Social enterprise? Social innovator? What exactly do these terms mean? Do you know what the difference is? Do you know why are both key to our society? Social entrepreneurs and innovators are the ones who can change the course of history and in this article we will analyse why.
We will also look at the differences between them and a regular business. We will analyse why they are becoming true agents of change, key to the new business culture that is changing the world.
In this kind of entrepreneurship, the main actor are the people and, as in regular business, social entrepreneurship also aims to make a profit. The difference lies in the fact that this profit is intended to promote sectors in need.
Therefore, we can say that social entrepreneurship consists on satisfying a social or environmental need, by generating economic profits. Social entrepreneurs reinvest these profits to achieve a social goal.
Many social entrepreneurs are changing the way business is done. The European Union is aware of this. That is why it has created a whole series of instruments to promote this kind of entrepreneurship, such as increasing the visibility and recognition of social economy enterprises; the dissemination and communication and publicity strategy on social entrepreneurship at European level; and the development of an economic environment that allows social enterprises to access financing.
The first time in history that the term “social entrepreneur” was used was thanks to Bill Drayton, who in 1981, after coming back to the United States from a trip to India, brought back with him the ideas he saw there.
He was surprised with people who were dedicated to solve important problems in India, but not from a voluntary or welfare way, nor through a non-profit organisation, but through businesses. They were companies with a profit approach, but in these cases, the profits generated were reinvested in society. This way everyone could grow and progress.
In the United States, social enterprises have been defined as businesses who´s aim is generating income to fund social purposes.
Social enterprises can carry out any activity or business; it is not necessary that the activity has anything to do with the social purpose of the enterprise. What is needed to fall within this definition is that they must use their profits for social or environmental purposes in some way.
Here is the big difference between a social enterprise, a non-profit organisation and a regular business.
Non-profit organisations do not seek any economic benefit, unlike companies, whether social or regular ones, they do look for a profit. The difference is that social entrepreneurs reinvest their profits in social purposes, and not in the company's own shareholders or partners, as in a regular businesses.
Social entrepreneurship shouldn’t be confused with social innovation.
Social entrepreneurship means setting up a company, a whole mechanism whose business model may or may not be social innovation. On the other hand, a socially innovative idea can be carried out by a regular business, a non-profit organisation or a social enterprise. A socially innovative idea does not necessarily imply a specific business model.
Social innovators are people who identify a problem and generate an idea that can provide a solution or at least try to solve a problem, in an innovative way.
According to the Stanford Graduate School of Business, social innovation could be defined as "a new solution to a social problem, which is more effective, efficient, sustainable or fair than the current solution.”
Canadian studies define it as "a process, product or programme that really changes the system’s functioning we have inherited, generating positive change and more resilient communities".
Is this the way forward? Is our future in the hands of innovators and social entrepreneurs?
Skills such as efficiency, problem solving, working under pressure, leadership, among others, defined the ideal candidate for a regular company.
Innovators and social entrepreneurs are defined more by skills such as energy, empathy, creativity, shared leadership and teamwork.
This concept is still relatively new, but social enterprises are becoming increasingly relevant. Numerous countries, supranational bodies, and even private foundations and organisations, already have programmes to help, support, disseminate and even finance social entrepreneurs and innovators.
In fact, there is a growing interest in innovation and social entrepreneurship. This has also generated a growing demand for mechanisms to determine its effectiveness and long-term impact, to allow them to respond to major global challenges such as poverty, discrimination, gender-based violence and climate change.
This is precisely why governments, companies and organisations are beginning to see social innovators and social entrepreneurs as a real tool to generate changes that contribute to the sustainable development of our communities and our planet.
Therefore, although innovators and social entrepreneurs have only been in the business sphere for a short time, their relevance, their innovative ideas and their way of doing business mean that the future has a clear social aspect.
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