About Social Entrepreneurship and Social Innovation - Definitions and Examples

From business entrepreneurship to social entrepreneurship

Social entrepreneurship is one of the fields that can change the direction in which the business environment is heading for some time now. The business environment dominated by greedy businesses interested only in profit. It might sound like an exaggeration but social entrepreneurship is, indeed, more than a chic concept – it is a phenomenon that brings the businesses world closer to people.

Social Entrepreneruship and Traditional Entrepreneurship
source: www.socialsectornetwork.com

What is the difference between a business entrepreneur and a social entrepreneur?

Business entrepreneurs are focused on the profit gained by satisfying the needs of their customers to extend the influence of their business to an even greater number of people. This is done by finding some gaps in the market and having an offer that fills that need.

Social entrepreneurs, on the other hand, focus on the wellbeing of people and the development of the community they are part of. They identify barriers and gaps in these environments or among the people in these environments and act towards filling those gaps.



How do entrepreneurship principles apply in the social sphere?

To be a successful social entrepreneur (the success is measured by the barriers and gaps which are being filled), there are a few principles that need to be applied. These are also the principles that apply to business entrepreneurship.

 

1. The entrepreneurial mindset defies tradition and traditional values

The most successful entrepreneurs are those who have always done things differently. Different from how they were done before them. This is how they managed to guide the evolution of certain industries and the way we live today. They are visionaries and although they look like they are diving head in, their brave decisions are actually taken after serious analysis and research.

World cloud for the word ENTREPRENEUR
source: https://www.business2community.com/

2. Both types of entrepreneurship  know the market and make use of it – some to make profit and others to make a change.

Social entrepreneurs need to use the mechanisms that make an industry work to produce social change. This is done by developing innovative business plans and business models which are also sustainable.

 

3. Entrepreneurs are humble but they aim high!

One of the main qualities of successful entrepreneurs is humbleness. What does it mean? Ideally, an entrepreneur always knows that his idea is not perfect and he is always open to other opinions. This translates into openness to new.  An entrepreneur should always aim towards the success of his business, project or community.



4. Entrepreneurship embraces failure and uncertainty

Starting on the road of entrepreneurship without acknowledging the risk of failure and without an open mindset, especially towards experimentation is simply ignorant. In a somehow stoic manner, the entrepreneurial mindset, both in the business and social spheres, is about how failure is approached. No matter how cliche it sounds failure is, indeed, the mother of success in business and entrepreneurship.

 

Examples of social entrepreneurship

There are several examples of social entrepreneurship, most of them having to do with certain disadvantaged communities.

Sweater Tag with title - Made In Roșia Montana
source: https://www.facebook.com/MadeInRosiaMontana/

Made in Roșia Montană

Made in Roșia Montană is a Romanian company, founded in 2013 by Tică Darie, which deals with the production and selling of wool products. The special element of this business is that the products are handmade by local women. The founder wants to grow the business so knitting can become a full-time job for those women.

Another social aspect of the business is that 90% of the profit is reinvested in the production of wool products while the rest of 10% is invested in education.

You can find out more on the Made in Roșia Montană website.

 

Mesteshukar ButiQ

Another social entrepreneurship example from Romania is Mesteshukar ButiQ – a social enterprise which brings the antique art of rroma craftsmen. Created as a partnership with other organizations, they opened a store in downtown Bucharest where they sell traditional products and jewelry.

Find out more on the Mesteshukar ButiQ website.

 

BizGees – Arts4Refugees

An international social entrepreneurship example is Arts4Refugees, a project by BizGees that aims to support refugees in an entrepreneurial way. Arts4Refugees works with millennial women to create four different types of products – artistic products created by demand, virtual fashion, fashion pieces for rent and designer bags.

Find out more about the project on the Arts4Refugees website.

Arts4Refugees
source: https://www.facebook.com/Arts4Refugees

Social businesses and social enterprises

Like the difference between business entrepreneurs and social entrepreneurs, the same goes for the difference between businesses and social enterprises – the social business’s aim is to solve a social problem. What are those social problems?

Well, for starters, there are 17 sustainable goals developed by the UN. These 17 goals are, let’s say, a priority for a better functioning of our planet. Now, of course, it is impossible for one single business to be able to solve all of those or to at least solve one of the problems in its entirety, but if more business would work towards these goals, they would be solved. These goals are:

• No poverty

• Zero hunger

• Good health and well-being

• Quality education

• Gender equality

• Clean water and sanitation

• Affordable and clean energy

• Decent work and economic growth

• Industry, innovation, and infrastructure

• Reduced inequalities

• Sustainable cities and communities

• Responsible consumption and production

• Climate action

• Life below water

• Life on land

• Peace, justice and strong institutions

• Partnerships for the goals

UN s 17 Sustainable Development Goals
source:https://news.un.org

So, how can a business aspire towards attaining one or more of these sustainable goals and become a social business? By developing a sustainable business model.

