What Is Social Entrepreneurship?

Over the past few weeks I have been having some great conversations about social entrepreneurship with Zoltan Acs, Prof. at GMU. The area is seeing a lot of activity and research inquiry. The question of what social entrepreneurship is, is far from being answered. (Acs answer is different from the one below)

Below is an excerpt from Tina Seelig’s CreativityRulz Blog. Seelig is the executive director of the Stanford Technology Ventures Program at Stanford University School of Engineering (a legendary institution in campus entrepreneurship).

So, what differentiates a social entrepreneur from a plain old vanilla entrepreneur? I must stay that it isn’t clear to me…. To loosely quote Carl Schramm, president of the Kauffman Foundation, when he spoke at Stanford last year, “all entrepreneurship is ‘social’ because at a minimum it generates jobs and stimulates the economy.” Given that as a baseline, companies can be socially responsible in an endless number of ways. If a company has family friendly policies, it is socially responsible. If a company recycles used materials and installs solar panels on the roof, it is socially responsible. If a company makes medical products that save lives, it socially responsible. If a company makes energy efficient cars, it is socially responsible. A company certainly does not have to be a not-for-profit to be socially responsible.

I would argue that people use the word “social” entrepreneurship because they don’t always know what entrepreneurship is… The way we teach it, entrepreneurship is about identifying problems and solving them by leveraging scarce resources. It means creating value, where value can be measured in a wide range of ways. It is extremely limiting is you define value only as making lots of money.

5 thoughts on “What Is Social Entrepreneurship?

  1. Good question. I use the phrase a lot, you make me realize I haven’t clearly defined it. I distinguish social entrepreneurships from nonprofits because it supports itself from its own revenues rather than donations. I distinguish it from other entrepreneurship because its offering is motivated by and includes solutions to social problems such as unequal distribution of wealth and opportunity and environmental deterioration, etc. Thanks for bringing this up. Tim

  2. In my work with Zoltan Acs we have been ‘agnostic’ regarding the firms legal status and focused much more on intent;

    for profit firms can have a social impact goal first and foremost.. that is what makes then ‘social’ ventures (another new word that is not yet defined)…

    what we were calling ‘commercial entrepreneurs’ are focused on returns (financial) first and social impact later (though social impact can be enormous — from ford to gates)…

    this then led zoltan and I to discuss philanthropic entrepreneurs (the US is and has been the most dynamic philanthropic market in the world); many of the greatest philanthropic (social entrepreneurs) actions came out of the wealth and vision of commercial (or traditional) entrepreneurs….

    Zoltan is doing some good work on this front and has uncovered a nice group in and around GMU that is probing the concepts of social entrepreneurship & social entrepreneurs. I will post more as I learn more.

  3. John

    I did a blog post a while back posing the same question. One of the most interesting things about this question is how it has revealed the confusion about what an entrepreneur is. I thought all the confusion was around the new qualifier “social”, when in reality, the confusion is every bit as much about the definition of an “entrepreneur”. This is mostly because people who have always had a negative image of what an entrepreneur was are trying to reconcile in their minds that an entrepreneur can be a good thing, but this also simply has to do with a common definition that include the possibility of all the different motives that drive entrepreneurs. This is why defining “social entrepreneur” feels difficult. Draw a Venn Diagram with one bubble representing “social entrepreneur” and one bubble representing “entrepreneur – whatever reasonable definition for “social entrepreneur” you come up with – will place the “social entrepreneur” bubble completely within the “entrepreneur” bubble. The fundamental difference between a “social entrepreneur” and an “entrepreneur” is motive. Modify the current best definition of entrepreneur to include a series of different motives: social good, personal achievement, pride, fame, money, etc. and be done with this question.

    Also – just to be absolutely clear – “social entrepreneurs” have been around longer than the english language – I assure you. It feels ridiculous to say this, but I feel like it has to be said, because people think some new type of person has emerged. There may be a new movement to imitate and adopt best practices in business but that’s it. Innovation and entrepreneurship has never had any bounds, and just because the non-profit sector has become more innovative and popular, people think a “social entrepreneur” is something new. It’s nothing more than a slice of the pie of “entrepreneurs” segmented by motive.

  4. entrepreneurshipeconomist

    Yes–I too agree with the above.

    The WSJ article online.wsj.com/article/SB123879888700588243.html states, “The Kauffman Foundation, known to National Public Radio listeners and a few others as “the foundation for entrepreneurship,” is difficult to categorize, but its president seems to like it that way.”

    Indeed, that is what makes Schramm a great economist and socialist–his inability to use words that mean things. He has parlayed that talent into tranferring millions of dollars from an entrepreneur’s foundation into his own “too big/smart/indecipherable to fail” pocket. While Kauffman the man stood for something–for character, integrity, jobs, and wealth creation, under Carl’s leadership the Kauffman Foundation has come to stand for Carl’s indecipherable vanity press and legions of goupthink, Kauffman-funded bloggers–which is why it is an innovation free zone which refuses to fund entrepreneurs and innovators as the economy crashes and the government grows.

