9 billion good reasons to invest in Social Entrepreneurship

Blog post for the subject Social Entrepreneurship

Whatever was sustainable on a planet of 6 billion people, will no longer be sustainable on a planet of 9 billion people. A quick read through the newspaper headlines and we can see that society is facing some serious challenges in all areas of sustainable development; economic recessions and unemployment; climate change and resource depletion; social inequity and poverty.

While these issues can represent threats to some businesses, to others they represent opportunity – the opportunity to solve one of these societal challenges and make a profit. This mission, to do good and be useful to society while also earning a living is at the heart of what it means to be a social entrepreneur. The key to social entrepreneurship is therefore the alignment of business to one of these societal challenges.

While the alignment of business to ‘making the world a better place’ sounds all well and good, does it actually make good business sense? Is social entrepreneurship worth the investment when compared to traditional business models? I think the answer is yes. Yes because social entrepreneurship models still satisfies a fundamental principle of business, that is, delivering value in exchange for a return.

However, the fundamental principle that is different about social entrepreneurship models is that the type and scope of this value concept has shifted. It has shifted towards a value concept that is increasingly in demand. A value concept that is increasingly in demand because of the increasing pressures of a globalized and growing society in the 21^st century. A society still struggling to work out the formula for how to do ‘less with more’. For example, how can we feed 9 billion people without destroying the planet? How can we reduce social inequity while reducing our greenhouse gas emissions? It is in such challenges where we find the drive to create innovative new business models which move from creating value for a few, to creating value for many.

Therefore, unlike other current business markets, a promising reason to invest in the social entrepreneurship market is because there will continue to be an increased opportunity for social entrepreneurs – so while it is common today to read of successful social entrepreneurs, already out there defining new meaningful ways to business, the good news is that there is (unfortunately) a huge market of social, environmental and economic challenges still waiting to be solved. With governments increasingly overwhelmed by the mounting numbers of societal challenges, the time has never been better to invest in social entrepreneurship as a means to bridge the gap.

One organization, B Lab, a non-profit that certifies these purpose-driven companies alone reports to have registered 30,000 of these social entrepreneur based companies which together represents some $40 billion in revenue.

Another statistical reason to invest in social entrepreneurship is a simple one. If we “consider each individual as a mine of gems of inestimable value”, given that we will soon be 9 billion people, from a resource analysis perspective, this represents an increasing resource of “mines” filled with valuable innovative ideas. In other words, while in some arenas the growing population represents a threat, in the social entrepreneurship arena, the more people the better, and the more potential we have to generate innovative society-changing ideas.

However, social entrepreneurship is more than just a good idea. I remember one day when I was in Australia and going home after university with a friend. We were contemplating what we were going to after we finished our studies. After a moment of silence, I exclaimed “I just want to come up with a good idea!” – a moment later, my friend and I burst out in laughter at the simplicity and obviousness of this statement – I didn’t say I want to come up with an amazing idea or an excellent idea, just a plain old garden-variety good idea! Today, I look back on this statement with even more insight into the world of social innovation, understanding that even having an amazing idea is not enough. The point I am making here is that like with any investment, to invest wisely in social entrepreneurship means more than just investing in idea generation.

So what should a savvy social entrepreneur investor look for? Well, savvy investors should look for social enterprises that balances idea generation with implementability of the following:

1. Urgency – how urgently does the target market need this idea implemented?
2. Capacity – does the enterprise have the resources (i.e team work) to implement the idea?
3. Capability – does the enterprise have the skills to implement the idea?
4. Passion – and finally and perhaps most importantly – does the enterprise have the passion to implement the idea, even in the face of obstacles?

Finally, there is one more good collaborative reason why we should invest in social entrepreneurship. With the rise of technology and co-working spaces (such as the HUB) which allows individuals the ability connect to other like-minded individuals, the barriers to implementability are quickly being broken down. More and more people are discovering that there is no business like social business and there is 9 billion good reasons to invest in social entrepreneurship.

Comments Off on 9 billion good reasons to invest in Social Entrepreneurship / 29 May 2013 por Daniel Salter
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