GEM 2009 SPECIAL TOPIC SOCIAL ENTREPRENEURSHIP Rachida Justo and Siri Terjesen

1. GEM 2009 SPECIAL TOPIC SOCIAL ENTREPRENEURSHIP Rachida Justo and Siri Terjesen

2. Social EntrepreneurshipThe case for a Definition • No universally agreed-upon definition • Boundaries in which social enterprises operate: Blurred boundaries between public, private and nonprofit sector • Divergent opinions: • Traditional US-base view: Nonprofits that are innovative • Gregory Dees (Duke university): Emphasis on hybrid models of for-profit and non-profit activities • Jerr Boschee (Institute for Social Entrepreneurs): social entrepreneurs are those that generate earned revenue from their activities • SSIR: Social entrepreneurs differ in the Outcome and nature of Social Action

3. What makes social entrepreneurs different from traditional entrepreneurs? • Social entrepreneurs set out with an explicit social mission in mind. Their objective is to make the world a better place • The best measure of success is not how much profit they make but rather the extent to which they create social value • They are the reformers of our society today. They attack the underlying causes rather than simply treating the symptoms • Use of business and management tools. Engaging in a continuous process of innovation, adaptation and learning • Their actions have the potential to stimulate global improvements in their chosen arena • Social mission • Measure of success • Change agents • Methods of operations • Global reach

4. What makes social enterprises differentfrom other non-profit organizations? • Excellence measurement: Social enterprises stress values that have to do with excellence and performance measurement. They do not use the non-profit status or social mission as an excuse for not having a businesslike skill set. • Social and commercial methods: Social enterprises are a hybrid of commercial and philanthropic methods

5. The Social Enterprise Spectrum

6. The Social Enterprise Spectrum

7. Trends in research and practice • A move towards the middle...an increasing convergence of social enterprise and traditional business • Social enterprises will move towards the enterprise spectrum to become more sustainable and efficient • Businesses will explore ways to move towards the social end of the spectrum to inspire greater commitment • Placing organizations on a continuum: the differences between social and business enterprises is a matter of degree, rather than kind • Few empirical research on the subject, but improving…

8. Research in Social Entrepreneurship • A need for case studies characterizing “hybrid” social enterprises • What’s the difference between a social enterprise and a socially-responsible firm? • Success measurement • What is success for the social entrepreneur? And for the funder? • What determines success in creating social value? How do you measure it? • Competition: how does it differ?

9. Research on Social Entrepreneurs • What are the motivations of Social Entrepreneurs? • Altruism? Uneasiness with the status quo? • What gives SE leadership? • Cultural and societal impact? Family influences? Societal context that gives rise to SE? • What abilities are needed by the SE leader? • How do SE leaders contend with role conflict and role ambiguity?

10. Proposal: GEM’s apporach to SE • Definitional issue • Capturing the whole phenomenon • Address specific definitional issues • Non for-profit Vs. For-profit • Innovation • Impact and performance measurement • What value is being created (environmental, social, economic) • Is social value being measured? • What metrics are being used?

11. 1. Definitional issue • Zahra et al.’s (Forthcoming) broad definition: ‘Social entrepreneurship encompasses the activities and processes undertaken to discover, define, and exploit opportunities in order to enhance social wealth by creating new ventures or managing existing organizations in an innovative manner.’

12. 1. Definitional issue: First set of questions • SE1 Are you alone or with others, currently trying to start any kind of social, voluntary or community activity, venture or initiative? This might include providing subsidised or free training, advice or support to individuals or organisations; profit making activity, but where profits are used for socially orientated purpose; or self-help groups for community action. • SE2 Can I check, is this activity, venture or initiative the same one that you described in detail earlier, or is it a different one? • SE3 Will you personally manage all, part or none of this intended activity, venture or initiative?

13. 1. Definitional issue: First set of questions • SE4 Perhaps we were not clear on this question… Over the past 12 months have you done … • SE5 Has this activity, venture or initiative provided goods or a service to others, or received external funding, for more than three months? • SE6 What kind of product or service will be provided by the activity, venture or initiative you are trying to start?

14. 1. Definitional issue: Second set of questions • For Profit Vs non for profit • SE7 Will any of the revenue for this activity, venture or initiative come from income, for example through sales of products or charging for services? • SE7a What percentage of total income will come from the sale of products or services?

15. 1. Definitional issue: third set of questions • SE as Innovation • SE13 Is your activity, venture or initiative offering a new product or service? • SE14 Is your activity, venture or initiative offering a new way of producing a product or service? • SE15 Is your activity, venture or initiative offering a new way of delivering a product or service? • SE16 Is your activity, venture or initiative offering a new way of promoting or marketing a product or service?

16. 2. Impact and performance measurement Any measurement? SE8 Are you measuring or planning to measure the performance of the activity, venture or initiative you are trying to start? Currently measuring………………………………………….........1 Planning to measure in the future ………………………...2 Not currently measuring or planning to measure………………..3 Don’t know / Refused……………………………………..………...4 / 5

17. 2. Impact and performance measurement • What value ? • SE9a Businesses may measure their performance according to the ability to generate economic, societal and/or environmental value. In other words, a business may measure its performance by profit, impact on people and/or impact on the environment. Please allocate 100 percentage points across these categories as it pertains to how you are measuring the performance of your business. • _____% Profit/Economic (e.g. financial performance of your venture) • _____% Societal/Community (e.g. benefit to people living in your society /community) • _____% Environment/Nature (e.g. nature, ecology) • What metrics? • SE10 What specifically, are your performance measures?

18. GEM’s apporach What do you think?

19. Social EntrepreneurshipThe earned income view “Unless a nonprofit organization is generating earned revenues from its activities, it is not acting in an entrepreneurial manner. It might be doing good things, creating new and vibrant programs: but it is Innovative not entrepreneurial” Boschee and McClurg

20. The earned income view Key Distinctions Difference between “entrepreneurship” and “social entrepreneurship” • “Entrepreneurs have the ability to take a business to the point at which it can sustain itself on internally generated cash flow” • Social entrepreneurs: double or blended bottom line Difference between “sustainability” and “self-sufficiency” • Nonprofits can achieve “sustainability” through a combination of philanthropy and earned revenues • “Self-sufficiency” as the ultimate goal of social entrepreneurs. Can only be achieved by relying completely on earned revenues: Difference between “innovators”, “entrepreneurs” and “managers” • Innovators are Dreamers, entrepreneurs are Builders and managers are Trustees.

21. A third view on Social Entrepreneurship Pure forms of Social Engagement Social Service Provision Social Entrepreneurship Direct Nature of action Social Activism Indirect New equilibrium created and sustained Extant system maintained and improved Outcome