The Future of Social Enterprise…

Screen Shot 2013-12-05 at 8.12.32 AM

It would be hard to argue that Social Enterprises are not, in at least some circles today, an important and emerging are of business.  When institutions like Harvard and Stanford have significant investment in social enterprise and social innovation, its seems misguided to say that these are merely “fringe ideas” to the “real world of business.”  That few people have a sense of these concepts is less about validity and more about connection to innovation (or lack there of).  That said, what do you think the future of social enterprises are in America?  Will this be a “bubble,” a trend that gains momentum only to fizzle out… or is it something else?  Will it be a new form of capitalism, a parallel path that has, as its end game, a better world?

 

p.s.   some food for thought:

Impact Investing

The Information Daily

Startupsmart

The Independent

 

About these ads

Tags: , ,

27 responses to “The Future of Social Enterprise…”

  1. Geary Johnson says :

    Entrepreneurship has been the main force for great development and change in the business world. While the current norm for entrepreneurship is to build companies, make profit and capitalize on the free market economy, there I a change in the air with pressure form the population to be more socially minded.
    In a recent article published by Forbes Magazine, there are five favorable predictions for the social enterprise movement:

    1. First being that social enterprise will dissolve as a distinct discipline as it will be woven into the very fabric of existing disciplines.
    2. Secondly the assumptions of high profit margins will be recalibrated to the realities of mission-based enterprise
    3. Third, the greatest social change will be unleashed by moving the corporate needle impacting behaviors through revolutionary movements.
    4. Forth, the social impact assessment will become more sophisticated and fully integrated into organizational analysis
    5. Lastly, the impermanent and constant recon figuration define the career arc of aspiring social entrepreneurs
    This can be found at the following link below: http://www.forbes.com/sites/ashoka/2012/11/19/five-predictions-for-the-future-of-social-entrepreneurship/

    I am of mind that social enterprise will be a norm and a new way of doing business as the older profit driven models of business will still be in existence, but will be a lesser form of business. As resources become scarcer and the population growth from the world bubbles over on itself, there will be some tough decisions and changes that will need to be made. From the industrial revolution to engaged social business will be the newest form of knowledge economy

    • Andy Haussler says :

      Geary-
      I think it will be a very long time before social enterprise is a norm. While I agree it will get there, it will take some time. I would advocate that we create a stage for social enterprise to get a chance, to launch. With proper support by our laws these get get a real chance to flourish. One of the ways could be to allow these entities to access tax credit programs where businesses in need of tax write-offs could “buy” them by investing in a qualified social enterprise. This could be done for a limited time period, but long enough to give social enterprise a chance to get going.

  2. Andy Haussler says :

    I believe something has to change in how we address the ills of our globe. The systems we have in place to serve the poor are very inefficient and don’t meet the need. In my direct experience government is not able, and frankly shouldn’t meet all of the needs. It is political, full of red tape, not flexible/nimble enough, not resourced adequately, and frankly a joke. I long pushed churches to become more engaged in issues in my community as I expressed to them their unique abilities that I did not have as a city staffer. Many became engaged but I realized they have limited resources as well.

    So I am hopeful in the social enterprise concept. This maybe the solution we need. In looking at examples where social enterprise is gaining traction I was surprised to find evidence of it in China. (http://www.theguardian.com/social-enterprise-network/2013/dec/06/china-landscape-fertile-social-enterprise)

    This encourages me because it shows how a society solely dependent on the government is turning to social enterprise to address needs in their country.

    So to me the question is not so much if social enterprise is legitimate. The question is, how can we create a fertile environment for these entities? What can we do to give them a chance? I don’t see other ideas coming up to provide a solution, lets give them a shot.

  3. caleb says :

    I think the question isn’t if social enterprise is here to stay, but is traditional business going to be non-existent in the next decade? Consumer sentiment today seems to be going in two extremes: 1) toward valuable, purposeful niche brands and 2) toward the low-price, private label (away from brands).

    As the smaller, niche social businesses create groundswells of support—and sales—the big, multi-national brands will take notice. They will modify their typical, often trivial corporate social responsibility campaigns for TOMS®-style models. I think more will be given away (in aid) in the next decade than the past century combined. Fortunately, consumers are becoming more empowered and smart; they can see right through disingenuous campaigns and efforts, and it’s unlikely that the Fortune 500 companies can pretend to be social businesses in the long-term.

    I predict in the next 10 to 15 years, many huge brands will simply become commodities or private labeled, and the only true, remaining brands will be grassroots social enterprises. There is a huge shift in consumer behavior driving this. Most people now can buy excellent private label products (e.g. Kirkland) cheaper than name brands. They’re buying soap, detergent, chicken, sweaters, and a garden hose…all under the same name. This has been going on in Europe for a long time. But those same people who buy private label goods are also starting to make purchases for niche products and niche brands that carry greater purpose (and value).

