Social Entrepreneurship


  • Author Muhammad Fahad Ali
  • Published December 4, 2020
  • Word count 2,332

Concept of Social Entrepreneurship:

The concept of Social entrepreneurship is not a very old concept as it emerges in the early 1980s and thriving since then due to the extreme level of capitalism in the west social entrepreneurship has found a middle ground to cater to the needs of those who need the capitalist support to survive socially and economically. Social entrepreneurship ideally is non-profit but it can be for-profit if it caters to a social, legal, or environmental need that requires a non-capitalist solution. Despite having been there for almost 4 decades there is no universal concept of Social entrepreneurship exist different researchers have different approaches to the concept of social entrepreneurship and it is difficult to categorize it either black or white due to its complex nature of functionality (Barraket, 2018)

Social entrepreneurship always develops in three stages :

  1. The identification of the social issue and the emergence of social idea

  2. Development of the basic idea by identifying the Requirements

  3. Scaling up of the operation

Unlike conventional typical entrepreneurship, social entrepreneurs do include a variety of professionals under the umbrella such as social scientists, social workers, non-profit organizations, and social researchers however not all those categories need to do qualify for the title of a social entrepreneur. Any idea, product, or service that can bring a positive impact or influence into society not entirely based on the capital interest can be termed as social entrepreneurship (Ramani, 2017)

Despite having more resources and better infrastructure developed economies are not very prominent in successful social entrepreneurship examples in comparison to developing economies.

The value of Social entrepreneurship

To understand the value of social entrepreneurship we need to understand first that the boundary between the social and economic interest as per the conventional capitalist entrepreneurship does not exist in social entrepreneurship and the concept that social entrepreneurs are only motivated by the social mission they carry is a myth and not reality and pretty much that what differs the social entrepreneurship from social work (Subhanjan Sengupta, 2017)

Social entrepreneurship might not be based on creating an economic value but instead, it creates a social value that fulfills the social needs of a society which ultimately leads to a society that performs economically well and thus can be termed as innovative value-creating activities that benefit society socially and economically (Rosli, 2019)

Social entrepreneurship and Microfinance

Microfinance is the best example of social entrepreneurship success and it is the flagship field once after the Nobel prize awarded to the Muhammad Yunus of Grameen bank. The study of this project is the basic case study of how social entrepreneurship can be impactful in developing economies and numerous microfinance projects have been started based on the successful model of Grameen bank one of the example is the microfinance bank of Pakistan which adopted the same model of Grameen bank and mainly focused on the agricultural sector and providing them the small loans with less interest and easy installments this project was not a big success as Grameen bank because of lack of infrastructure and leadership however it did bring change on a medium scale if not massive (Rosli, 2019)

Another success story of Social entrepreneurship via microfinancing is the Orangi pilot project in Karachi Pakistan started by three non –governmental organizations in Pakistan lead by Akhtar Hameed Khan this project has served as a classic success story of social entrepreneurship in Pakistan it did not only solve the housing problem for the thousands of families in the biggest city of Pakistan but it also has provided the solution for the difference in the income of Immigrants and natives as most of the people in the area of orangi pilot project were immigrants from Bangladesh to Pakistan (Barraket, 2018)

There is no doubt that these two biggest success stories not only provided the immediate and sustainable solution to the problems of the economy struggling class but also helps in finding the long term solutions for the social problems such as Illetracy, Injustice, economic divide, Human right violations, environmental destructions, etc (Sanchita Bansal, 2019). The idea of social entrepreneurship does not encourage massive scale operations all the time such as the Orangi pilot project or Grameen bank as these require massive infrastructure and capital support and it is not an easy task for a social entrepreneur to raise capital and support on such massive scale but it will mostly focus on solving a social problem of a community, area, village or a city numerous capital or neoliberal idea based projects are started under the umbrella of many non-governmental organizations and CSR ( corporate social responsibility) based activities of for-profit organizations such as Bill and Amanda gates foundation which is not only helping as a non-profit organization but also financing numerous social entrepreneurship based startup ideas.