    This is what Schrammenomics does to the DOW: finance.yahoo.com/q/bc?s=%5EDJI&t=5y&l=on&z=m&q=l&c=

    This is what Schrammenomics does to college tutions, as Schrammenomics is the best economics that a fiat currency can buy: blog.cleveland.com/metro/2009/04/oberlin_college_breaks_50000ay.html
    http://www.kauffman.org/Details.aspx?id=116

    Scrhammenomics excels creating wealth by placing others in debt, while dumbing down and feminizing entreprneurship, rendering it as formless and indecipherable as the Orwellian Kauffman Foundation. In Orwell’s 1984, the slogans were “War is Peace, Freedom is Slavery.” At the Kauffman Foundation the sycophantic groupthinkers begin each day by kneeling before Carl, stating, “Entreprneurship is Larger Univeristy Administrations, Entrepreneurship is fuding mot entrepreneurs, but 6,000 papers on entreprneurship, Entrepreneurship is a Vanity Press Powered by a Foundation, Entrepreneurship is PR releases for Schrammenomics.”

    Small-souled Boomers such as Schramm would have done well in the Soviet Union, heading the Ministry of Entreprneurship. They killed true entrepreneuership and innnocation and recreated it in their own image. Empowered by the massive debt, a fiat currency, printing presses, wealth transfer to the rich’s foundations, TARP funds, condescdening words about the “delta of black males,” and Wall Street corruption, the Kauffman foundation’s endowment grew in a massive, unprecedented manner. Schramm saw an opportunity in this–“What if”–he realized, “I could harness the cash and strategically parcel it out to policy wonk socialists and hand-picked groupthink bloggers while promoting a vanity press and filling Kauffman with unthinking, sycophanitic supporters? Then my general indecipherability and lack of integrity, amplified by an honorable man’s estate, could garner me a Nobel Prize in Economics!”

    Schramm has created an Orwellian institution in which he dictates via fiat and personally profits immensely by flying around and attempting to take credit for entrepreneurship’s natural wealth creation with his intentionally opaque and indecipherable pamphlets/books, while simultaneously funding the bureaucratic forces/socialist MBAs who oppose entrepreneurship and prefer growing the state, soulless univeristy administrations, and student debt.

    You can read about Schramm’s loyal army of sycophanitic MBAs here: http://www.greenchange.org/article.php?id=3652 “The best and brightest led America off a cliff”

    Under his opaque leadership where words mean whatever he wants them to mean, the Kauffman Foundation has become a formidable Orwellian beast that divides its time between writing PR releases and furthering Schramm’s vanity press, while suppressing all deviations from the One True Way of Entrepreneurship–debt-glorifying, Schramm-glorifying Schrammenomics.

    Schrammenomics–“Making Entrepreneurship Safe For Keynsian Socialists”

    The WSJ article (puff piece) states, “On the theoretical level, Mr. Schramm, who started his own health-care company and merchant bank, believes that the foundation has a duty to foster an environment hospitable to entrepreneurship.” Yes–and that would be one in which entrepreneurs are funded, not socialistic univeristy administrators. An environment where foundation CEOs boast about their nameless “phantom” companies, backed by a $2.5 billion warchest used for phantom research and PR, is just not conducive to entreprneuership. And over time, the tyranny only increases as Hayek noted, as the dictator secures their position by offing all independent thinkers and actual entrepreneurs, creatingan empire based not on freedom and welath creation, but dependence–unthinking dependence on schrammenomics. While presidents are elected, it appears that the Kauffman Foundation presidency is a permanent appointment; just as long as one makes sure to fund clones and fill the ranks with policy wonk bloggers echoing the tyrant’s double-speaking, government-growing indecipherableness.

    Why does the WSJ article name Kauffman’s companies, but not Schramm’s?
    online.wsj.com/article/SB123879888700588243.html

    If anyone knows the names of Schramm’s companies, pelase do post!

    One of the games Kauffman plays is that it funds risk-free policy wonk sociliasts who condescend to entrepreneurs, translating entrepreneurship’s common sense and natural integrity into economist code-speak/doublespeak, killing the exalted spirit, rendering words useless, redefining entreprnmuership in tehir own indecipherable image, and creating dumbed-down, feminized bureaucracies and red tape, and then they fly Schramm in (first class of course) to lecture to the true entrepreneurs on how they need Kauffman’s help in transferring their technology. Rather than teaching innovators ownership and their natural rights, Kauffman teaches innovators that they are not good enough to own their innovations without the innovationless Kauffman MBA’s/socialists’s help. The innovationless Kauffman Harvard MBAs present their phantom research on what makes a good technology transfer program–risk-free, innovationless Kauffman/state bureaucrats. And they high-five and fly off to their next honorary dinner, as one gets a lot of invites to five course dog and pony shows when one sits atop a $2.5 billion endowment, flirting with university administrations all over the world, and now and then wiring them money when they agree to pen glowing PR pieces for Kauffman’s “schrammenomics(TM)” brand.

    The WSJ rpeorts, “Finally, the foundation goes out of its way to support minority entrepreneurship. Mr. Schramm doesn’t use any social-justice lingo to explain the program, but reverts to a kind of charming nerd-speak. He says that after a lot of analysis, Kauffman has found that there is “the greatest delta among black males.” ” Well, why doesn’t Schramm step down form his vanity press and give his job and Kauffman’s funds to those more deserving?

    How charming! He used the word Delta! Our Savior has arisen, and now entrepreneurship can empower the people!

    Indeed, when Schramm steps down and Kauffman’s capital is reallocated to support entrepreneurs, instead of doublespeaking anit-economists, 1,000 flowers will bloom.

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