 

What is the Sustainable Business Model?

The Sustainable Business Model is an instrument based on the classical Business Model Canvas which also takes in consideration the element of sustainability. In other words, it helps you see each element of the Business Model Canvas as elements which contribute to the sustainability of your business:

Sustainable Business Model Canvas
source: https://www.threebility.com/

• Positive Impact – What are the positive effects of your product on society, the planet, and the economy of your organization? How can you maximize these?

• Negative Impact – What are the negative effects and how can they be maximized?

• Sustainable Partners – Who can you partner with to become more sustainable? How can you improve the product chain to make it more transparent and circular?

• Sustainable value creation – How can the main activities be adjusted to be more sustainable? Are there any technologies that can be used for this purpose?

• Sustainable Tech & Resources – What sort of resources are necessary? Natural, technological, or energetical? Can they be replaced in any way to become sustainable?

• Sustainable Value Proposition – What problem is your organization solving and what value is this creating for it? Can you influence sustainability among your customers?

• Sustainable Customer Relations – Which of the interactions you have with your customers satisfies them the most and proves to be also sustainable?

• Sustainable Channels – How can you make the distribution channels more sustainable? How can you communicate the fact that your organization is sustainable?

• Responsible Customers – How can you encourage your customers to be sustainable?

• End of life – What happens with your product at the end of its lifecycle?

• Cost Structure & Additional Costs – What are the necessary costs and investments? Which resources are the least sustainable? Can they be replaced with others even more sustainable?

• Subsidification – Are there any taxes and subsidies for your business?

• Revenue & Sustainability Premium – What are the revenue sources? Are your clients willing to pay extra for the product of a sustainable business?

To measure the sustainability factor of some of these aspects you can use the Sustainability Impact Canvas

The Sustainability Impact Canvas
source: https://www.threebility.com/

Types of social enterprises

By taking into consideration three factors: motivation, the use of income and responsibility, we can identify four types of organizations from the sphere of social entrepreneurship.

 

The four types of social organizations fit between two extremes – the traditional non-profits and the traditional for-profits, the traditional businesses we were talking about in the beginning. So, after the traditional non-profits, the first organizations in the sphere of social entrepreneurship are:

matrix showing social enterprises
source: https://www.intechopen.com/

Non-profits with Income-Generating Activities – These types of organizations incorporate, along their principal activities, commercial activities that generate additional revenue. All the profit is reinvested in the organization’s activity.

Such an example comes from the Washington DC Zoo which sells the elephants’ manure as a natural fertilizer. Even though there is profit, it is small.

 

Social Enterprises – These are the organizations that have specific social objectives which are the main purpose of the organization. They want to maximize both the profit and the benefits of society or the environment. The difference between the non-profits mentioned earlier and the social enterprises is that the latter are operated as a business.

If in the previous example, manure was sold as fertilizer, at another zoo, it is turned into a premium high-quality paper that is then sold to chain stores. There are even employees assigned particularly to these tasks.

Patagoina Dont Buy This Jacket AD
source: https://teamtipton.com/

Socially Responsible Businesses – These are traditional for-profit businesses that are aware of the social element and incorporate sustainability in their business activities. Lego, for example, has been focusing, for the past couple of years, towards climate change and reducing waste. In 2015, they invested 150 million dollars towards these issues and by 2020 they plan to switch only to renewable energy.

Corporations practicing Social Responsibility – These are also traditional for-profit businesses that practice social responsibility. Unlike socially responsible businesses, corporates practicing social responsibility fully integrate this element in their activity.

A good example is Patagonia, an outdoor clothing producer that builds its products and processes in such a way that they are environment friendly.

Social Innovation

First, we define innovation as the successful application of an idea, through processes which improve or even create new products, services or even new industries. An idea is innovative only when it is desirable by the customers, feasible from a technological standpoint and financially viable.

Social Innovation is the act of creating new solutions (products, services, business models, industries, or processes) that satisfy a social need. Social innovation either satisfies a need that wasn’t satisfied until then or wasn’t satisfied efficiently and creates new capabilities, relations, and more efficient use of resources and value. 

Hand holding coins and plant as a symbol for social innovation
source: https://teamtipton.com/

Social Innovation shifts the focus from the wellbeing and the needs of the consumer to those of society.

Unlike social entrepreneurship and social enterprises, social innovation is more about ideas and concepts. If in the case of social entrepreneurship, we are talking about a mindset applied in a social enterprise through a sustainable business model, social innovation is more about the idea.

