Social Entrepreneurship: Introduction and Types

Introduction to Social Entrepreneurship

Social entrepreneurship can be defined as the process of doing business for a philanthropic cause with a purpose to maximize profits while extending the positive impact on a particular social issue. At the most fundamental level, social entrepreneurship is simply doing business for a good cause. It might also be referred to as altruistic entrepreneurship.

Social entrepreneurs merge business concerns and social problems in a way that benefits those who are involved in the cause. In this, individuals or institutions don’t define success solely in terms of profit. For social entrepreneurs, success means making the world a better place. However, there are varying views of what constitutes a social entrepreneurship. Some people assume that the term only refers to companies that make profits and work to solve a specific issue by selling something to customers. Others argue that social entrepreneurs are business owners who use grant or government funds to solve a social problem.

Types of Social Entrepreneurship

Social entrepreneurship is a broad term that encompasses a wide range of organizations. Here are four popular types of social entrepreneurship to help explain how it often manifests.

1. Cooperatives 

A cooperative, such as a community grocery store or a credit union, is a corporation that operates to serve its members by meeting their social, economic, and cultural needs. Cooperative entrepreneurship seeks to bring creativity, innovation, and strategic management for cooperative society. Arla Foods, Ag Processing Inc., Amul etc. are some cooperative businesses.

2. Social Firms

Social firms are companies that offer job opportunities to groups of people who face major disadvantages in the labor market, such as the disabled. It is also referred to as ‘Social Enterprise’. Fare Start, Bambike, Taclob, The Farmer etc. are some examples of social firms. 

3. Socially responsible companies

Socially responsible companies are businesses that conduct day-to-day operations in line with a social mission. For example: 

  • Patagonia creates repairable products from socially responsible sources.
  • Classy works to achieve carbon neutrality.
  •  The World Bank group has the ultimate goal of eradicating poverty.

4. For- Profit Businesses with Social impact

Profit-driven companies promote social causes through donations and public recognition. For instance, Warby Parker donates glasses and other health supplies to those in need.

How is Social Entrepreneurship different?

Social entrepreneurship varies from conventional entrepreneurship in several disciplines. The purpose that a typical entrepreneur hopes to accomplish, is a key way to differentiate him/her from a social entrepreneur. While the typical entrepreneur seeks to develop a product, service, or process for which a customer will pay, the social entrepreneur seeks to develop a product, service, or process from which society will benefit. In essence, conventional entrepreneurs seek to create economic value, while social entrepreneurs seek to create social value.

Furthermore, since social entrepreneurs are addressing problems of the world, the results of their success may be more rewarding and self-satisfying. Success of the business can mean more money for investors, for social entrepreneurship, success can mean saving lives, making impact — and fundamentally changing the environment.

Social entrepreneurs’ work is therefore distinct from that of civil society organizations. Although philanthropists, social advocates, and non-governmental organizations (NGOs) all work to create social good, they do so in different ways.

Philanthropists and social activists use their power to generate social value, whether through financial donations, political clout, or public pressure. NGOs use existing goods, programs, or processes to generate social meaning. Social entrepreneurs, on the other hand, go above and beyond: They add value to society by developing creative solutions that create a completely new and improved status.

Real Life Social Entrepreneurship

SEKEM - Wikipedia

With a name that means “vitality from the sun,” this Egyptian business has certainly lived up to its promise by promoting social, personal, and environmental growth on a continuous basis. Since the establishment in 1977, the founder Dr. Ibrahim Abouleish, a pharmacologist by profession , has

  1. Developed medicinal, herbal, gastronomical, and aesthetically pleasing products to meet the needs of its customers.
  2. Improved the environment through biodynamic farms.
  3. Built an educational establishment for children to emphasize creativity and analytical thought.
  4. Instituted a healthcare center devoted to holistic medicine.

  • Amul
St Moritz Ice Cricket | Amul

Amul was established in 1946 as a response to unequal milk trade practices in India, empowering local and oppressed farmers to form cooperatives, independent of trade cartels. The Amul cooperative model was so popular that it was eventually replicated all over India in 1965, thanks to the notable assistance of Tribhuvandas Patel and Verghese Kurien. Amul has since

  1. Produced excellent value for money food products for customers
  2. Created a lucrative source of income for local dairy farmers in India

  • Fifteen
Jamie Oliver's Fifteen | JRF

Chef Jamie Oliver founded Fifteen in 2002 as an ambitious attempt to provide deprived youths (aged 18-24) with a means of creating better futures for themselves through the art of good food. The restaurant was named after the 15 young people who began their apprenticeships through this program. Fifteen has had the following since its inception:

  1. Delivered delicious Italian food to patrons and opened two other restaurants in Amsterdam and Cornwall
  2. Trained 220 young locals in the art of cooking and hospitality and inspired many of its graduates to pursue successful careers in the restaurant business
  3. Reinforced the value of local produce and cooking techniques

  • Ladakhi Women’s Travel Company

The Ladakhi Women’s Travel Company is a travel agency named after Ladakh and composed of female trekkers and travel guides. Ladakh is one of the most beautiful and interesting places in northern India. Thinlas Chorol, an experienced Ladakhi trekking guide, created it in 2009, defying trekking industry norms that heavily favor Ladakhi men. In recent years, the Ladakhi Women’s Travel Company has:

  1. Organized educational and ecologically friendly tours, treks and homestays for travelers and tourists
  2. Inspired Ladakhi women to prove that they are equally talented in serving as tour guides in their hometown
  3. Encouraged local economic growth by allowing women to find work within Ladakh

  • Jaipur Rugs
Jaipur Rugs

Jaipur Rugs started its journey from Jaipur, India. It is now an Atlanta Georgia based company which primarily focus on manufacturing high-quality and socially responsible floor coverings. This company, founded in 1978 by NK Chaudhary, elevated the art of knotted carpet weaving by nurturing it at the grassroots level and empowering local artisans by directly linking them to the global market. So far, Jaipur Rugs has:

  1. Produced breathtaking, well-crafted handmade rugs for discerning customers
  2. Sponsored health, literacy, vocational, legal, financial and entrepreneurial initiatives to inspire progress in communities where their artisans work and live
  3. Continued to connect gifted rug makers to consumers
  1. Produced breathtaking, well-crafted handmade rugs for discerning customers
  2. Sponsored health, literacy, vocational, legal, financial and entrepreneurial initiatives to inspire progress in communities where their artisans work and live
  3. Continued to connect gifted rug makers to consumers

Article By: Saurav Giri


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