Social Entrepreneurship: Characteristics, Types, & Processes PDF

SOCIAL ENTREPRENEURSHIP CHARACTERISTICS, TYPES, AND PROCESSES FOR THE CONSTRUCTION OF SOCIAL INNOVATIONS  Social Innovation Social innovation is innovation that leads to a "change in social relations, involving new ways of doing, organising, knowing and framing." Aveli...

SOCIAL ENTREPRENEURSHIP CHARACTERISTICS, TYPES, AND PROCESSES FOR THE CONSTRUCTION OF SOCIAL INNOVATIONS  Social Innovation Social innovation is innovation that leads to a "change in social relations, involving new ways of doing, organising, knowing and framing." Avelino et al. (2019)  Central Elements of Social Innovation Satisfaction of a Need: This involves recognizing social issues such as poverty, education gaps, healthcare access, or environmental challenges. Innovation of the Solution: It involves developing new or improved approaches, products, or services that effectively tackle identified needs. These solutions must be more effective, efficient, or sustainable than existing alternatives. Change of Social Structures and Relationships: Social innovations often challenge and seek to transform existing social structures and relationships. This can involve addressing systemic inequalities, changing power dynamics, or fostering new forms of collaboration. Increase of Society's Capacity to Act: This can include building skills, fostering leadership, and enhancing networks that enable people to address their own challenges. four key elements: satisfaction of a need, innovation of the solution, change of social structures and relationships, and the increase of society's capacity to act.  CHARACTERISTIC AND DIFFERENCES OF SOCIAL ENTREPRENEURSHIP SOCIAL ENTREPRENEURSHIP OFTEN STARTS THEIR VENTURE OR INITIATIVE AFTER RECOGNIZING THE PREVALENCE OF A CERTAIN PROBLEM IN SOCIETY AND CREATING A SOLUTION TO ADDRESS IT USING THEIR ENTREPRENEURIAL SKILLS. THEIR OVERALL GOAL IS TO MAKE A POSITIVE SOCIETAL CHANGE WHILE CREATING SOCIAL CAPITAL TO FURTHER THEIR OBJECTIVES. A SOCIAL ENTREPRENEUR IS AN INDIVIDUAL WHO STARTS AN ORGANIZATION OR ENTERPRISE TO SOLVE COMMUNITY-RELATED ISSUES LOCALLY OR GLOBALLY.  CHARACTERISTIC OF SOCIAL ENTREPRENEURSHIP CURIOSITY Social entrepreneurs must nurture a sense of curiosity about people and the problems they face. The best social entrepreneurs seek to truly understand the needs and desires of the people they serve. INSPIRATION In order to design effective solutions, social entrepreneurs must be inspired by the people and problems they encounter. Inspiration motivates action and helps social entrepreneurs tackle challenges. RESOURCEFULNESS In the world of social entrepreneurship, key resources, such as human and financial capital, can often be scarce. Successful social entrepreneurs know how to leverage the resources at their disposal and develop innovative methods to overcome obstacles.  CHARACTERISTIC OF SOCIAL ENTREPRENEURSHIP PRAGMATISM Changing the world takes time, effort, and experimentation. While visions for massive social change may provide their inspiration, experienced social entrepreneurs know that they need to take small steps in pursuit of their goals. ADAPTABILITY Social entrepreneurs must remain open to solutions. This includes knowing when to pivot and change their strategies if their initial methods do not succeed. Adaptability and flexibility are integral in the development of early-stage social enterprises. OPENNESS TO COLLABORATION Social entrepreneurs need to stay open and attentive to potential partnership and collaboration opportunities. In many cases, collaborative initiatives and joint-ventures can achieve social/business goals much more effectively than solo endeavors.  CHARACTERISTIC OF SOCIAL ENTREPRENEURSHIP RESULT ORIENTED Lastly, social entrepreneurs who are results-oriented focus heavily on the impact their ventures create. They set clear, measurable goals and maintain a solid commitment to accountability, ensuring their actions lead to tangible, impactful outcomes. By addressing social issues with precision and dedication, they create meaningful change and inspire others to contribute positively. RECOGNIZE THE ORIGINS OF THE CONCEPT OF ENTREPRENEURSHIP AS WELL AS ITS GENERAL FEATURES. WHO WAS JOSEPH SCHUMPETER, AND WHAT WAS HE KNOWN FOR? Joseph Alois Schumpeter (1883-1950) was an Austrian-trained economist, economic historian, and author. Schumpeter is best known for introducing the “concept of entrepreneurship”.  