    To me, every big brand in the country needs to be very afraid of the looming private label and commoditization. Social enterprises and small niche brands have the most leverage right now.

    • Tracy Neufeld says :

      I agree with your thought process from an educated, middle class point of view. But what about the poverty in America? The votes cast with poor dollars will be done with purchases made of cheap crap in food deserts. If we can make sure the social enterprises work in all socio-economic environments, America can move forward together. At this point, capitalism only works according to the market. The affluent are increasingly becoming segregated (http://www.fastcodesign.com/3022245/infographic-of-the-day/infographic-the-wealthiest-zip-codes-in-america). Companies chase customers, so unless a strategic goal is to make grassroots social enterprises accessible to the poor, leveraging that capability over traditional businesses will be difficult.

      (I’m not trying to sound socialist, but provide a voice for those with less resources.)

      • BriceY says :

        It’s ok Tracy…sound socialist…

      • caleb says :

        Tracy – Why are you such a socialist/Marxist? Just kidding. I like your point, but I think you may be underestimating the purchase power of those in American-style poverty.

        Nevertheless, I think your argument supports mine. I think consumers (regardless of income) will either buy goods from purposeful brands (social enterprises) or buy cheaper, private label goods.

        (To Traci and Prof Yocum: Regarding the article about wealth distribution, should the goal be to make the rich poorer, or the poor richer?)

  4. Gabriela Flores says :

    What do you think the future of social enterprises are in America?

    I believe that future social enterprises in America are going to come to education. The reason I say education is because of its exaggerated rising cost. Many can’t even fathom the thought of such large debt for an education. Many low-income people I know who did not qualify for financial aid didn’t attend school because of the high costs. Take for example New Charter University a total online university.

    New Charter University:
    San Francisco, 50 employees, $400,000 in 2011 revenue

    Instead of providing school loans, Internet-based New Charter University makes college affordable: Through dual enrollment with Patten University, a regionally accredited associate degree is $3,700, vs. $15,000 to $37,000 at other online colleges. The college keeps costs down with self-paced learning and social media marketing in lieu of billboards and TV ads, targeting working adults without degrees. “I grew up in a housing development in the inner city and I saw how not having an education impacts lives. People shouldn’t have to mortgage their futures to get a degree,” says CEO and co-founder Gene Wade. —KK

    http://images.businessweek.com/slideshows/2012-06-21/americas-most-promising-social-entrepreneurs-2012#slide26

    http://new.edu/info/

    Will this be a “bubble,” a trend that gains momentum only to fizzle out… or is it something else?

    No, social business will not fizzle out. I simply think it’s the direction the world in headed. Traditional non profits are inefficient and a small percentage of what is donated actually goes to helping those in need. In addition I believe that it is a great way for people to grow independent of poverty, government and build their own success.

    Will it be a new form of capitalism, a parallel path that has, as its end game, a better world?

    I believe that it will be a parallel path. For profit organizations will always exist it’s the way of the world, but there are many who also want to help those less fortunate. I believe that many for profit companies will as a socially responsible MNE have social businesses to show they are “good” or like Microsoft (Bill Gates) create something for the betterment of man kind.

  5. Jez Balsa says :

    Social enterprise is just a marketing catch phrase similar to “Retina Display” and “Beats Technology.” Now I don’t question the intentions of upcoming and current social enterprises, I’m just questioning their sustainability. I refer to it as a marketing phrase because it masks and/or dresses up the reality. Retina Displays just means more pixels while beats just means louder treble and bass. Social enterprise just means business that gives things away. Traditional businesses already do this under their CSR umbrella. Here’s a list of companies and the amounts given away:

    Link – http://philanthropy.com/article/10-Companies-That-Gave-the/140261/

    Wells Fargo & Company ($315,845,766)

    Walmart Stores ($10,667,475,661 in cash and products)

    Chevron Corp ($262,430,000)

    Goldman Sachs Group ($241,278,912)

    Exxon Mobil ($213,374,183)

    Bank of America ($221,862,368)

    JP Morgan Chase ($183,471,434)

    GE ($161,500,000)

    Target ($912,582,722)

    Citi Group ($137,032,650)

    These businesses didn’t set out to make a dent on the world’s social issues. They simply set out to make money. And as a byproduct of successfully making money, The surplus is being used responsibly. Now I know corporations get tax breaks this way, but should we really care why they do it as oppose to just being happy that they do it. Also, the key here, is that the donations are excesses on top of profitability goals. This is true sustainability because it allows a company to continue to grow. And as a company grows, so do their contributions.

    • BriceY says :

      Jez,
      Let me see if I can summarize what you’re trying to say:
      Social Enterprises are to CSR like Halos are to Cuties… Would that be accurate under your analysis?

