National Conference on

Indian business scenario and Jobless growth

May 10-11, 2012

Social Entrepreneurship: Issues and Challenges

By
Santhosh Kumar K. L.
And

Mizba saher
M.Com. (Previous) DOS in Commerce, PG Centre, Vidyavardhaka First Grade College, University of Mysore, Mysore. +91- 9141489872, santhoshkumarkl@gmail.com +91-9611526466, mizbasaher@yahoo.com ** We are grateful to Dr. M. Shivalinge Gowda., Associate Professor, DOS in Commerce, PG Centre,
Vidyavardhaka First Grade College, University of Mysore, Mysore, who has constantly encouraged us in preparing this paper. 1

Abstract Entrepreneurship is said to be the dynamic force which results in wealth creation and social transformation. Many scholars viewed entrepreneurs as agents of change. In India Entrepreneurship development is highly recognized to empower rural entrepreneurship and more so, in bridging the gap between urban and rural areas. Entrepreneurs are said to be the innovators who faces the risk and convert them into opportunity. In India keeping in view with the pace of economic development the government has come forward to introduce various schemes for empowerment young entrepreneurs. Social Entrepreneurship is of recent origin of India. Social Entrepreneurship is a new concept of with an objective of addressing various social problems and to bring social transformation. In this background, an attempt has been in this paper to discuss some key issues and challenges pertaining to social Entrepreneurship and social Entrepreneurs.

Introduction Entrepreneurship is as old as human history itself. After the era of industrial revolution entrepreneurship playing a major role in the process of economic development worldwide. The new age witnessed by the revolution of technology, given the boost for exploitation of resources for serving the consumers in the market in a better way. The concept of social entrepreneurship has coined in the new millennium. The social entrepreneurship though it is new in language it is not new as a phenomenon. The terms social entrepreneur and social entrepreneurship were used first in the literature on social change in the 1960s 1970s [1]. Social Entrepreneurship A New Concept Social entrepreneurship a new concept with a passion of social mission to convey the meaning of business-like discipline, innovation and determination commonly associated with hightech entrepreneurs. As such the Social entrepreneurship covers not only innovative profit oriented ventures, but also not for profit institutions. The major objective of Social entrepreneurship is said to be improvement of quality of life of the society. Though the concept of Social entrepreneurship is gaining popularity, it means different things to different people [2]. Some of them view it as the social responsibility of business owners; some of them were of the opinion that Social entrepreneurship is to start not for profit organization; while majority view that starting profit seeking business venture with the social objectives. However, Social
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entrepreneurship may be defined as the process of adapting a mission to create and sustain social value through recognizing and pursuing new opportunities through continuous innovation, adaptation and learning to serve that mission. Role of Social entrepreneurs Social entrepreneurship has been recognized as a wheel for serving socio-economic purpose particularly in third world countries. Social entrepreneurship provides a link between social objectives and economic development policies of the country. The Social entrepreneurship can play a major role in the following ways:
1. Employment development: Social entrepreneurship creates job and employment

opportunities. It is estimated that 1-7 percent[3] of the people employed in the Social entrepreneurship sector. Further social enterprises provide employment opportunities and job training to such segments of the society who are at disadvantage position (Ex: long term unemployed, disabled, homeless, gender discrimination etc.,).
2. Innovation: Social entrepreneurs develop and apply innovation important to social and

economic development and develop new goods and services[3]. Major societal problems such as HIV, mental ill health, illiteracy, Crime and drug abuse are addressed through innovative ways. Various schemes have been devised and implemented through the support of voluntary organizations and non-governmental organizations in India.
3. Social Capital: The importance of Social entrepreneurship is mainly recognized in creating

social capital which is most important than economic capital. The Social entrepreneurship gives imputes to build long term social relations, develop human resources and to bring co-ordination among various sections of the society in the long run.
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4. Equity promotion: Social entrepreneurship focus on developing society on equitable lines

