We are all familiar with the term “entrepreneur," but who are “social entrepreneurs” and what do they do?
The term “social entrepreneurship" addresses social needs and problems by creating sustainable solutions such as a business or non-profit organizations.
Upon researching the concept of social entrepreneurship, three San Diego State University management professors — Chamu Sundaramurthy, Martina Musteen and Amy Randel — found very little research on social entrepreneurship in developing economies were there is a great perceived need for it.
India has experienced rapid economic growth —second in the world only to China. It is the largest democracy in the world and has a market-based economic system where private property rights were never banned.
A natural fit
To the researchers, the concept of social entrepreneurship seemed like a natural fit for a country that has had its share of societal difficulties, even with its rapidly growing economy.
“I was interested in how business and innovation can be used to address some serious social issues that are so plentiful in a country such as India,” Musteen said.
“The magnitude of social problems in India, or many developing countries, is so vast that traditional solutions are likely to be inadequate,” Sundaramurthy added. “Hence, it spurs innovative approaches and provides a natural laboratory for creativity.”
The researchers consulted Ashoka, which is the “largest network of social entrepreneurs worldwide” and selected 15 Ashoka Fellows working in India. The nine male and six female fellows selected for study contained a cross-section of social issues and included both non-profit and for profit organizations.
Categorizing social entrepreneurs
The research identified three types of social entrepreneurs. The first group was defined as market makers. Market makers establish ventures aimed at poor or disenfranchised populations through the creation of new products or services. Some of these business models go even further by providing economic solutions for these populations by involving them in the process.
For example, one of these businesses, Drishtee, operates nominally priced Internet access kiosks marketed to an underserved rural population who might not otherwise have access to government services or necessary information. In addition, Drishtee trained some members of this population to serve as franchisees to operate the kiosks.
The second group of social entrepreneurs — systems innovators — seeks solutions to inefficiencies in current systems and builds their businesses to bridge the systems’ shortcomings. One systems innovator was a 25-year veteran of the health care system and she used her knowledge of the system to set up a referral organization for low-income families needing maternity and neo-natal medical care to providers near their homes.
The final group of social entrepreneurs consisted of innovative campaigners who focus on awareness-raising and education.
An example of an innovative campaigner would be the organization Eco Friends which used innovative methods of educating the population on curbing pollution in the Ganges River.
The researchers also found there were crossover traits among the social entrepreneurs, meaning they shared some of the characteristics of other groups while all of them were passionate in creating social value for underserved populations.
The professors found that the most successful social entrepreneurs in India view their beneficiaries as partners and consumers rather than charity recipients.
Additionally, social entrepreneurs were able to engage some beneficiaries of their assistance into active partners in the development of their solutions, providing the necessary element of community building needed to ensure a successful venture.
“As the saying goes, ‘Necessity is the mother of invention’,” Sundaramurthy said. “Understanding these novel approaches to innovation can be extremely valuable for developing nations where there are still significant pockets of poverty.”