Another successful example of Social entrepreneurship via microfinancing is the Bangladesh Rehabilitation assistance committee (BRAC) which helped in eradicating poverty at a massive scale and can surely be termed as the second biggest success of social entrepreneurship in Bangladesh after Grameen bank. United Nations has also adopted the initiative of micro-credit and microfinance in developing economies and has seen massive improvements in the social infrastructure of the economies where it was implemented (Shah, 2017)

Social entrepreneurship usually works best in emerging economies as emerging economies have two basic characteristics one the pace of economic development is very rapid and progressive second the social and governmental environment is very supportive of the economic liberation and free market, which will create a different class of social and economic evolution.No every emerging economy posses similar characteristic they vary greatly in social, demographical and cultural contexts. A lot of emerging economies do not support social entrepreneurship because of their social/cultural or political infrastructure (Rosli, 2019)

Social innovation and social entrepreneurship are somehow interchangeable in their structure and purpose but can be different sometimes in the economic context as social entrepreneurship usually interested in earned income strategies by fulfilling their social mission on the other hand social innovation does not necessarily incline towards the commercial aspect but rather focuses on the fulfillment of the social need (Barraket, 2018)

Social entrepreneurship does not only focus on the financial achievements of the social entrepreneur via solving a social problem or making a solution better for the social issues but it also helps in balancing the social inequality between different classes of society through community partnership and participation, by improving the quality of life of the middle and lower class in the society, by preventing violence and bringing social justice into the society and mainly by social inclusiveness in the business. Social inclusiveness covers the most vulnerable class of the society and makes them the partners in the business activity which in turn provides the benefit to both business and society by elevating the economic class of the vulnerable population (Chong Kyoon Lee, 2020)

(Spitzeck, 2013) has concluded that social entrepreneurship and commercial entrepreneurship are not opposite of each other but they do have a common ground where all the stakeholders in the project develop a symbiotic relationship with the organization. Historically in commercial entrepreneurship usually the stakeholders consider to be taken into the consideration are customers and consumers of the organization rather than the social system that surrounds the business market of the organization. Usually, it is perceived that commercial entrepreneurs are only interested in the financial gains and social entrepreneurship are more interested in the social changes however in the study by (Rosli, 2019) it has been found that there are moments when the commercial entrepreneurs prefer the social impact over financial and social entrepreneurs prefer to have financial gain over social gains (Hand, 2016)

Social Entrepreneurs in developing economies :

India is the worlds second-largest population and also the largest middle-class population in world there are many social entrepreneur success stories in India which has motivated a lot of Indians to invest their ideas into social causes the father of the nation Mr. Gandhi has been considered a great social entrepreneur by (Ramani, 2017) he considers him a revolutionary social entrepreneur who transform the sanitation of millions of Indians by the in-house toilet reform in rural India ( open defecation is a very huge social problem in India).

Social entrepreneurship in developing economies has not been developed as much as it should be mainly because of the extensive beaurocratic system in India which leads to demotivation of the entrepreneurs, taxation laws and regulations which do not provide the much-needed support to the social entrepreneurs, and corruption in the sectors which is mainly the reason of the social inequality in those countries.on the contrast social entrepreneurship in the developed world is well studied and well supported and it covers the minority and most vulnerable communities of the societies as well such as LGBTQI and Indigenous populations (Han, 2019)

A very basic and prominent reason the social entrepreneurship in the developing economies are not including women in most of the entrepreneurial operation mostly African and Asian countries have a cultural barrier against women working in the entrepreneurial sector which goes against their social and economical well being for some countries which are almost half of their population as women have only less than 10% contributing economically and socially.on the other hand the gender gap does exist in the developed countries as well but it is not as bad as in the developing economies for example in Saudia Arabia only 2% of the women population is contributing economically in the society the rest of the 98% are just the dependents on their male counterparts (Abel Duarte Alonso, 2019)

