shareholder value

Profit/Social spectrum!Motives Business Social

BusinessSocial Enterprise Charity

Profit -generation or distribution?

Maximisation for shareholders

Max. With Larger CSR/charitable aspect

More-than-profit(NOT not-for-profit) > 50% reinvested

Not-for Profit- long-term

Social Some CSR Considerable CSR Key purpose/passion Key purpose

Environmental Sustainability initiatives

Considerable focus

Key purpose/passion Key purpose

Ethos Private sector efficiency

Bias towards private sector

Bias toward long term purpose – revenue via trading

Public sector service – £ via donations or government

Solutions to societal problems

Unlikely unless incentivised/led

Supportive /selectively

Address by being excellent or there

Fulfils some but not all gaps

Ethics Bottom-line focus

Sizeable consideration

Benefit people & planet embedded at outset - balanced approach

Ethically and morally driven

Social Enterprises

Social Entrepreneurs • Definition – OECD gave 29 different references

– National, regional and cultural differences

• SE’s see the world in a different way - action rather than reflection• Need to make a difference in a sustainable way

– Triple bottom line – people, profit and planet - flexible• Want to transform lives, take control/ influence & lead the way

– Assume significant accountability for risks and outcomes - resilient• Strong social conscience – care deeply and can challenge & network• Passion to change something on which they feel strongly - intention

– Relentless energy and doggedness – emotional connection to cause– Campaign for a wider public or social good not their own rights

• Often witnessed/experienced an indignity & decided to take action– Desire to right a social injustice– Or make the world a better place– Want to change others lives more than their own - humble

• With enterprise skills then can see world-changing results • Value creation not appropriation

Social Enterprise v Entrepreneur“Not all social enterprises are started by social entrepreneurs and not all social

entrepreneurs start social enterprises” ... .. Charlotte Young, School for Social Entrepreneurs

Definition of a ...social entrepreneur via SSE“someone who works in an entrepreneurial manner, but for public or social benefit, rather

than simply to make money. Social entrepreneurs may work in ethical businesses, governmental or public bodies, quangos or the voluntary and community sector.”

“Entrepreneurship that aims to provide innovative solutions to unresolved problems”...OECD 2010

“SE’s are in pursuit of sustainable solutions to problems of neglected positive

externalities” (Santos 2009)

Social entrepreneur definition• Definition of “social entrepreneur”........ Wikipedia

“someone who recognises a social problem and uses entrepreneurial principles to organise, create and manage a venture to make a social change.”

• Growing arguments over definitions and boundaries– different definitions in Europe and with USA/Far East– Sense it is growing but difficult to measure – Concentrate on boundaries, analysing the landscape– Over-concentration v over-dilution (exclusive/inclusive) – Typology (Neck et al 2009)– Identify primary and secondary characteristics of social entrepreneurs

(Broard and Larivet 2009)

Social Entrepreneurs?

Quakers in 1640’s

Fenwick Weavers Society -Coop

Salt’s Mill & Saltaire

Cadbury’s/Rowntrees

Gurneys of Barclays Bank

REFLECTION AT LEEDS MET • Philanthropy – learn, earn, share

• New Philanthropists - channel energies /talents toward social and

environmental ends

• Economic self-sufficiency/sustainability

Definitional tensions

• SE as individual phenomenon

• SE shaped by social value

• Specific sector only

• Radical social transformations only

• Global phenomenon

• Collective

• Economic value creation – serves social

• Cross-sectors public, NFP and private

• Incremental social impacts

• Local

All kinds of people, all kinds of activity

Activities • Clothes recycling• Redesign workshops• Anti-gun crime merchandise• Street dance classes on challenging housing estates• Tap water bottle fill network

Who/People?• Public sector workers forming new enterprises• Retirees • School and community groups• People from Private business

Bill Drayton-Leading Social Entrepreneurs Changing the World

• Restless.......“Social entrepreneurs are not content to just give a fish or teach how to fish. They will not rest until they have revolutionised the fishing industry.”

• “The first and most obvious test of a true social entrepreneur is, are they possessed, really possessed by an idea...making it happen across society

• Revolutionary....Entrepreneurial quality – is by far the toughest (criterion for a social entrepreneur). For every 1,000 people who are creative and altruistic and energetic, there’s probably only one who fits this criterion, or maybe even less than that. By this criterion ...we do not mean someone who can get things done. The are millions of people who can get things done. There are very, very few people who will change the pattern in the whole field.”

