I liked the phrase social entrepreneurship instantly when I first heard it. It’s doing well by doing good, I assumed, building businesses that help people. A business doesn’t have to not make a profit to do good, so the idea of social entrepreneurship makes sense. Teach kids to read, help people stay healthy, clean the environment, fight discrimination, and make a fair profit doing it. The world will be better for it.
But wait: Don’t all businesses have to make the world better, and solve problems, just to survive over a long term? A business can poison people or the Earth, or cheat people, for a while, maybe … but eventually that business will die. Won’t it?
So doesn’t all new business have to be social enterprise? Or is it not so much doing good as just simply not doing harm? That’s a tough question.
Confused, I asked Google to <a style="color: #006600; font-weight: bold; text-decoration: underline; background: none; padding: 0; margin: 0;" href="http://www.google.com/search?q=define%3A+social+define: social entrepreneur<a style="color: #006600; font-weight: bold; text-decoration: underline; background: none; padding: 0; margin: 0;" href="http://www.google.com/search?q=define%3A+social+ship. The illustration here shows some of what comes back. It talks of making social change, solving social problems, and creating innovative solutions to society’s most pressing social problems.
What’s hard, though, is working some of this into real life. If social enterprises solve “society’s most pressing problems,” then damn, that rules out a lot of very good and very well intentioned business that I would have called social enterprise. Does a restaurant serving healthy, local, organic food qualify? How about a business selling all-natural no-animal-testing cosmetics? What about a business selling electric cars? Chevrolet and Nissan (the Bolt and the Leaf) are social enterprises now? And if you start to expand, then what about AT&T (communication) and Exxon (energy)? Are they social enterprises? Maybe they trip up on the “innovative” qualifier, as in “innovative solutions to society’s most pressing problems.”
I’m still confused. I will say, though, that in my lifetime I’ve seen a gradual but steady increase in the general consumers’ concern for social and environmental considerations. Frustratingly slow, perhaps, but it’s there. And it also seems like we’re in a new age of transparency, whether the big behemoth companies like it or not; bad businesses have trouble keeping their badness secret for very long.
The underlying story of a business, the people behind it, and its values, these all matter more now than they used to.
Or am I just being too optimistic?
3 thoughts on “Is All Good Business Inherently Social Enterprise?”
I share the belief that all good businesses are inherently social enterprises. All else being equal and on a long enough timeline, businesses doing harm ought to put themselves out of business.
However, the hard part is that all else is not equal, and the timeline for bad businesses to evolve out may be longer than the human lifespan. Big players in the marketplace collude with the government and abuse their position to preserve their position. They create barriers to entry and increase costs so that better alternatives can’t compete. And collectively forcing down wages to increase wealth among investors creates a race to the bottom and towards scale, as consumers search out ever-cheaper alternatives to preserve their quality of life. It’s hard to care about eating locally when farmers markets cost twice as much as packaged food, for instance. Or when the farmers don’t take food stamps.
That said, I do share your optimism, and do think the web has the potential to shift the power towards those doing good work. But still, powerful interests (Google, Microsoft) control access to the web’s information. Whether other sources of collaboration and social sharing will start to erode that power or make it less relevant remains to be seen.
There are companies like TOMS Shoes and Sun Oven that make social concerns part of their core values. Most people don’t know that IBM sponsors a nonprofit called World Community Grid, which crunches research data to help cure diseases.
You are right, even if a company isn’t particularly transparent (Halliburton, Apple, AT&T…) news travels a lot faster these days — as long as the people in charge let it. Twitter, Facebook and other social media are breaking down that barrier, but it’s still curious how some things just never percolate up.
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