by addressing social issues. Many social problems have been tackled through social mission, which reflects in sustainable development of the economy rather than pure profit maximization. A social enterprise seen as a positive force providing leading edge

innovation to unmet social needs. Social entrepreneurship tries to work with in the overall social and economic frame work which deserves much attention from academicians and policy makers.
5. Balanced use and allocation of resources: Social enterprises contribute to a more

balanced use and allocation of resources available at a local level to the advantage of the community. Social enterprises succeed in promoting inclusive governance models that empower the local community in strategic decision making (sugden and Wilson, 2005)[4]. The Social enterprises support internalization of the economic growth generated to the advantage of the whole community. The communitarian and participatory approach embraced by Social enterprises enhances the sense of the social responsibility of the community towards general interest issues[5].
6. Support to institutionalization of informal activities: Social enterprises can support the

institutionalization of informal activities belonging to the underground economy. Several social enterprises like initiatives arise informally and become formal once they are legally recognized[6]. Social enterprise initiative can definitely, develop an enabling environment, can facilitate irregular workers to get out of the black market and regularize their positions.

Social Entrepreneurship issues and challenges

Issues:
1. Business and social entrepreneurship: Peter Drucker is of the opinion that

entrepreneurship necessarily imparts innovative ideas and to capitalize profitable ideas for the betterment of the society. He emphasizes the need for business entrepreneurs. The business entrepreneurs always searches for change, responds to it and exploits it as an opportunity [7]. However, it is necessary to distinguish the social entrepreneurship from business entrepreneurship. For social entrepreneurs, the social mission is explicit and central. The social entrepreneurs perceive the opportunities and make efforts to materialize these opportunities in such a way that they serve the purpose of mission objectives. While business entrepreneurs are subject to market discipline the social entrepreneurs emphasize on creating sufficient social value and improving social conditions.
2. Defining social entrepreneurship: We are at a critical point in the lifecycle of social

entrepreneurship. The concept continues to gain recognition, even though it is neither widely nor well understood. If it is to have lasting, positive social impact, proponents will have to be strategic in building a strong community of practice and knowledge, and in strengthening the ecosystem that supports practitioners[8].
There appears difference of opinion among the academicians about clear cut definition of social entrepreneurship. The social entrepreneurship covers not only innovative profit oriented venture, but also non-profit institutions. The major objective of social entrepreneurs is said to be social value creation by utilizing resources as effectively as possible. In this background it is 6

necessary to define social entrepreneurship. Stevenson defines the social entrepreneurs as change agents in the social sector. The social entrepreneur play major role by[9]: a. Adopting a mission to create and sustain social value,

b. Recognizing and relentlessly pursuing new opportunities to serve that mission, c. Engaging in a process of continuous innovation, adaptation, and learning, d. Acting boldly without being limited by resources currently in hand, and e. Exhibiting heightened accountability to the constituencies served and for the outcomes created.
3. Natural and business environmental issues: The social entrepreneurship approach is used

to address a wide variety of social issues. They may choose to address pollution, emissions, rain forest destruction, health care issues and such other issues. Some of the social entrepreneurs distinguish social environment from that of natural environment many distinguish between natural environmental issues like water, air and natural resources.
4. Social entrepreneurship organizations: Now a days, it is felt that there is a need for

establishing social entrepreneurship organizations. It is interesting to note that social enterprises tend to be concentrated in several distinct fields. These include education and training, retail consulting, food service and the arts[10]. In terms of social mission the top areas include work force development, community development, housing education and health care. These social enterprises operate as a part of larger group; some choosing profit structure while others choosing a non- profit subsidiary structure or a joint venture model.
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5. Ethical issues: social entrepreneurship organizations are based on ethical principles. They

adopt concepts like virtue, justice, generosity and charity, which benefit both the individual and their society. They are the guiding principles which will yield greatest benefit to the larger number of peoples.

