How do you define social entrepreneurs
Definition of social entrepreneurship
Social entrepreneurship is a new and evolving concept. It refers to a specific company and business model that, in addition to maximizing profits, is also intended to provide social and charitable services.
Breakdown of Social Entrepreneurship
There are many discussions and theories surrounding this term. While some consider "social entrepreneurs" to see owners of for-profit businesses and directors of charities and nonprofits, others disagree. The latter, on the other hand, are firmly convinced that the real meaning of social entrepreneurship is more related to a profit-oriented and entrepreneurial orientation. That is, it is a concept that defines the mission of those companies that offer innovative and useful goods or services with a social value. In addition, such a company usually relies on a modern and revolutionary organizational model that promotes and cultivates values such as employee engagement, the environment and community. It also develops sustainable production processes and methods to reduce emissions, waste, etc.
An example that illustrates this abstract concept could be a company that makes solar panels. It meets all the requirements of a social enterprise:
• The status of a for-profit company
• Extensive investments in research and development to develop new technologies
• A productive process that minimizes costs, waste and pollution.
• A completely new supply chain management
• A core business based on the capitalist concept of “commercial exchange”.
• A core business that focuses on creating a social and positive impact.
Advantages and disadvantages of social enterprise
Social entrepreneurs usually develop innovative goods and processes that can benefit society. This creates a kind of mixture of profit maximization and social assistance.
Entering this market has many advantages. First, you can create and supply a great demand for a brand new product that does not suffer from competitive conditions. Second, developing innovative strategies and processes that minimize waste and costs can enable you to seek long-term sustainability that many other nonprofits are unlikely to achieve.
However, it is still an industry that seeks to develop and differentiate itself. The reason for this is primarily of a financial nature: shareholders and investors are actually reluctant to forego high dividends and market value increases (short-term) for the pursuit of ROS (Return on SOCIETY). That said, these types of businesses tend to have a hard time finding capital to start their business with.
Closely related to the above topic is the phenomenon of ethical investment. Nowadays, more and more investors feel the need to make a difference with their money. That is, they are willing to invest in companies that may offer above-average returns but high social returns.
These financial operations are not yet the norm, but rather the exception, as they require short-term, easy and quick capital gains and a culture and tradition of speculation. Yet we are moving into an era where this practice is becoming even more common.
To sum up, the rise of social entrepreneurship, although still debated, does not seem to be stopping anytime soon. Analysts and industry experts seem to place more emphasis on the topic. In addition, the stakeholders consider the question of CSR to be urgent and necessary today. Companies that show real interest and commitment to good causes will outperform those who don't. In the long term, they will attract investors and achieve competitive advantages and sustainability.
What is a social entrepreneur?
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