Social Entrepreneurs • Robert Own – founder of Co-op movement • Vinoba Bhave – founder India’s Land Gift Movement• Ric Edelman/Nigel Hughes – Green Light Trust • Dave Hatherly – Wayland Radio• Gary Hirshberg – Stonyfield Farms• Jeffrey Hollander – Seventh Generation• Michael Young – SSE & > 60 others • Lord Andrew Mawson OBE – Bromley by Bow Centre, London • Mohammad Yunus – Grameen Bank• Iain McArthur – Training for Life

Forces on Social Enterprise• Way people see the world• Free market capitalism being questioned • Politicians budgets limited /insufficient –

systemic retreat of govt from public provision, giving primacy to market driven models of welfare

• Climate change• Water• Pollution/Sanitation• Rural to urban shift - Far East middle

classes• Inequality poverty and ageism• Extinction• Regulation• Innovation/improvement seen

• Indifference• Networks• Not enough creative ways to

generate income • Scale of change is daunting• Inconvenient truth • National/political interests• Corporate tactics• Authorities holding back • Lack of confidence /ability• Inappropriate systems and processes

to support• Fiscal and regulatory mechanisms • Skill and will-sets

Study on Practices and Policies in the SE Sector in Europe – July 2007

Definition• Fulfils social goals• Addresses a target population in need• Various legal forms but autonomy • Deals with voluntary social work• Reinvests profits or ltd distribution• May receive public funding • Continuous activity producing and

selling • Significant economic risk • Paid workers not just volunteers• Decision-making not based on capital

ownership• Participatory nature of activity –

(re)/integrate disadvantaged

• Almost impossible to obtain concise meaningful statistical information

• Legal regulations• Financial Support• Business Support• Measures fostering co-operation• EQUAL – funding for promotion of public and social

enterprise collaboration

• Austrian Institute for SME Research

• Recommendations and lessons learned • More stable and predictable funding instruments • Create EU defn and promote• Provide tailored business support• Encourage horizontal and vertical collaboration• Trans=national monitoring and assistance

OECD 2010 preliminary recommendations

• Build enabling environments and implement supporting policies– Enabling legal, fiscal and regulatory

• Provide sustainable finance – fiscal incentives for investors & credit enhancement

• Support further research on sector needs• Provide training opportunities to social entrepreneurs ands

include in curricula- culture of inclusive entrepreneurship/role models

• Support market development and public procurement• Evaluate impact – tools and social ROI

Social Enterprises EU Contribution 2020Laszl Andor, EU Commissioner – Oct ‘12

• Inherently linked to social-market economy • October 2011 – European Economic and

Social Committee supported• 2 million SE’s in Europe accounting for 10%

of all EU businesses and over 11 M paid employees @6% of EU working population

• Recently this sector created @10% of new roles in EU

• Role in social inclusion • “Social Business Initiative” action plan at

EU leveli. Facilitate Access to financeii. Raise visibilityiii. Improve legal framework• Measure socio-economic benefits• City collaboration on inclusive policies in

labour market

• Emphasised strongly the employment creating potential

• Crucial at this time• Creation of sustainable and high quality

roles• SE’s are pioneers in developing new markets

and creating jobs• Potential European Social Entrepreneurship

Fund – work with ESF and ERDF• Proposed a fully-fledged new ESF

investment priority for SE’s • Establish an EU level 90 million euro fund to

support hybrid funding • Mapping social enterprises • SE’s largely and untapped source of inclusive

growth and sustainable jobs

Social Enterprises in the UK - scale

• Third Sector Report in 2009 • More than 61,800 in the UK• Combined turnover of £27 bn• @5% businesses with

employees• Contribute £8.4 bn pa • Numbers are rising • Govt appointed social-

enterprise ambassadors

Social Entrepreneurship Monitor is a special report to the Global Entrepreneurship Monitor found :-

1.2M people or 3.2% of the working-age population classed as social-entrepreneurs cf. 6.2% in commercial entrepreneurship

Social entrepreneurs are more likely to be women, young and well educated (Harding 2006). Diverse group and in economically challenged/deprived areas

UK seen as having a developed SE sector relative to some EU colleagues

Structure of Social Enterprise in UK

• Social Enterprise Coalition (SEC) now Social Ent. UK

• UnLtd – a charity with a remit to support and develop the role of social entrepreneurs

• Major global accounting firms eg. PwC and SSE and Deloitte Social Innovation Pioneers Programme

• SSE• Expertise in investment

readiness and relevance

Social Enterprise Kitemark – trialled by RISE

Purpose and Beneficiaries of Standards?-Fair Trade Foundation set up in 1992

Investors Big Issue InvestSocial Investment BusinessSocial Equity FundSocial Impact BondsBig Society Capital – a social investment bank

Research and surveys56% saw turnover increase (2007/8) against only 28% of businesses in general

48% were expecting to grow compared with just 24% of small business in general

Scaleability ?

