The rise (and prize) of the social entrepreneur

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Heading off to the Skoll Forum this morning, but just wanted to quickly point to Charlie Leadbeater’s article about social entrepreneurship in the Observer this weekend. Couldn’t agree more really, and it’s interesting to read vis-a-vis the discussion about definition and scale in the preceding post. Here’s some of the key points:

– "Critics complain social entrepreneurship is a vague idea. But the
reason it has grown is because it is so plastic, ambiguous and
adaptable."

– "Entrepreneurship usually comes from teams, not heroic individuals.
Social entrepreneurs thrive on interdependence, learning and borrowing
resources from the public and private sectors."
(SSE works through peer learning and a cohort of practitioners; see my rebuttal of the "heroic individual" critique)

– "The biggest challenge facing the social sector is how to scale up its
impact. Too many social entrepreneurs are still running inspiring but
small schemes."

– "Social entrepreneurship will come from many more sources. It needs to
become a mass activity, not just the domain of inspirational mavericks"

Spot on, really, and gives an interesting overview of how social entrepreneurship has developed in different countries and continents at the start of the piece. The two final points are the key for me really: how do we increase the impact of the sector, and how do we make it a mass movement….I’ll be looking for some answers (and trying to give some!) at the Forum in Oxford.

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The definition of social entrepreneurship (yes, again)

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There’s a big article out at the moment on the Stanford Social Innovation Review, entitled "Social Entrepreneurship: the Case for Definition". The abstract is as follows:

"Social entrepreneurship is attracting growing
amounts of talent, money, and attention. But along with its increasing
popularity has come less certainty about what exactly a social
entrepreneur is and does. As a result, all sorts of activities are now
being called social entrepreneurship. Some say that a more inclusive
term is all for the good, but the authors argue that it’s time for a
more rigorous definition."

It’s quite an interesting article with some good points and case studies, and I’d generally recommend a read of it. But, it’s central premise is that social entrepreneurship is only social entrepreneurship if it has scale or, in their words, "lead to a new superior equilibrium". Here’s what they say:

"We define social entrepreneurship as having the following
three components:
– (1) identifying a stable but inherently unjust
equilibrium that causes the exclusion, marginalization, or suffering
of a segment of humanity that lacks the financial means
or political clout to achieve any transformative benefit on its own;

– (2) identifying an opportunity in this unjust equilibrium, developing
a social value proposition, and bringing to
bear inspiration, creativity, direct action, courage,
and fortitude, thereby challenging the stable state’s
hegemony;
– and (3) forging a new, stable equilibrium
that releases trapped potential or alleviates the suffering
of the targeted group, and through imitation
and the creation of a stable ecosystem around the
new equilibrium ensuring a better future for the targeted
group and even society at large."

It’s a little bit tricky, I acknowledge, to take this out of context (do read the whole piece: it’s more understandable then), but the argument seems utterly flawed to me. They start by saying that we must first define entrepreneurship, because ‘social’ simply modifies that. OK, fine. They then go through entrepreneurship definitions (Schumpeter, Drucker et al)….and end up with:

"we believe that entrepreneurship
describes the combination of a context in which an
opportunity is situated, a set of personal characteristics required
to identify and pursue this opportunity, and the creation of a particular
outcome"

OK, no argument from me there. And no argument with the characteristics they then pull out (inspiration, creativity, prone to action, courage, fortitutde). But the case studies of entrepreneurs they select are only large scale disruptive entrepreneurs: the founders of eBay and Apple and so on. This means they move towards a definition of entrepreneurship which involves scale as well:

"It is through mass-market adoption, significant
levels of imitation, and the creation of an ecosystem
around and within the new equilibrium that it [the new equilibrium] first stabilizes and
then securely persists."

Before finally moving, inexorably and inevitably, towards a definition of social entrepreneurship that involves scale as well. And those who don’t achieve scale? They are "social service providers"….:

"But unless [social service provision] is designed to
achieve large scale or is so compelling as to launch legions of
imitators and replicators, it is not likely to lead to a new superior
equilibrium.

These types of social service ventures never break out of their
limited frame: Their impact remains constrained, their service
area stays confined to a local population, and their scope is determined
by whatever resources they are able to attract. These ventures
are inherently vulnerable, which may mean disruption or
loss of service to the populations they serve. Millions of such
organizations exist around the world – well intended, noble in
purpose, and frequently exemplary in execution – but they
should not be confused with social entrepreneurship."

So basically, their argument is: entrepreneurship involves certain characteristics, but is also about fundamentally changing (through disruption/imitation) a sector or field on a large scale. Therefore, social entrepreneurship (and I don’t disagree with how they define the social part of this: primacy of mission etc) is the same.

[Incidentally, why these groups are "inherently vulnerable", anymore than a large organisation set up by an entrepreneur is beyond me….for another time, perhaps…]

But they can only get to this point by creating a definition of entrepreneurship that involves scale. Which is, well, not something you find in many definitions of the word/concept. Aren’t there small entrepreneurs?

I’d like to be really clear that we have nothing against the kind of social entrepreneurs (Yunus, Victoria Hale etc) they describe: they and the work and impact of their organisations is magnificent, and deserves to be recognised and supported. And Skoll have done wonders in promoting the movement through the Forum and supporting social entrepreneurship through their awards (the latest 2007 awardees are another impressive set of amazing people). But why must a definition (which they want to avoid confusion, and because "We are concerned that serious thinkers will also overlook
social entrepreneurship".
) exclude those who demonstrate the same characteristics, the same entrepreneurial spirit and mindset, with the same primacy of mission, and achieving the kind of changes they discuss, but on a smaller scale?

