ISL453U-ENTREPRENEURSHIP
Chapter 5: Social Entrepreneurship
Introduction
One of the examples of entrepreneurship is social entrepreneurship, which we will examine in this chapter. Social entrepreneurship is a non-profit social entrepreneur action that aims to provide social benefits. The result is social enterprises.
The idea of entrepreneurship implies the creation of innovation and risk opportunities. This concept contains meaning for the economic and financial structure. The word social involves adapting to the solution of social problems rather than the understanding of profit maximization that underpins the entrepreneurship principle.
What is Social Entrepreneurship
Social entrepreneurship is the type of entrepreneurship that has as the primary goal to address pressing social challenges and meet social needs in an innovative way while serving the general interest and common good for the benefit of the community. In a nutshell, social entrepreneurship targets social impact primarily, rather than profit maximization in their effort to reach the most vulnerable groups and to contribute to inclusive and sustainable growth (Aisenberg et al.,2019, p.8).
Social entrepreneurs are similar in many ways to traditional entrepreneurs. For example, establishing new businesses, their contribution to socio-economic development, determining opportunities, being innovative and determined are considered among the characteristic features of these two types of entrepreneurs. However, the main difference between social entrepreneurs and traditional entrepreneurs is that they are passionate about solving social problems and creating social value.
The contribution of the word social to the concept in social entrepreneurship is listed below:
1. The output is social. 2. The core assets are forms of social capital. 3. The organizations they found are social. 4. Social entrepreneurs are often community entrepreneurs.
The contribution of the word entrepreneurship to the concept in social entrepreneurship is listed below:
1. Focus on needs. 2. In the context of personality traits. 3. Innovation and creativity.
Some standard features that social entrepreneurs looking for answers to social problems should pay attention to are as follows; (Sarikaya, 2010, p.39);
• Projects need to meet a real need, • A reliable and effective management team should manage the institutions established for this purpose,
• When a good model is created, there is an opportunity for economic reproduction, • Have financial resources to cover the periodic expenses of the developed project, • The results and benefits of the project should be shared with the public regularly and transparently.
Characteristics of Social Entrepreneurs
The characteristics of social entrepreneurs can be explained as follows:
1. They are change agents in the social sector. 2. They adopt a mission to create and sustain social value. 3. They recognize and relentlessly pursue new opportunities. 4. They engage in the process of continuous innovation, adaptation, and learning. 5. They act boldly without being limited by resources currently in hand. 6. They exhibit a heightened sense of accountability to the constituencies served and for outcomes created.
Activity Area of Social Entrepreneurship
Economies can be considered as three sectors:
• Public sector supported by the state, • Business or private sector operating for profit, • Social economies that combine Union, volunteering and non-profit activities.
The government is at the center of the public sector, while profit is at the center of the private sector, and citizens are at the center of the third sector. Social economies are defined as the third sector between the private and public sectors. The concept of the social economy includes all institutions that include activities with high social added value.
Although social enterprises mostly operate in the non- profit sector, they also include their activities in the public sector and sometimes in the for-profit sector. In other words, social enterprises can find a place in all three sectors based on their fields of activity.
Differences Between Social Entrepreneurship and Traditional Entrepreneurship
The main missions of social entrepreneurs who manage or create innovative entrepreneurial organizations or investments are social change rather than profit. Social entrepreneurs can also participate in profit-oriented activities, but they accept profit as a means to achieve their goals. On the other hand, the primary purpose of traditional entrepreneurs is profit. This goal difference between the two entrepreneurship types is the essential difference between them.
Commercial and social entrepreneurs differ from each other with their approach to entrepreneurship. However,
although the aims of social entrepreneurs and traditional entrepreneurs are different from each other, it should be noted that the problems and opportunities they experience in starting and maintaining their enterprises are similar.
Components of Social Entrepreneurship and Social Enterprises
Organizations that fall neatly into the category of social enterprises conform to several criteria. These include:
• Social enterprises have a social purpose. • The assets and wealth of social enterprises are used to create community benefit. • Social enterprises pursue business activities (at least in part) to achieve their goals. • In social enterprises, profits and surplus are reinvested in business and society instead of being distributed to shareholders. • Employees (or members) have a role in decision making and governance in social enterprises.
Components of Social Enterprise
The first component of social enterprise is social impact. This component is the main point that distinguishes social enterprises from other enterprises. The foundation of social entrepreneurship is the fact of creating social value rather than increasing the wealth of individuals or stakeholders. It is also an essential component of social entrepreneurship to see the opportunities that will create social value, determine the roads that lead to opportunities, and have new resources to develop these opportunities. Social enterprises have a social vision. Social vision is considered as the main difference that distinguishes social enterprises from other enterprises. Another critical factor in social entrepreneurship is to produce social innovations to create a social impact. Innovation in the social sector can be seen at the product, service, or process level. Innovation is not limited to creating anything new, the production of an existing product also explains it in new ways, and with a new structure. social entrepreneurs are expected to be creative in creating resources. Social enterprises will be more sustainable as they develop the resources, and will not have difficulty in finding resources to the extent they are sustainable.
Economic and Social Values Created by Social Enterprises
Social and economic benefits generated by social entrepreneurs and serving the goal of economic development can be listed as follows:
Generating employment and increasing the quality of jobs:
Social entrepreneurs create jobs directly or indirectly. When we think like a classical business, social entrepreneurs create direct employment with their human capital, and they also create indirect employment areas as
a result of their help and similar activities. Social entrepreneurs also provide employment opportunities for disadvantaged groups such as people with disabilities, homeless people, and those who experience gender discrimination.
Creating new products and services in the fields of social and economic development:
Social entrepreneurs identify people and resources that cannot fully realize their potential and evaluate them to meet their social needs. Social entrepreneurs create innovation for social assistance services or social problems by developing a new product or a new approach. Social entrepreneurs can produce innovative products and services in areas such as AIDS, mental illness, low education, crime, drug use.
Raising social capital by creating relationships based on trust:
Social capital is a structure that facilitates cooperation and coordination in the development process. One of the most critical features of social entrepreneurs is their ability to bring individuals, organizations, and complex networks together. The most important among the capital created by social entrepreneurs can be considered as social capital.
Supporting equality to distribute all the resources of the society fairly:
Social entrepreneurship supports that society has a structure where all resources are distributed with a more egalitarian approach. Efficient distribution of limited resources and structures within the community through projects developed by social entrepreneurs will enable individuals to develop themselves according to their interests, thereby enabling the establishment and maintenance of collective structures.
Developing an innovative approach to achieve sustainable development goals:
Sustainable development means transferring certain environmental capital stocks such as soil, clean air, fertile forests, plants, fish, and land animal varieties to future generations. The target of social enterprise activities are individuals, communities, and future generations. Social entrepreneurs develop products and services for these three levels of need. Accordingly, social enterprises serve the sustainable development purpose of the products and services required to meet the basic needs of individuals, to activate the structures of their communities, and to maximize the preferences of future generations.