INTRODUCTION

"What we need is an entrepreneurial society in which innovation and

entrepreneurship are normal, steady and continuous."
-- Peter F. Drucker

The concept of entrepreneurship, long hallowed in the context of business

and economic ventures, has been increasingly applied to the context of
social problem-solving. The challenges of finding effective and sustainable
solutions to many social problems are substantial, and solutions may require
many of the ingredients associated with successful innovation in business
creation.
However, solutions to social problems—such as sustainable alleviation of
the constellation of health, education, economic, political, and cultural
problems associated with long-term poverty—often demand fundamental
transformations in the political, economic, and social systems that underpin
current stable states.
When Muhammad Yunus, 2006 Nobel Peace Prize awardee and founder of
Grameen Bank, was contacted by the Nobel Foundation for the customary

winner
interview, he remarked, “...poverty is an artificial creation. It doesn’t belong
to human civilisation, and we can change that, we can make people come out
of poverty (sic). The only thing we have to do is to redesign our institutions
and policies.”
That’s what social entrepreneurship is about: creating business models
revolving around low-cost products and services to resolve social inequities.
And the realization that social progress and profit aren’t mutually exclusive
has led to many social ventures taking root in India as well. The rise of
social entrepreneurship can be seen as the leading edge of a remarkable
development that has occurred across the world over the past three decades:
the emergence of millions of new citizen organization.

“India as a country has two starkly contrasting facets. While one is making
impressive strides in the global arena, the other is bereft of even basic
necessities like nutrition, education and health care. Government
mechanisms have fallen woefully short of addressing these issues. However,
social entrepreneurs could bridge the gap in delivery of these basic
services.”
 Written by Gautam Patil for Gaebler Ventures
The latest World Bank report states that approximately 350 million people in
India currently live below the poverty line. In fact, many people with low
spending power simply lack access to basic services due to a variety of
reasons ranging from apathy to scarcity of resources. These are the gaps
which need to be filled by the social entrepreneurs.

SOCIAL ENTERPRENEURS
Entrepreneurs are innovative, highly-motivated, and critical thinkers. When
these attributes are combined with the drive to solve social problems, a
Social Entrepreneur is born. A social entrepreneur is someone who
recognizes a social problem and uses entrepreneurial principles to organize,
create, and manage a venture to make social change. Whereas a business
entrepreneur typically measures performance in profit and return, a social
entrepreneur assesses success in terms of the impact s/he has on society as
well as in profit and return. While social entrepreneurs often work through
nonprofits and citizen groups, many now are working in the private and
governmental sectors and making important impacts on society.
Social entrepreneurs identify public problems and apply business acumen to
resolve them. Instead of using a venture solely to make a profit, they aim at
simultaneously impacting a society and regulating positive change. The
success of such an endeavor is, therefore, measured not just on the basis of
balance sheets, but on the effect it has had on a community. Social
entrepreneurs take innovative approaches to solving social issues, using
traditional business skills to create social, rather than private value. They are
committed to fostering innovation and to exploring new opportunities.

“At the broadest level, a social entrepreneur is one driven

by social mission, a desire to find innovative ways to solve
social problems that are not being or cannot be addressed by
either the market or the public sector”
- Laura D’ Andrea Tyson
The more modern definition of social entrepreneurship incorporates the
enterprise orientation with social objectives and social ownership, which
means that the social enterprise is typically accountable to community
stakeholders rather than financial investment shareholders.

A social entrepreneur is a change agent who:

• “Adopts a mission to create and sustain social values
• Recognizes and relentlessly pursues new opportunities to serve that
mission
• Engages in a process of continuous innovation, adaptation, and learning
• Acts boldly without being limited by resources currently at hand, and
• Exhibits heightened accountability to the constituencies served and the
outcomes created.”

Entrepreneurs are essential drivers of innovation and progress. In the

business world, they act as engines of growth, harnessing opportunity and
innovation to fuel economic advancement. Social entrepreneurs act
similarly, tapping inspiration and creativity, courage and fortitude, to seize
opportunities that challenge and forever change established, but
fundamentally inequitable systems. A social entrepreneur in the twenty-first
century will redefine entrepreneurship as we know it, due to their
progressive business models.

ENTERPRENEUR TO SOCIAL ENTERPRENEUR

‘ What motivates social entrepreneurs is not doing

the DEAL but achieving the IDEAL.’

The departure from business as usual in the nonprofit realm is part of a

major shift in the way people are taking on the world's social problems. In
developing nations and parts of the U.S., governments have failed to make
substantial progress against poverty, disease, and illiteracy. Traditional
charities and social service agencies often provide Band-Aids for problems
instead of long-term solutions. Now a new breed of do-gooder—the social
entrepreneur—is trying fresh approaches.
The idea of the social entrepreneur has been percolating for decades, but it
has become a mass movement in the past couple of years.
Just as entrepreneurs change the face of business, social entrepreneurs act as
the change agents for society, seizing opportunities others miss and
improving systems, inventing new approaches, and creating solutions to
change society for the better. While a business entrepreneur might create
entirely new industries, a social entrepreneur comes up with new solutions to
social problems and then implements them on a large scale.
The idea of Social Entrepreneurship has become increasingly popular as
social problems in our complex modern society have grown. In a way, it is a
reaction to the ‘bottom line’ philosophy of modern big business with its
emphasis on short-term profit to the detriment of any long-term benefit to
society as a whole or the human component of the business itself. Social
Entrepreneurship seeks to harness the practical dynamism of the successful
businessman to enrich and help society, especially in countries where the
individual is beset with problems of dire poverty and lack of opportunity.