RECOGNIZE THE ORIGINS OF THE CONCEPT OF ENTREPRENEURSHIP AS WELL AS ITS GENERAL FEATURES. The term ENTREPRENEUR is a French word, and is derived from the French word “enterprendre”. It means “to undertake”. It is commonly used to describe an individual who organizes and operates a business or businesses. ENTREPRENEURSHIP is the process of designing and running a new business venture for earning profits. It is a process that brings innovation that is new ideas, products, and services in the market. Entrepreneurship is the ability to create, manage and operate a new business and bears all of its risk with a view to earn profits. A person who develops new business and undertakes all risks and challenges associated with it is termed as ENTREPRENEUR.  ORIGINS OF ENTREPRENEURSHIP Early Trade and Commerce (Ancient Civilizations) The idea of entrepreneurship can be seen in early civilizations where traders and merchants took risks in commerce. These early forms of entrepreneurship focused on buying, selling, and bartering goods across regions and cultures. Middle Ages (Feudal Europe) During the Middle Ages, the concept of entrepreneurship was tied to guilds and craftsmanship, where merchants and artisans operated small businesses. Entrepreneurship was limited due to the constraints of feudal systems and rigid social hierarchies.  ORIGINS OF ENTREPRENEURSHIP 17th and 18th Centuries (Rise of the Term "Entrepreneur") The French economist Jean-Baptiste Say is often credited with popularizing the term "entrepreneur" in the early 19th century. He described entrepreneurs as individuals who shift economic resources from areas of low productivity to areas of higher productivity. Before Say, in the 17th century, Richard Cantillon, an Irish-French economist, described entrepreneurs as risk-takers. He emphasized their role in the economy as those who assume risk by buying at certain prices and selling at uncertain prices.  ORIGINS OF ENTREPRENEURSHIP Industrial Revolution (18th–19th Century) The Industrial Revolution marked a significant shift in the concept of entrepreneurship. Innovation, technological advancements, and industrialization became central to entrepreneurial activities. Entrepreneurs like James Watt (steam engine) and Henry Ford (automobile assembly line) played transformative roles in this period, bringing new technologies to market and reshaping industries.  ORIGINS OF ENTREPRENEURSHIP 20th Century (Modern Theories and Globalization) The 20th century saw the development of modern economic theories of entrepreneurship. Joseph Schumpeter, an Austrian economist, introduced the concept of "creative destruction," emphasizing that entrepreneurs disrupt existing markets with innovations and create new industries. Entrepreneurship expanded globally as economies became interconnected, with startups and entrepreneurial ventures becoming central to economic growth.  4 TYPES OF ENTREPRENEURSHIPS Small business entrepreneurship Scalable Start-up Entrepreneurship Large Companies or Big Business Entrepreneurship Social Entrepreneurship Differences of Traditional Entrepreneurship and Social Entrepreneurship Traditional entrepreneurship often focuses on creating innovative products or services that appeal to the market and generate revenue. While social entrepreneurship also values innovation, the focus lies on creating solutions to social and environmental problems. Core Elements of Social Enterprises 1. Social Mission 2. Sustainable Revenue Model 3. Impact Measurements 4.Innovation 5. Stakeholder Engagement 6. Ethical Practices  Social entrepreneurs play a vital role in bringing attention to social problems by: 1.Raising Awareness: They highlight issues through their initiatives, campaigns, and storytelling, increasing public understanding and engagement. 2.Finding Solutions: They develop innovative approaches to tackle social challenges, providing practical examples of how to make a positive impact. 3.Mobilizing Communities: They inspire and involve communities to take action, fostering collaboration and collective efforts to address issues.  Social entrepreneurs play a vital role in bringing attention to social problems by: 4.Attracting Funding: By demonstrating the potential for social change, they attract investors and funding, which helps support their initiatives and amplify their impact. 5.Influencing Policy: They can advocate for systemic changes, influencing policies that address the root causes of social problems.  Social Enterprise Models ▪ A business model is a structure, design or framework that a business follows to bring value to its customers and clients. However, there are at least three measures of the success of a business model— its ability to generate profit for its owners, its ability to generate positive change in the world, and its ability to achieve a balance of profit and positive change. The first approach applies to traditional for-profit companies; the second approach applies to traditional charities; and the third approach (a balance between profit and positive change) applies to social enterprises.  