There is No Better Time to Focus on Social Entrepreneurship than Now

Given the looming public debt crises in the US and Eurozone which have rippled around the globe,  given the civil unrest in London, Damascus and Tel Aviv, and given the seeming powerlessness of governments to calm the fear and heal the wounds, there is no better time for social entrepreneurs to step up to the plate.
 
First, social entrepreneurs have weathered through many of the challenges the world only now is awakening to ….Social entrepeneurs brought to market innovations despite widescale pessimism. They grew their enterprises despite constrained financing and scaled their operations amidst fragmented political environments. They perservered with the positive change they envisioned for the world and delivered measurable, broad-reaching social impact.  And when most people told them their enterprise could not possibly survive, they thrived. In short, social entrepreneurs created positive, scalable and sustainable long-term social change in circumstances that echo what much of the world now faces.
 
Second, social entrepreneurs can fill the void that will emerge when governments and multilateral institutions are forced to cut back.  In Europe and the US, there will be a void left by overly indebted governments with smaller spending budgets. In Africa, Latin America, and Asia, there will be a void left by resource constrained multilateral development institutions, institutions which will see both their primary financial backers (Europe, USA, and Japan) cut back on aid commitments and their existing endowments shrink due to dollar and euro depreciations. Social enterprises, in part because their operations are more nimble and in part because their market strategies are innovative, tend to operate with more cost efficiency and have greater effectiveness in targeting direct recipients than do governments and multilateral institutions. People say a crisis is a terrible thing to waste. Let`s not waste this public debt crisis by not focusing on how the social enterprise sector can raise the bar for efficiency and effectiveness in creating positive social change.
 
Moreover, from the business community perspective, a greater focus on social enterprise makes practical sense. A country creates a competitive business environment when there are lower levels of crime, higher levels of human capital, healthier and more productive workforces, and increased  transparency and accountability which lower transaction costs associated with corruption. A competitive business environment is at its heart a social impact environment. In other words, the case for social entrepreneurship is not just a case for social services, it is a case for facilitating strong competitive business environments. This in turn will keep economies robust, even when governments` hands are tied.
 
Third, increasingly businesses are incorporating a shared value model, as we heard from competitiveness expert Michael Porter at Davos this past January. A recent article in a British business newspaper explained that companies will be unable to separate themselves from the consequences of their operations, “As we move towards the shared value model, more questions will be asked of companies. The measure will not simply be profit, but to what end profit is pursued, how it is gained and what is its impact.”. Who better to help shape this growing trend than social enterprises, who pioneered the field of incorporating social impact into their core business strategy?
 
Amidst all the concern that world economy is falling off a precipice and the future seems uncertain, now is the time for us to shift our focus to social entrepreneurs, as we both have much to learn from them, and their social enterprises present perhaps the best opportunities for positive future.

Abigail Noble

 

Editor's note
Abigail Noble, Head, Latin America and Africa, Schwab Foundation for Social Entrepreneurship