When it comes to the idea, social innovation usually appears through the shape of funding and large-scale projects. Another difference between social innovation and social entrepreneurship is that social innovation satisfies the beneficiary in a superficial way while social entrepreneurship teaches the beneficiary to solve his or her own needs. Like the saying goes – „Give a man a fish and you feed him for a day, teach a man to fish and you feed him for a lifetime.”

Social Innovation Trends

We found five trends influencing social innovation, in a 2015 guide and we truly believe these are still valuable today:

 

1.Capital for social innovation is growing

This growth of the capital is owed to several factors such as: Increasing financial influence of millennials, the fast-paced growth of crowdfunding platforms and an increasing number of institutional funders focusing their investments on innovation.

 

2. Mobile solutions will focus on individual empowerment

The rise in accessibility towards mobile phones was the basis of a new category of social innovations that focused both on the development of the individual as well as the development of the community. In this category, we can see example such apps or mobile features which deal with medical services.

 

3. Large NGOs and agencies will prioritize innovation

Even though large NGOs and organizations are the most involved in the field of social innovation, they realized somewhere around 2015 that this means that they miss a lot of big opportunities. This is why they decided to pay closer attention to the innovation industry because from their position it is easier to identify innovation opportunities.

Cartoon hands holding money
source: https://www.crowdengine.com/

4. Data intelligence will transform social solution design

A lot of social problems are caused by traffic or meteorological phenomena and these can easily be solved by using Big Data. What if this valuable resource can also be used for problems such as homeless people and human trafficking?

5. Corporations will be more vested in addressing social problems

This trend emerged in 2015, where big corporations were not only offering benefits to stakeholders anymore but also to all who were involved in the organization. Even more, in those times, any big corporation had to invest in one way or another in social causes, in order to stay relevant for the big crowd.

Other than the 5 trends that influenced the sphere of social innovation in 2015, there is another list from 2020. So, the social initiatives from 2020 are focused towards these directions:

  1. The 17 sustainable development goals defined by the UN
  2. Urbanization
  3. Migration
  4. Social systems
  5. Climate change
  6. Technological development
  7. Circular economy
  8. The future of work.

Well, other than these 8 directions, the current COVID-19 situation definitely focused the attention towards the public health system. We will show some examples.

Social Innovation Examples

#EUvsVirus Hackathon

In April 2020 took place one of the biggest global hackathons – #EUvsVirus.

Hackathons are events where different people with different backgrounds and expertises, from developers to people with know-how in business or marketing gather in a formal environment to come up with solutions for different problems.

#EUvsVirus HACKATHON Cover
source: // https://www.euvsvirus.org/

#EUvsVirus is a Hackathon that took place as a reaction to the COVID-19 pandemic. Most of the winners of this edition are great examples of social innovation. Among these, there are:

Team Discovery (Hungary) – monitoring system for patients in order to minimize the contact between these and the nurses.

Linistry for safe retail (Hungary) – solution for social distancing in the retail industry.

Aidbind (Bulgaria, Germany, Malta, Sweden and Switzerland) – solution for the lack of information and communication between demand, offering and financing of medical products obtained through donations and charity.

You can see the rest of the results here. These solutions are perfect examples of social innovation in various fields, especially in the context caused by the coronavirus pandemic.

Social Impact Award.

Social Impact Award is an educational program in social innovation and an idea competition for teenagers who want to make a positive change in society in a constructive way. The mission of the project is to promote social entrepreneurship among teenagers from all around the world. }n 2019, the project was present in 17 countries from Europe, and Asia. In Romania, the project is organized by Social Innovation Solutions and Global Shapers Bucharest Hub, with the support of Enel Romania.

Here you can check out some of the winning solutions from Romania, from previous editions of Social Impact Award. Among these, there are solution from various fields such as education, mental health, plastic, and many other fields which, as you can see, are related to the sustainable development goals developed by the UN.

Man holding phone - CitizenLab
source: https://www.facebook.com/citizenlabco/

CitizenLab

CitizenLab, founded in 2015, in Bruxelles, offers a digital platform which can be used by the state institutions from the public sector to consult with citizens about local programs.

The platform aims to offer more power to the citizens. This is something that, as the founders say, can lead to a more efficient decision-making process.

Conclusions. What you need to remember:

In this article, we tried to present all the important concepts when it comes to the fields of social innovation and social entrepreneurship. Even though they both fit in the same sphere of activity, both the approach to problem-solving and the activities necessary for solving those problems are different. So, what should you remember:

  • The difference between social entrepreneurship and business entrepreneurship
  • How entrepreneurial principles apply to the social environment
  • The sustainable business model
  • Types of businesses and social enterprises
  • The difference between social entrepreneurship and social innovation.

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