ROLE OF SOCIAL ENTERPRENEURSHIP IN ECONOMIC

DEVELOPMENT
“Social Entrepreneurship” is being responsive to the needs of our times. The
non-economic motivational underpinnings of social entrepreneurial activity
revolve around its passion of accomplishing a social mission, ability to
incorporate innovation, strive to create impact not just earn income. These
are the very basis for social entrepreneurship.
Social entrepreneurship is important to economic development because it
can play a vital role to the progress of societies and deliver vital value to
societal and economic development.

1. Economic development:
Social entrepreneurship creates: job and employment creation. Social
enterprises provide employment opportunities and job training to segments
of society at an employment disadvantage, such as the long-term
unemployed, the disabled, the homeless, at-risk youth and gender-
discriminated women. Some social enterprises act as an “intermediate
between unemployment and the open labor market”

2. Continuously pursuing innovation, adaptation, and learning:

All kinds of entrepreneurs whether business or social are, by nature,
innovative. They do not necessarily invent new things but also introduce
new ways of looking at or using existing things. Creativity for entrepreneurs
is a continuous learning process. Innovation often entails risks. But
entrepreneurs are capable of managing these risks. Some of the biggest
societal problems such as HIV, mental ill-health, illiteracy, crime and drug
abuse which, importantly, are confronted in innovative ways.

3. Social Capital:
Next to economic capital one of the most important values created by social
entrepreneurship is social capital. Social capital is the most important form
of capital created by social entrepreneurs because economic partnerships
require shared values, trust and a culture of cooperation which is all part of
social capital.

4. Equitable society:
Another aspect is that social entrepreneurship fosters a more equitable
society which is an objective for most economic development policies.
Complementing the equity promoting activities of public agencies and
NGOs, social enterprises address social issues and try to achieve ongoing
sustainable impact through their social mission rather than purely profit-
maximization.

5. Optimum utilization of scarce resources:

Limited resources for social entrepreneurs do not pose a hindrance to their
desired ends. They augment scarce resources by exploring options such as
adding partners, collaboration and soliciting aid from philanthropists. They
develop strategies that promote and enhance their social missions or the
objectives they seek.

6. Recognize and pursue opportunities in service of the goal:

Their goals are what separate the social entrepreneurs from business
entrepreneurs. A social entrepreneur focuses on a social mission. It is an
essential part of business, the core with which the activities of the social
entrepreneurship revolve around.

SOCIAL ENTREPRENEURSHIP: CHALLENGES

AND WAYS AHEAD
Despite having the social mission, doing business is still an approach
unfamiliar to social entrepreneurs. Some challenges and issues faced by
them are as follows:

1. Tension from two different organizational cultures:

Social entrepreneurship implies that two different cultures, profit and
nonprofit, with their own different set of values, objectives and management
necessities will clash within one organization. In some cases, making money
clashed with the principles of some people inside the nonprofit
organizations. Some social welfare foundations met resistance from social
workers when setting up their business.
But to overcome this challenge, HBS colleagues Howard H. Stevenson
suggests creative combination and adaptation of social and commercial
approaches. A perfect example of this is network approaches. A network
approach requires leaders to focus not only on management challenges and
opportunities at an organizational level, but also more broadly on how to
mobilize resources both within and outside organizational and sectoral
boundaries to create social value. Social entrepreneurs who have innovated
using network approaches are in many ways ahead of the curve, even
relative to leaders in other fields.

2. Lack of professional business skills and expertise:

Apart from the issue of acquiring professional skills and expertise, these
organizations face the challenge of disadvantaged and unskilled labor pool.
Social entrepreneurs have harder time remaining competitive cause they are
less productive, and they need extra training and efforts.
However, this problem has been significantly taken care of by Dr.
Balasubramaniam. Dr. Balasubramaniam is a Social Entrepreneur and the
founder of the Swami Vivekananda Youth Movement whose mission is to
establish a caring and an equitable society, free of deprivation and strife.
SVYM has also established the Swami Vivekananda Institute of Leadership
Development and has begun its own Masters course on NGOs in
collaboration with the Mysore University. The 4 semester course is designed
to develop skilled managers for the NGO sector.