Challenges for social entrepreneurs

Social entrepreneurs usually experience more challenges and barriers then commercial entrepreneurs some of the common challenges they do experience are the governmental regulations and policies which usually favors the commercial entrepreneurs but not so much in the favor of the social entrepreneurs, this so far might be the biggest barrier in the social entrepreneurship in the developing economies as most of the governments in developing economies hesitate to provide any support to the project that does not offer them a steady and confirmed return on investments (Ramani, 2017)

The second challenge for the social entrepreneurs is the stakeholder's demands as most of the stakeholders in social entrepreneurship require their investment to be secured and recover it as soon as possible and to satisfy that demand the social entrepreneur has to adopt a hybrid model between the commercial and social entrepreneurship. Also in the developing economies, it is very difficult for the social entrepreneur to find investors due to a lack of the general infrastructure for social entrepreneurship. Most investors do not prefer to invest in social projects due to longer ROI period and lack of support from the government, access to international social agencies such as UNO and Redcross is not accessible to the social entrepreneurs who work on a medium or small scale project (Chong Kyoon Lee, 2020)

There are also demographic and geographic challenges in this case as well since most of the developing economies do not have the geographic infrastructure developed it makes it harder for the entrepreneur to make the offering accessible. Social entrepreneurship, similar to each other area, needs to empower experimentation and danger. The estimation of this and its effect on advancement is noticeable in practically every field from well-being to training to the agrarian and mechanical areas. Besides, cultural barriers can significantly limit access to capital for women, minorities, and indigenous social entrepreneurs around the world (Sanchita Bansal, 2019)

Be that as it may, because financing solely favors positive outcomes and traditionalist effect measurements, experimentation in the social area isn't boosted. While deliverable measurements are one objective, the best gains in any field are typically conveyed by exploratory techniques. The aftereffects of these theoretical techniques are, by definition, speculative. The social segment's reliance on measurements based financing diminishes its capacity to try, create learnings, and re-advance. In the corporate world, experimentation is called flop quick and bomb regularly. In the social segment, it's essentially called disappointment (Han, 2019)

Social Entrepreneurship and Covid-19

The most vulnerable population to covid-19 poor and less resourceful around the globe and social entrepreneurship serves the same group of people which increases its importance to ten folds in this pandemic."The UN University estimated that the economic fallout could push an estimated half a billion people into poverty and take global development progress back three decades, primarily in emerging economies" (Bonnici, 2020). The Ecosystem of social innovation and entrepreneurship has been developed in the past four decades and this Ecosystem has been very beneficial in the pandemic as almost forty of the leading global organizations has created a support group for social entrepreneurs and innovators which accounts for more than 15000 entrepreneurs working on social causes for a less privileged and less resourceful population the initiative is called COVID Response Alliance for Social Entrepreneurs. The aim is to share knowledge, experience, and resources to coordinate and amplify social entrepreneurs' response to COVID-19.

The Alliance will organize uphold for social innovators in four key manners:

Survey and feature needs over individuals' social endeavor portfolios

Intensify and extend accessible budgetary help under a joint collusion dashboard and help social business visionaries collect extra cash to grow their work

Arrange non-monetary help gave by organizations and go-betweens, for example, social acquirement, legitimate administrations, and innovative help

Advance joint correspondence endeavors to advocate for proper financial and strategy mediations pertinent to social business people


Social entrepreneurship has flourished in the past couple of decades especially in the developing economies however there is very little theoretical data to support the claims however the data created over the years needs to be analyzed more to identify the basic elements of social entrepreneurship and to identify how does it contribute in terms of social change. We then proposed a definition of social entrepreneurship, which contributes to the literature on social entrepreneurship by clarifying and bounding the scope of research in this field. There are a lot of sub-fields in social entrepreneurship that are very understudied and need more research to identify their significance such as social innovation and social change management etc.

The Author is a DBA Student at Ligs university and this paper is a work of the author's own research. Please comment below if you have any questions for the author

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