Entrepreneurship v Social Entrepreneurship: What's the Difference?
In considering the differences between entrepreneurship and social entrepreneurship, there should be immediate consideration given to the nature of their business model. For traditional entrepreneurs, a focus will be placed almost exclusively in their model on profits and keeping returns high for investors. There is not a need to have concern for worker wellbeing, environmental factors, or society at large, that is - unless they want to.
Social enterprises, however, will have components of a social return as part of their model. They enter the market not simply because the demand is there and they can supply, but that a communal need is present and has been left unaddressed. Profits should be considered for the intention of sustainability, but other intentions will be present in the way business is conducted. Investors in these enterprises that benefit the social good should expect potential dips in return, especially during times such as COVID when the needs of the community may go beyond what is typical.
It should be noted that Deborah Doane indicated her article for The Guardian that social enterprises in India funded by Britain's Department for International Development are expected to maintain a "12% return of investment" for the aid fund - which was also highlighted for being rather unusual.
Distinctions between these enterprises should exist but potentially with a clearer everyday understanding. What should stand out, however, is a clear focus on the communities being served while also having a profit model - leaving room for the third comparison of social enterprises and non-profits who by their nature are focused on a social need as well, but are more limited in their actions including keeping profits for personal gain.
Between both forms of entrepreneurs, if more emphasis had been put on social innovation and entrepreneurship prior to COVID-19, I fully believe marginalized communities would have been better prepared to weather this seemingly endless storm with stronger economic security. If we had invested in entrepreneurs that wanted to bring innovative ideas to their communities sooner, there could have been stronger economic safety nets via additional localized jobs and community ownership.
Cover Image Provided by Disabled and Here
Photographer: Chona Kasinger.