3. Difficulty balancing mission and financial goals:

Social entrepreneurs must deal with social considerations but they must also
tend to more down to earth business considerations, find ways to balance
both types of considerations and attain sustainability.
This challenge cannot be overcome through incremental change in existing
activities. Instead, it requires a fundamental transformation in the way that
companies do business. It entails identifying new opportunities, creating
new strategies, and establishing the structures and processes needed to
pursue them. It is more powerful to envision this challenge as an
entrepreneurial undertaking aimed at the innovative cogeneration of social
and economic value.

4. Un-sustainability of social entrepreneurship ventures:

When the SE venture is not sustainable, it also becomes a financial burden
on the organization that needs to continually inject money to keep the
venture afloat.government subsidies or special opportunities are not a long
term solution.
Here we can quote the example of SEWA, Self-Employed Women's
Association. From 1972, the women of SEWA have come a very long way.
Low-income women have organized to claim a much stronger bargaining
position in the economic arena. Women and their families now have hope of
appropriate health and child-care services. By providing resource-poor
women access to financial credit and developing support services that allow
women best use of their resources, SEWA has shown that microfinance is a
powerful tool in developing institutional strengths and a strong economy.
SEWA’s pioneering achievements stand the test of any society, modern or
traditional, developing or industrialized.

5. Obtaining credit:
The biggest difficulty for social enterprises is obtaining credit and sufficient
funds, leading to a recommendation that special funding mechanisms should
be developed. Inspite of the credit problems, a not-for-profit organization,
The George Foundation, believes in integrated holistic approaches to solve
most human problems. Its mission is to help alleviate poverty, promote
health and a clean environment, and strengthen democratic institutions and
values in developing countries. Dr. Abraham M. George, the founder and
the principal benefactor of The George Foundation, in order to have he
freedom to carry out his ideas and concepts, and to demonstrate the
obligation on the part of private individuals of financial means to make
contributions to the needy segment of the society, he decided not to seek any
external funding for his projects during the initial ten years of the
foundation's activities.

6. Training and education:

Best-practice exchange, the education of future leaders and continuous
training should be supported by establishing centers for social
entrepreneurship.
Sustainability of projects is important for social service sector organizations
to work efficiently. And, with the management of the sector becoming more
complex each day, the Centre for Social Initiative and Management
(CSIM), started in 2001, has been providing training for would-be ‘social
entrepreneurs’. The philosophy is simple enough as the co-ordinator of
CSIM at Chennai, Latha Suresh, explains: “There are many NGOs doing
good work in many areas. But they do not manage to tap the resources
available from government and industry. Leadership training and
management skills are essential for these NGOs to serve a larger group of
people.”
The School for Social Entrepreneurs exists to provide training and
opportunities to enable people to use their creative and entrepreneurial
abilities more fully for social benefit. We also want to recruit more
innovative and capable people into voluntary and other organizations.
Another institute, CASE, centre for the advancement of social
entrepreneurship, was founded to capitalize on the opportunity while
building upon a deep respect for the talent, passion, and dedication of the
countless individuals who have devoted their lives to working for the
common good.

7. Government policies:
Regulation for social enterprises should be minimized and government
incentive programs including tax incentives should promote the social-
enterprise cause making the private sector more inclusive.
Dr. Balasubramaniam, the Founder President of SVYM, the Swami
Vivekananda Youth Movement, states that developmental work can be
successful only when all the stakeholders involved are committed to the
cause. Also, there is a compelling need for NGOs and Social Entrepreneurs
to enlist the support of the Government, the community and the corporate
sector in order to improve the chances of success.

REASONS FOR DOWNSIZING OF SOCIAL

RESPONSIBILITY

1. Nature of business
Corporation’s purpose is to maximize returns to its shareholders, and that
since (in their view), only people can have social responsibilities,
corporations are only responsible to their shareholders and not to society as a
whole. Although they accept that corporations should obey the laws of the
countries within which they work, they assert that corporations have no
other obligation to society.

2. Commercial benefit:
Some corporations start SR programs for the commercial benefit they enjoy
through raising their reputation with the public or with government. They
suggest that corporations which exist solely to maximize profits are unable
to advance the interests of society as a whole.

3. SR can be mere corporate jargon and politically correct box-ticking, rather

than a commitment to concrete action. In such cases the benefits for the
charity may be superficial at best

4. The charity's reputation may risk being tarnished by association with

particular corporate.

5. Lack of equality or even exploitation within the partnership. Some

companies, for example, stand accused of promoting an initiative more for
their own benefit, to enhance credibility or profit, rather than to aid a charity
or the community

6. SR is likely to be one of many initiatives embarked upon by a company

CONCLUSION
“Bringing low-cost services such as banking, healthcare, finance, etc. to
underprivileged sections of society is definitely a big opportunity as well as
a necessity. Rural, small-town and lower-income consumers constitute a
large market waiting to be tapped, but it is necessary for social entrepreneurs
to get past language, literacy and geographical barriers.”

Social entrepreneurship is not a panacea because it works within the overall

social and economic framework, but as it starts at the grassroots level it is
often overlooked and deserves much more attention from academic theorists
as well as policy makers. This is especially important in developing
countries and welfare states facing increasing financial stress.