Can you tell us a bit about the history of social entrepreneurship. Is this a modern invention, or has it always existed?
Social Entrepreneurship, like traditional entrepreneurship, has been around since the dawn of capitalism, it just wasn’t called that. “Social Entrepreneurship” as it’s known today has gained attention as people have been labeled as social entrepreneur, based on the types of businesses they’ve started with multiple bottom lines (i.e. financial, as well as social, environmental, spiritual, etc.).
Why do you think social entrepreneurship has become so popular in the last decade? Are there any economic, social, or cultural reasons?
It’s become a buzz word and as more and more people have identified themselves as social entrepreneurs and found a home in a named industry, it’s gained wider acceptance. Americans in particular are fairly philanthropic by nature and have had a long history of starting new enterprises that aim to tackle a social problem not being adequately addressed by the free market or government. Social Entrepreneurship as a domain provides these entrepreneurs with resources to information and the ability to learn best practices.
The USA seems to have a high concentration of social entrepreneurs. Is this an American concept? What other countries seem to be leading in this area.
I don’t believe one could argue that it is an “American” concept, although some of the foremost experts who have popularized the concept have done so from the U.S. (e.g. Bill Drayton from Ashoka). U.S. universities as a whole did however seem lead the way in offering social entrepreneurship courses and programs. Also, Americans are culturally entrepreneurial in general and prone to philanthropy and volunteerism – the combination of these is perfect for the growth of a field known as “Social Entrepreneurship”.
Can you give us an example of a successful entrepreneurship. What are the earmarks of success?
Social entrepreneurs measure success in different ways, depending on the mission of the organization. Some examples might be: the amount of money raised without donations, a new technology invented, number of people reached or served, new programs launch, a quantifiable reduction in some negative market function (i.e. CO2 or methane emissions, child injuries or fatalities), quantifiable increase in some positive market enhancement (increased percentage of literate women or more registered women-led businesses), etc. A social entrepreneur might consider him/herself successful if they invented a new technology to detect and destroy old landmines and fewer children were injured, or they devised a newer and safer home heating system that low-income families can afford and fewer children were burned.
What are the biggest of challenges social entrepreneurs face?
Funding. Social entrepreneurs are never short on support from others who think their idea is important because of the impact they would make in people’s lives. The tough part is getting seed capital to launch the business, especially if the business in a non-profit. Venture capitalists and private equity investors are primarily interested in traditional, for-profit businesses. There are Social Venture Capitalists, but they are few and far between and there is a lot of competition from many social entrepreneurs for their funding. Banks also traditionally lend to traditional, for-profit businesses because of the tangible financial return they can expect. Funding is one aspect where we have a ways to go in the field of social entrepreneurship. Social businesses that earn revenue have an easier time getting funding that non-profits. Non-profits however can seek donations and grant funding, but they are always looking for the next disbursement and constantly fund raising, and therefore vulnerable to survival.
MBA schools seem to be offering more courses relating to social entrepreneurship. What are the biggest challenges business schools face in developing this curriculum. How does having an MBA help?
The problem MBA programs have with social entrepreneurship programs and course offerings lies in the financial return on investment for the student. Students are extremely interested in social entrepreneurship as a topic or as a long-term career goal. However, because of the cost of their MBA program or the student loans they are often facing upon graduation, they are often tempted to pursue stable employment working for someone else, rather than start a new social enterprise where seed capital and funding can present uncertainties
Interview with Amanda Bullough, Ph.D. Assistant Professor of Entrepreneurship Thunderbird School of Global Management. She discusses her take on social entrepreneurship, and its current popularlity.
Published in
Social Entrepreneurship
The TopMBA Connect team is located in New York City, a key hotspot for social entrepreneurship, technology and the international business community.