Challenges:
1. Question of Identity: One of the very important challenge is about the identity. One of the

basic question needs to be addressed is what makes an individual or an organization a social entrepreneur?. Many practicing social entrepreneurs do not want to identify with the organization. It is because they see it as the new thing. Therefore, social entrepreneurship as it is being advanced, needs to have more expensive and inclusive view of what it is and who are included as social entrepreneurs[11]. some of the academician, were of the opinion that social entrepreneurship appears overly focused on a elite core of remarkable individuals who belong to exclusive club or group.
2. Finding common ground inspite of different visions: Social entrepreneurship is a global

phenomenon, to a certain extent the difference in vision reflects regional, national and cultural attitudes[12]. In some countries social entrepreneurship as emerged out of social economy; in some other countries it as a strong links with the public sector while in developing world social entrepreneurship is referred to as business of all sorts with social purpose. In this background it becomes necessary to find a common ground for social entrepreneurship in spite of the differences in visions.

3. Balancing between expectations and reality: The active promotion of social

entrepreneurship is the need of the hour. The government, the organizations and the people involved in creating and delivering a social value needs to be promoted. Because the work of social entrepreneurship appears to be difficult which takes considerable time to achieve systematic change over a period of time. There is always a gap between expectations and actual results. The data is hardly available to measure the success, scalability and sustainability. Therefore it is necessary to develop criteria which will be accepted as common standard to measure the success or failure of mission programs.
4. Controversy of Old v/s New: The social entrepreneurship embodies a fundamental tension

between old and new[13]. Some, view the social entrepreneurship as a new and different approach to social problems while some others were highly critical of the approach. They are of the opinion that social entrepreneurship is a new label attach to some thing which was already existed[14]. However social entrepreneurship addresses several social problems which adds to the quality of life. The purpose of business entrepreneurship is supportive by creating an opportunity and delivering goods and services to the society. Therefore both social entrepreneurship and business entrepreneurship should be seen as complimentary and not as a contradictory.
5. Meeting the needs of practitioners and academician: social entrepreneurship is an

applied discipline rather than arcane theory. But as scholars we need to move behind a consultancy approach for credibility and need to focus on drawing theory out of practice, developing some new theory and then applying back to practice. This emphasizes the need for rigorous academic works by academicians to claim the legitimacy of the social entrepreneurship. Academicians have always access to existing knowledge and are in a
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position to develop new knowledge that should be useful to practitioners. Both academicians and practitioners must work collectively in order to make this social entrepreneurship more purposeful one.

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Conclusion
Social Entrepreneurship is a vital and emerging concept. Social Entrepreneurs are expected to play a major role in social value creation and sustainability. Entrepreneurs in general and social Entrepreneurs in particular are required to assume greater responsibility particularly in third world countries where the delivery of socio-economic justice is utmost important. Business Entrepreneurs together with social Entrepreneurs must work hard to realize the socio-economic objectives of the country. Collective efforts of both business Entrepreneurs and social Entrepreneurs will definitely, contribute for the sustained development of the economy on equitable lines in the years to come.

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References
1. The phrase was used as a description of Robert Owen in J Banks, The Sociology of

Social Movements, London, MacMillan, 1972.

2. The Meaning of .Social Entrepreneurship.- J. Gregory Dees Original Draft: October 31,

1998, Reformatted and revised: May 30, 2001

3. The Business4Good Blog Think Good, Speak Good, Do Good.- Juergen Nagler, 15

April 2007
4. The Emergence of Social Enterprise- sugden and Wilson, 2005 5. The Importance of Social Entrepreneurship LIFE Community - George 18 Feb2011

6. "The Third Sector and Sustainable Social Change: New Frontiers for Research"Barcelona (Spain) - July 9-12, 2008: Giulia Galera
7. Developing the Field of Social Entrepreneurship- A Report from the Center for

Advancement of Social Entrepreneurship (CASE)- Duke University The Fuqua School of Business- June 2008. 8. ibid 9. ibid 10. ibid 11. ibid 12. ibid 13. ibid
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14. ibid

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