As we’ve noted before, a recent boom in social entrepreneurship is taking place around the world. The reason? Alain Fayolle, professor of Entrepreneurship at emlyon business school, explains “the current financial crisis and its global consequences have increased the need to position social questions at the heart of the global economy.”
Sanjeev Rao, expert at emlyon business school on “Mindset Shift and Social Innovation” and Senior Partner at Sattva, believes that the rise in social entrepreneurship is also due to the current generation of young people: Generations X and Y are actively seeking jobs which give them a larger sense of purpose and also have a wider societal value. The current economic, political and societal uncertainty has given them this desire for new meaning in their career and has encouraged them into social entrepreneurship. This would enable them to create a job which suits their values. As social entrepreneurs they can also address societal and environmental problems, and provide innovative solutions using market mechanisms.
Investment and support for social entrepreneurs is growing
It’s no surprise really that social entrepreneurship has surged in recent years, since its benefits are evident: it supports economic growth, drives innovation and addresses social and environmental challenges. Crucially, investors believe in social entrepreneurship – Morgan Stanley found that 72% of active individual investors believe that companies with good environmental, social and governance practices are better long-term investments. Governments are also catching on to the win-win situation of investing in social entrepreneurship and are actively seeking to support new startups. For example the UK currently offers a financial incentive in the form of tax relief for those providing social investment capital. This is set to unlock £480m worth of investment in the sector over the next five years, making the UK the most developed social investment market in the world.
As well as access to funds, social entrepreneurs need experienced and expert advice on this relatively new business model. Accelerators specialized in social enterprises are now emerging to meet that need. Climate Ventures 2.0 is a US accelerator focusing on climate-related innovation. Another example is incubator Seed Spot which supports anyone creating a product, service, or technology that improves lives or makes the world a better place.
While social entrepreneurs can work on a local or global level, they all benefit from networks and organizations which nurture social entrepreneurship; like global institution Ashoka. These organizations are fueling a social entrepreneurship ecosystem which will increase social entrepreneurs’ capabilities through a robust network of people, resources and ideas.
Social entrepreneurs are innovators
Professor Jo Barraket, who has conducted a comprehensive study of social entrepreneurship says the key factor driving today’s social entrepreneurs is their mindset: “They are amazing at turning their head sideways and seeing value in something no one else can see value in – and finding a business model to extract that value.” This innovative thinking is solving complex social and environmental problems, from small-scale sustainable businesses in developing nations, to global programs working on issues at a macro level. Social entrepreneurship is certainly no longer limited to developing nations.
Students of the Global Entrepreneurship Program study social entrepreneurship closely, as one of the four main pillars of entrepreneurship. This has led to some students creating social enterprises for their business projects. A recent social entrepreneurship project from program students was ‘Foreign Big Brother’, a TV show which highlighted the gap in education between rural areas and big cities in developing countries such as China. The concept began as the first semester’s European business project, and was developed with the aid of emlyon business school’s incubator, before being further developed and expanded throughout the second semester at Zhejiang University.
Global Entrepreneurship Program students have the opportunity to meet and network with current entrepreneurs throughout the program. They are also able to attend the World Entrepreneurship Forum, a world-leading think tank in social entrepreneurship that was created in 2008 by emlyon business school and KMPG France to develop economic and social entrepreneurship.
As the UK government’s latest policy on entrepreneurship states “ doing good and doing well [financially] are not incompatible”. Today’s social entrepreneur knows this, and aims to address demands that have not been met by the state or the commercial sector, through innovation and entrepreneurial skill. With governments increasingly under pressure, and more networks popping up which support social entrepreneurs, we can be sure that this business model is here to stay.