Social Enterprise Models A social business model is a structure, design or framework that a social business follows in order to bring about a positive change while maintaining healthy financial returns. Yet despite sharing this basic framework, social entrepreneurs have a wide scale of viable social business models to choose from. In 2012 Wolfgang Grassi (aka W. Grassi) identified nine types of social business models. He began his analysis with three factors guiding any social business: the mission, the type of integration, and the target population. He then explored the way in which these three factors intersected with the three traditional categories of business (for-profit, not-for- profit and hybrids) to generate the nine specific types of social business models that any social enterprise could adopt.  9 BUSINESS MODEL The Entrepreneur Support Model This model of social enterprise (SE) sells business support services directly to the entrepreneurs in its target population. In other words, this type of SE helps entrepreneurs get their businesses off the ground. Support can come in the form of consulting services, training, microfinancing or technical support. Organizations that belong to this category may include economic development organizations, business development service organizations and microfinancers.  9 BUSINESS MODEL The Market Intermediary Model This type of SE generally helps their clients by marketing or selling their clients’ products or services for them. For example, an organization that helps struggling small farmers by marketing and to sell their crops for them would belong to this category. The Employment Model This type of SE provides their clients with job opportunities and job training. Revenue generated by those jobs pays for the SEs expenses and flows back into the services provided for those in need. Many youth and disabilities organizations adopt this model.  9 BUSINESS MODEL The Fee-for-Service Model The fee-for-service model is one of the most commonly adopted SE business models. The SE charges the customer directly for the socially beneficial services it provides. Many hospitals, schools, museums and membership organizations use the fee-forservice model to a greater or less degree. SEs in this category generally offer social services directly (as in the fee-for-service model) while focusing on low-income clients. Hospitals and healthcare programs that offer their healthcare services to low-income patients often adopt this model.  9 BUSINESS MODEL The Cooperative Model This is one of the most widely recognized categories of SE. The cooperative is generally a feebased membership organization that provides member services to a group that shares a common need or goal. The cooperative is owned and operated by its members, who both run the cooperative and receive the benefits of its success. Two of the most well-known types of cooperatives include credit unions and employee-owned businesses (“co- ops”).  9 BUSINESS MODEL The Market Linkage Model SEs that serve as brokers for their clients often adopt this model. These SEs focus on building relationships and otherwise connecting their clients with markets for their clients’ products and services. However, unlike SEs adopting the market intermediary model, these SEs generally do not market or sell their clients’ products and services for them. Many trade associations adopt the market linkage model.  9 BUSINESS MODEL The Service Subsidization Model This type of SE funds social programs by selling products or services in the marketplace. Service subsidization is one of the most common SE models, as almost any SE can adopt it. In contrast to organizational support SEs (see below), service subsidization SEs integrate their internal business with external social programs. For example, a law firm may use the revenue generated from the firm’s regular law practice to fund a social program that provides free law services to those in need. The firm may run the program out of their own offices and may provide the free law services themselves.  9 BUSINESS MODEL The Organizational Support Model This type of SE, like a service subsidization organization, sells products or services to fund social programs. However, the social programs they fund are part of a separate, parent organization. In other words, an organizational support SE raises funds for a parent non- profit that, in turn, runs the social programs the SE wishes to support. Thank you for Listening!