FormalPara Definition

Social entrepreneurship is the innovative and resourceful pursuit of opportunities with the primary strategic intent to achieve a particular improvement in social or environmental conditions.

Social entrepreneurship is the innovative and resourceful pursuit of opportunities with the primary strategic intent to achieve a particular improvement in social or environmental conditions. On some accounts, it also requires the use of business methods and perhaps a profit objective alongside the social objective, but this is an area of debate.

The concept entered the academic lexicon in the 1990s, picked up from the ‘first-order theorizing of practitioners’ (Schultz and Hatch 2005). The academic literature reflects both the agreements and disputes inherited from the practitioners. They tend to agree that social entrepreneurs: (1) deliberately aim to create positive societal impact as a primary objective; (2) can use different legal forms of organization (non-profit, for-profit, or some mix) to achieve this objective; and (3) behave in ways that are appropriately described as ‘entrepreneurial’. The main element of dispute revolves around the meaning of ‘entrepreneurial’.

Innovation, Enterprise, or Both

The language of ‘social entrepreneurship’ came out of two overlapping schools of practice and thought. One school emphasizes innovationfor a social purpose, in the spirit of Schumpeter, Joseph (1883–1959). The other school emphasizes enterprises created for a social purpose, namely starting and running a social-purpose business (even if it is legally a non-profit). Both schools settled on the term ‘social entrepreneurship’ in the 1980s and 1990s.

The social innovation school emerged from the work of Michael Young, founder of what is now the Young Foundation (see Mulgan 2006), and Bill Drayton, founder of Ashoka: Innovators for the Public (see Bornstein 2004). Many academics have embraced this emphasis on innovation. This approach fits well with the views of Drucker (1985), who wrote about innovation and entrepreneurship throughout society, not just in the economy. While Schumpeter never wrote about social entrepreneurship, Richard Swedberg (2009) has proposed a Schumpeterian account, drawing on comments about ‘non-economic entrepreneurship’ in the 1911 edition of the Theory of Economic Development. Swedberg’s account includes a mission to achieve social change, innovation in the form of certain kinds of new combinations, resistance to those changes, with ‘profit’ – defined as achieving the desired social change, and a macro-level process of creative destruction that contributes to the evolution of society. The innovation school has evolved to focus on effective strategies for lasting social change (see Martin and Osberg 2007).

The social enterprise concept grew out of the drive for non-profit organizations to find new, reliable sources of revenue (Skloot 1983) and a push to position social problems as business opportunities, led by William Norris, the founder of Control Data (see Worthy 1987). These agendas merged to encompass any social-purpose business ventures, regardless of legal form. Interestingly, several early social enterprise practitioners who did the first-order theorizing later took positions at major universities: Skloot at Duke, Boschee (1995) at Carnegie Mellon; Shore (1995) at NYU; Emerson at Harvard, Stanford and Oxford (Emerson and Twersky 1996). The first issue of the Social Enterprise Journal laid out a research agenda for this school (Haugh 2005). The enterprise school has evolved to encompass market-based solutions to social problems and new legal forms of organization, helping to create the ‘community interest company’ in the UK and inspiring ‘benefit corporation’ legislation in the US.

The tensions and overlaps between these two schools have enriched discussions. Some (e.g., Elkington and Hartigan 2008) have integrated elements from both schools. Innovative enterprises designed to achieve significant social impact with minimal or no dependency on outside subsidies are particularly appealing in practice, and they pose intriguing research questions about strategies for aligning social benefits and economic wealth creation (Dees and Anderson 2006).

Academic Response

A number of academic centres have been created to build bridges between academic researchers and active practitioners in this area. Two of the most prominent are the Skoll Centre for Social Entrepreneurship at Oxford and the Center for the Advancement of Social Entrepreneurship at Duke. Two academic journals are now dedicated to the field, the Journal of Social Entrepreneurship and the Social Enterprise Journal. The Stanford Social Innovation Review covers social entrepreneurship among other topics, but in a more practitioner-oriented way. The Ashoka University Network has become a general resource for interested academic institutions.

Research Issues

Much of the early academic work has been concerned with definitions and typologies (see Zahra et al. 2009). This work has confirmed that social entrepreneurship generates a number of fruitful research topics distinct from those raised by commercial entrepreneurship (see Anderson and Dees 2006; Austin et al. 2006), such as identification of opportunities for social impact, social innovation strategies, designing business models that align with social impact, resources strategies for social ventures, the effects of legal forms, financing, governance models on social venture strategies, competitive and collaborative strategies for social entrepreneurs, methods of measuring social impact and linking this to strategic decisions in a timely way, alternative strategies for scaling social impact drawing on resource-based and capabilities-based strategy literatures, contextual and institutional factors affecting social entrepreneurship and more. The literature is growing rapidly. Select examples at the time of writing include Christensen and colleagues (2006), which applies a disruptive innovation construct to social entrepreneurship; Zahra and colleagues (2008), which analyses how key attributes of social opportunities affect decisions regarding timing and geographic scope of operations; Mair and Marti (2009), which illustrates how social entrepreneurs can fill institutional voids; and Nicholls (2010), which maps the evolving landscape of financial resources available to social entrepreneurs.

The overlap with corporate strategy appears to be increasing. Austin and colleagues (2006) have argued that it is advantageous for corporations to engage in social entrepreneurship in response to increasing expectations for social engagement. Porter and Kramer (2011: 65) echoed this theme in their call for companies to create ‘shared value’ – economic value that also benefits society, noting that social entrepreneurs ‘are often well ahead of established corporations’ in this regard (p. 70). Companies wishing to operate profitably in what Praahalad and Hart (2002: 54) have termed ‘the bottom of the pyramid’ may benefit from exploring social entrepreneurial business models in developing economies (Mair and Schoen 2007). Drayton and Budnich (2010) have argued that value chain partnerships between larger corporations and social entrepreneurs can open up new strategic options.

See Also