Social Enterprise Network Orgns in World

• Ashoka: Innovators for the Public• The Skoll Foundation• Omidyar Network• Schwab Foundation for Social

Entrepreneurship• Athgo• Root Cause• Canadian Social Entrepreneurship

Foundation• NESsT International• New Profit Inc• National Social Entrepreneurship Forum• Echoing Green• Social Enterprise UK

Conferences held eg. World Skoll Forum, SSE

Open sourcing social solutions and online communities eg. Social Edge

Procurement sites

Changemakers

Funding mechansims -Crowdsourcing eg. Zidisha-Venture funds

-Internet and social networking sites

Part of a bigger healthy thing• Development toward

– Improving communities– Improving life chances– a more connected society driven by

• Climate change - Environment• Internet• Excesses of failed models• Growing societal problems

• Education’s response: • Today a growing number of colleges and universities are establishing

programmes focused on training and education SE’s

Ben Cohen Values-Driven Business: How to Change the World, Make Money and

Have Fun

“Without question, the balance of power on the planet today lies in the hands of business. Corporations rival governments in wealth, influence and power. Indeed, business all too often pulls the strings of government. Competing institutions, religion, the press, even the military play sub-ordinate roles in much of the world today. If a values-driven approach to business can begin to redirect this vast power toward more constructive ends than the simple accumulation of wealth, the human race and Planet Earth will have a fighting chance.”

The Reality of Rights – May 2009• Corporate Responsibility Coalition commissioned the

London School of Economics

“the activities of transnational enterprises can promote economic development and generate wealth and prosperity, thereby enhancing the realisation of a broad range of economic and social rights. On the other hand, there is no doubt that they can and do perpetrate human rights abuses affecting both workers and communities in many of the host countries in which they operate around the world.”

Sir Richard Branson

• Predicted a ........

“sea change from the way business was always done, when financial profit alone was the driving force”

Tony Manwaring...CEO, Tomorrow’s Co.

• Characteristics of social enterprises are:-

“essential to the new organisational forms we will have to develop to cope with the challenges of a shrinking world”

Social enterprises as catalysts; Reed Paget, Belu Water “they challenge the traditional businesses to come up with

environmentally or socially friendly alternatives”“encourage the battle between big businesses and entrepreneurs as

it will benefit society and the environment”

David Bornstein... How to change the world: Social entrepreneurs & the Power of New

Ideas

“Over the past century, researchers have studied business entrepreneurs extensively...In contract, social entrepreneurs have received little attention. Historically, they have been cast as humanitarians or saints, and stories of their work passed down more in the form of children’s tales than case studies. While the stories may inspire, the fail to make social entrepreneurs’ methods comprehensible. One can analyse an entrepreneur, but how does one analyse a saint?”

“An idea is like a play. It needs a good producer and a good promoter even if it is a masterpiece. Otherwise the play may never open, or it may open but for the lack of an audience, close after a week. Similarly, an idea will not move from the fringes to the mainstream simply because it is good; it must be skillfully marketed before it will actually shift people’s perceptions and behaviour.”

Why here?

• Social entrepreneurship provides a unique opportunity for researchers from different fields and disciplines to challenge and rethink central concepts and assumptions (Mair and Marti 2006)

Academics/Institutions involved Andreas Heineke – Danone Chair of Social Business at EBS University,

Weisbaden, Germany– tolerance, open dialogue and exchange – Dialogue in the Dark social-franchise system– Empathy/tolerance & greater public understanding– Focus on potential not deficiency, ability not disability– Rethink bus. educn & redesign business behaviour

Veroniek Collewaert – Asst Prof. Of Entrepreneurship, Maastricht University “SE is increasingly relevant and something we should be stimulating and helping”

Professor Michael Gordon – University of Michigan – Design your life; change the world

Skoll Centre for Social Entrepreneurship at Said Business School at Oxford Univ

Academics involved Paul C. Light – Professor at New York University’s Robert F. Wagner School of Public Service and

author of “The Search for Social Entrepreneurship”New Insights 1. SE’s are NOT like other high achievers – they make deliberate decisions to solve social

problems, rather than simply stumbling into their work by accident or circumstance. Driven by challenge, unshakeable optimism & commitment

2. SE’s entrepreneurial ideas are BIG....greatest ideas can start small but eventually break the social equilibrium. Most research focuses on imagination, invention and launch but IMPACT requires scaling up, diffusion, sustained pressure and navigation of the “ecosystem of change”.

3. Opportunities for grand change come in waves – history shows this in specific punctuations or focused periods - experimentation drives the hope for widespreaad change

4. Socially entrepreneurial orgn’s are built to make change – they are relatively flat, singularly focused on the idea of change and often inexperienced in administration and bureaucracy. Little appetite for academic research and clear that older orgn’s can change or spin out SE’s

Tried truths I. SE’s do not always act alone – teams produce improved resultsII. Older organisations can nurture social entrepreneurship eg. Univ’s

EFMD Conference

• Whether here by accident or design?

• Make the most of the opportunity

• Enjoy