Social enterprise has always been a contested subject matter. From its disputed roots to its complete lack of a consensus definition, the term expels a complex aura—definition changes by executive, company, and even country. Understanding the complex but revolutionary nature of the social enterprise field, we knew we wanted to make a comprehensive standard for all social enterprise information.
A Brazen Definition on Social Entrepreneurship
As broad in scope and scale as a social enterprise, a field needs to be clearly defined. Despite worldwide defining inconsistencies, we have constructed a definition that fully encapsulates what we believe is the universal nature of social enterprise. We perceive two pillars that support the social enterprise field. Both equal in importance, one without the other would see a failure in any social enterprise endeavor.
Our definitive perspective on social enterprise is that it consists of a bold vision and thoughtful organization designed not only to be financially successful but to impact our communities in positive and sustainable ways. These two core tenets serve as the foundation for all of our endeavors as a corporation. These socially enterprising values are ingrained into all of our practices and services and should be essential components of any social enterprise project.
Alternative Angles on Social Entrepreneurship
Although we consider our definition an all-inclusive, broad-range explanation of social enterprise, alternate perspectives are immensely abundant. Practically, each major social enterprise organization and the active country has its thoughts and views.
Social Enterprise Alliance holds to a basic functioning definition of the social enterprise of “organizations that address a basic unmet need or solve a social problem through a market-driven approach.” The Alliance sees the development of a burgeoning social enterprise industry as the convergence between traditional non-profits becoming more entrepreneurial and traditional businesses integrating more social responsibility and sustainability into their endeavors. To learn more about their approach, visit https://socialenterprise.us/about/social-enterprise/.
Harvard Business Review stands by a unique hybrid model of defining social enterprise. Their publication is a blend of government intervention and pure business entrepreneurship that builds the foundation of the social enterprise industry. They credit this hybrid as the solution for too specific issues to merit legislation or private investment. They believe that the two keys to a sustainable social enterprise are actors involved and the technology used. To learn more about this two-pronged approach, feel free to peruse their article https://hbr.org/2015/05/two-keys-to-sustainable-social-enterprise.
Social Enterprise Europe encourages businesses interested in social enterprise to incorporate three specific tenants into their corporate philosophy:
- The amount it reviews the ethical standing of its goods, services, and production.
- It can clearly define the social purpose of its mission and provide detailed evidence for this positive social influence.
- The democratization of its corporate hierarchy.
Social Enterprise vs. Corporate Responsibility Programs
There is an important distinction to make when discussing social enterprise. Since it often leads to misconceptions in identifying social enterprise businesses accurately, this clarity is imperative. You must not confuse a corporation with responsibility programs for social enterprise business.
If a business wishes to help society, but only to improve its company’s corporate image, and in turn, foster a more significant profit, they are not a social enterprise. Although profit is an integral part of the social enterprise sector, it does not serve as the central motivator. That role belongs to social improvement.
Addressing the World’s Problems Through Social Entrepreneurship
A prominent perception of social enterprise is as a solution to the problems that plague the world. To better understand the value of a social enterprise, it is vital to fully grasp the exact issues they are combatting and the specific solutions that social enterprise provides. Although we will go into the gist of these ideas specifically, a fantastic source on this very subject is http://www.nesst.org/social-enterprise/.
The problems that would benefit from a social enterprise resolution are not limited to just the United States. Millions of people across the world are experiencing these cataclysmic difficulties. A lack of economic opportunity, fair compensation for labor, and access to essential goods and services form the basic structure of the conflict that social enterprise strives to combat.
With the right minds, ambitions, and resources, social enterprises can provide the solution. These include income opportunities for the impoverished, sustainability embedded in the resolution of their problem, and scalability so that answers can be applied to multiple specific problems. Through these solutionary characteristics, social enterprise can combat the most pressing issues plaguing modern society directly.
Breaking Down Social Enterprise
The complexity of the perceptions of universal social enterprise plagues even what classifies as such. Naming conventions for social enterprise projects differ not only on a business/organizational level but from country to country. It is essential to address this discourse and clarify what may be confusing to newcomers in the industry.
Social Enterprise vs. Social Entrepreneurship (Is There Even a Conflict?)
The most debated terminology debacle in the social enterprise field is between the definitions of social enterprise and social entrepreneurship. For some, they are virtually synonymous; however, many organizations and governmental bodies of nations disagree.
To quote Social Enterprise Alliance discussing Asoka, “Asoka defines social entrepreneurs as ‘individuals with innovative solutions to society’s most pressing social problems’ who ‘find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to move in different directions.”
Essentially, Asoka believes that a social entrepreneur can be an independent variable, not needing a social enterprise at his backing. As Skoll Foundation and Stanford Social Innovation Review indicate, this very notion of individuality serves as one of the most substantial scores for the social enterprise/social entrepreneurship terminology debate.