What is wrong, for example, with differentiating between, as we recently discussed in several posts with the Shaftesbury Partnership, "system" social entrepreneurs and "community" social entrepreneurs, whilst acknowledging that some of the latter may morph into the former?

Anyone who reads this blog regularly will know that we cover this ground regularly and that we are more interested in getting on with delivery than going round in circles forever in this debate. But I couldn’t ignore this, particularly as this pre-eminent emphasis on scale is precisely what our talk at Skoll and forthcoming paper (on the long tail of social entrepreneurship) are intended to address.

Lest you think I’m alone in this critique, a few people have responded (here it is called a "lullaby to elites" in the comments, which is a bit strong!), but the first comment under the paper on Stanford’s own site says it pretty plainly:

"This [the article] is interesting but unfortunately just completely wrong. The vast
majority of entrepreneurs are small. This does not stop them from being
entrepreneurs. So it is with social entrepreneurs. The vast majority
are small. This does not stop them from being social entrepreneurs. How
big or influential they become is entirely irrelevant to their status,
as it is with entrepreneurs generally. Treating the extent of their
growth or influence as an indicator of their status is a category
error, like saying only large buildings with penthouses are really
buildings, and my house therefore doesn’t count as a building.
Similarly many entrepreneurs fail. This doesn’t stop them being
entrepreneurs. So it is with social entrepreneurs. Many will fail. This
doesn’t stop them being social entrepreneurs. The above argument
applies. There may be some conceivably valid reasons for wanting a
definition, such as the one given at the end of the article – that
people will be confused if you don’t – but this reason has nothing to
do with the size or influence or success of social entrepreneurs."

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The Third Sector budget…

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Not much to report in the budget (well, obviously lots to report: a cut in income tax, inheritcan tax threshold raised, an Environmental Transformation fund, and, shock of all shocks, the tax on cigarettes has gone up….) as far as the third sector is concerned.

  • No decision on unclaimed assets, though the emphasis seems very much on youth services on financial capability/inclusion.
  • Social enterprise action plan gets a mention, including the Community Investment Tax Relief model for encouraging investment; the change there is that CDFIs will have more flexibility in how they can use funds raised under CITR (see below for the technicalities)
  • Futurebuilders will be open to ALL third sector organisations from spring 2008; i.e. they’ve widened the criteria to cover all areas of service delivery…
  • The biggest new thing, as far as I can see, is the £80 million to promote "community action and voice" through core-funding for grassroots community organisations; this looks genuinely interesting, and should get a mighty hooray by the looks of it: exactly the kind of devolved-to-the-grassroots-grants-are-needed-as-well-as-loans type funding that SSE (amongst others) has been calling for. It will be administered by the Office of the Third Sector, and "channelled through third sector partners at a local level, such as Community Foundations"

The OTS has a press release about it with more info, along with the Futurebuilders and CITR developments in more detail…

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The Social Apprentice has Bright Ideas…

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Following hot on the heels of the Dragon’s Den not getting social enterprise comes some exciting and vaguely related news… Tim Campbell, first winner of the UK Apprentice, is leaving Amstrad behind to start on two projects of his own. One is about male grooming, but the other, entitled the Bright Ideas Trust, will be a "social enterprise initiative". No concrete details as yet, although it plans to " give away at least £1 million a year to budding entrepreneurs". Interesting stuff: Tim has clearly seen the light… 

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SSE Fellows: update on activity

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As I flit between the Scylla and Charybdis of CapacityBuilders Destination 2014 and the new proposal for a Social Investment Bank (see also this Observer interview with Sir Ronald Cohen), news comes in from around our Fellowship network:

 

– first up, Charles Armstrong, founder and CEO of Trampoline Systems, which was developed with and at the SSE (it also powers our extranet), writes to tell us that they have received £3million funding from US investors; fabulous news, and also a boost for UK-based 2.0 tech companies more generally

 

Chris Dabbs, who is both a Fellow and helped establish and run the Salford SSE pilot programme, is now also the co-ordinator of the NHS Social Enterprise Network; Chris e-mails to point me to an article he wrote in Health Services Journal, entitled, Taking care of business (registration/login required; can e-mail a copy if wished) which focuses on the support that (social) entrepreneurs need for the NHS to really be transformed in the way we would all hope….well worth reading

 

– An SSEI (Ireland) Fellow, Anna Lo, has become the first ever ethnic minority candidate to be elected in Northern Ireland and, indeed, the first Chinese candidate ever to be elected to any UK assembly or parliament. An amazing achievement.

 

– Jude Habib, who graduated from the London programme in December 2006, points us to her spangly new website which is up and running: her organisation, SoundDelivery is taking "a fresh approach to communications for the third sector", so check our their recent work and activity….

 

– finally, our chief exec Alastair Wilson, himself a Fellow of the first SSE programme back in 1998, features in Regeneration and Renewal’s current edition (online here but subscription required) under the headline "Have-a-go helper". It’s a good introduction to SSE, covering the methodology (learning by doing, case study driven), the importance of legitimacy ("Nobody appoints a social entrepreneur….it’s very important that they see it is possible to create things from scratch"), its track record (85% projects still running), its history (Michael Young and the importance of personal motivation), and why (and how) the government should invest in supporting social entrepreneurs….

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