The Czech Republic Perspective
On the country spectrum, the Czech Republic makes an exciting claim in this ongoing syntax conflict. They see an essential distinction between the terms social economy, social enterprise, and social entrepreneurship. The social economy encapsulates the entire network of private organizations that strive to help others through their business.
Social entrepreneurship refers to the development of private business endeavors to solve the social problems of unemployment, incoherence, and lack of action. On the other hand, a social enterprise is an individual subject of social entrepreneurship in the eyes of the law. This clearly defined but highly unorthodox perspective only amplifies the idea that there is no universal conception of this terminology.
The History of Social Enterprise
Even the lineage of the social enterprise industry is a subject of debate. Countless theories, beliefs, and historical developments jumble around in the cesspool of social enterprise ideology. Here, we have researched multiple perspectives and ideas on this origination to form a coherent, more understandable history.
Old Origins, New Sector
Social Enterprise is commonly perceived as a reasonably new economic sector within first-world nations. However, one particular institution can be seen working as a social enterprise practitioner over a century ago. In 1902, Goodwill began its current employment initiative. Hiring impoverished individuals, they could obtain the fair labor needed to give even more back to the community. This altruistic cycle still fuels the business today and reflects the foundation of the social enterprise we are familiar with today. For more information on this chapter in the social enterprise historical narrative, visit https://socialenterprise.us/about/social-enterprise/.
Social Enterprise UK sees the earliest signs of the social enterprise industry as almost a century before Goodwill’s mission development. In the 1840s, Rochdale, an institution, was established to provide exploited factory workers with cheap but quality food. They believe this would set the foundation for the United Kingdom’s social enterprise sector, which would burgeon roughly 150 years later. To learn more about Rochdale’s impact on the modern resurgence, visit https://www.socialenterprise.org.uk/Pages/FAQs/Category/FAQs.
Despite having contested historical origins, there are undoubtedly modern influences on the sector that played an imperative role in its development. One of the most notable is an Italian worker co-operative that lobbied for those recovering from disability to continue working at their jobs. This movement laid the foundation for the EMES, an important organization that we will elaborate on soon.
Perhaps the most central element of the modern success of a social enterprise is through the sources of the attention that the sector garnered. Social Enterprise Alliance cites the importance of Forbes and its mainstream media brethren in promoting the idea of social enterprise in their content. Social enterprise support from the White House Office of Social Innovation and Social Innovation Fund has also been paramount to the sector’s burgeoning in the United States.
Social Enterprise in Academia
Although not a particularly large academic subject area, social enterprise education has become increasingly common. Social enterprise education programs have been emerging throughout the world, not just in the United States and the United Kingdom.
The University of Asia and the Pacific in the Philippines’ School of Management recently introduced Social Entrepreneurship and Management. This class focuses heavily on social enterprise concepts and giving potential future social entrepreneurs the knowledge needed to start their own. A seminar titled Social Enterprises: Creating Wealth for the Poor only supplemented this course offering.
When taught in academia, social enterprise concepts borrow heavily from famous economic thinkers throughout modern history. Putnam, Marx, and Proudhon are just a few of the prominent influences in social enterprise education.
Social Enterprise Around the World
The very nature of social enterprise practically begs for globality. A plethora of countries around the world actively engages in social enterprise. It is not a question of whether this is an international phenomenon, but the variety in the form it takes around the world. From country to region, to continent, social enterprise qualifications and practices drastically vary.
Social Entrepreneurship in Australia
In recent years, Australia found itself challenged to quantify and qualify social enterprise endeavors in its country precisely. In 2009, a partnership was made between the Australian Centre for Philanthropy and Nonprofit Studies at Queensland University of Technology and Social Traders to combat this very dilemma.
The result of these efforts was an exact qualifier for involvement in the social enterprise sector. They concluded that to be a social enterprise, you must be driven by a mission with public or community benefit, be engaging in economic trade to accomplish the said mission, gain a majority of your income from this trade, and invest the majority of their income into this mission of social benefit.
This conclusive definition gave light to social enterprise activities working in almost all sectors of the Australian economy. Regardless of the size of the community or institution, social enterprise was seen on all levels of the Australian economy.
Social Entrepreneurship in The Middle East
No Middle Eastern nations classify social enterprise as a separate legal entity. This is because no Middle Eastern government has conclusively defined social enterprise in their country. In turn, most businesses that would commonly be perceived as social enterprises are registered as standard companies or non-profits.
Due to the very nature of the region, most social enterprise initiatives are centered around the development of human capital amongst the citizens of its various sub-regions and individual nations.
Social Entrepreneurship in South Korea
In South Korea, social enterprise has a legal foundation. The South Korean legislature passed the Social Enterprise Promotion Act in 2006 (putting it into effect next year). This act not only clearly defines social enterprise but provides definitive standards for every level of social enterprise activity. Further, the South Korean Ministry of Labor is required to re-establish a basic support plan for the social enterprises of the nation on a bi-decade basis.
Although South Korean social enterprise covers various social issues, the overwhelming majority of the sector is concerned with the creation of new jobs.