  6. Omar Ruiz says :

    My thoughts are that social entrepreneurship will continue to grow in popularity, and over time will be seen as more effective than traditional non-profit organizations. It has been said that there is no dignity in charity, with that in mind I believe that the mentality associated with that saying encourages feelings of helplessness for recipients, and even hopelessness for the givers. I believe that the “feelings” byproduct associated with the exchange of goods and serviced offered by a social business can contribute toward improved attitudes regarding upward mobility for recipients and increased engagement for non-profit workers. According to recent study conducted by Duke University professor David Russell, social enterprises are the future. Other studies point to non-profit worker burnout from working long hours, low pay, and a never ending list of tasks. This information all points to organizations that will eventually suffer turnover, less innovation, and less able to produce. I think that through effective management and driving the culture of a social business the impact on social issues would be much more than through a non-profit approach.

  7. Tracy Neufeld says :

    I think that social enterprises will grow over time in America. I don’t think they will become the norm, but they will be common enough to provide competition in most product markets and commodities. People will have a choice in almost everything they buy or consume; traditional product or value added?

    At that point, most companies will need to have a social cause with their brand to remain competitive. The point won’t be the social cause, but the association with doing good. So is that really a strategic goal of the company? The latest fad is letting customers choose where a philanthropic bag should plop. “Doesn’t corporate philanthropic crowdsourcing amount to window-dressing, a nice publicity stunt that doesn’t yield many results for the recipients?” (http://www.metro.us/boston/news/national/2013/10/21/hm-lets-customers-vote-on-do-gooding/)

    Aside from the H&M poll for a good cause, any social enterprise increase will raise the bar for Americans. It’s interesting the links on this post above are from international websites. Maybe America has a long ways to go?

    • Sheng Her says :

      Tracy, I agree with you. I believe that social enterprises will grow over time in America, but it will not be the norm. However, it will grow to provide competition in most product markets and commodities, therefore changing for the better the ways business have always been operating. We can clearly see that now as our multinational corporations are enforcing their CSR in their business operations. It’s interesting to see how this will play out.

  8. Indira says :

    I believe Social Enterprise has a bright future for itself. I personally had never heard about it all throughout my college career until I got to this MBA program. I really wish I would have known about it sooner in TUG, maybe I would have had my own Social Business now while at the same time helping others. I cannot be more excited than to pass this on to others and get them excited to help others as well. I think that more TUG Business Schools should teach about it and soon enough, even have a Social Enterprise Conference in their area just like Harvard, Columbia, Stanford, etc.

    I was able to find a website which provides great insight and lists 10 things that might happen in the future for Social Entrepreneurship. This is article is based on a Skoll World Forum and its 10 year anniversary. I highly encourage everyone to read this in its entirety; it was too long to copy and paste on here.

    “A 10 year anniversary is a great moment to look back, take stock, and then imagine the future. The field of social entrepreneurship has blossomed since the Forum launched and the ideas which a decade ago seemed so radical are now the norm in campuses and boardrooms across the world. If this Forum is anything to go by, the next 10 years are going to be even more disruptive and exciting than the last.”
    (http://www.fastcoexist.com/1681921/10-ideas-driving-the-future-of-social-entrepreneurship)

    • Daniela Rodriguez says :

      I also come to really admire social business because it has a beneficial outcome in the community and nation. I think that the exposure to actual and active organizations would be an even more beneficial experience. I would liked to have a hands on experience. That’s one recommendation I would highly suggest for the MBA program proceeding our class. It was interesting and insightful how these organizations are established and maintained.

  9. Jesse Carlos says :

    Social business is an intriguing concept that I have come to admire. Many people believe that history repeats itself which is true to certain extents. I feel that capitalism will be enhanced to create a new form of business and political structure. Social business allows profitable businesses to provide social benefits. Although it is gaining momentum, the social business structure will not replace the current capitalistic structure. However, the new generation of business professionals will introduce innovative ideas that will revolutionize business standards in developed economies.

    With so many companies trying to add a social benefit to their brand or product, it seems like social enterprise is bubble which will eventually pop. With time and leadership, social businesses will contribute to an innovative form of capitalism. To support my stance, I would like to use the Chinese business model. Its communist structure and government has developed a business system that resembles capitalism in various ways. The country may not admit to implementing capitalistic processes but it is evident in its developing economy. Similarly, social business will have a tremendous impact on current business structures including capitalism. The advancement and access of technology will allow for a greater globalized business environment which will influenced by social business structures.

    • Daniela Rodriguez says :

      I agree with you Jesse! You brought up a really good point. I also believe that it can easily be underestimated. I think that social business will not replace the capitalistic structure. However, it is a beneficial structure that allows prosperity.

  10. Sheng Her says :

    Social Enterprises are in fact an important and emerging area of business. It’s definitely growing in recent years. Consumers are showing more preference for socially responsible products and services. They are expressing strong interest in using commerce to make the world a better place. Researches have indicated that there is consumers’ increased preferences for cause marketing, purchasing products that are tie to a charity. Cone communications surveyed that 41% of Americans purchases a product in the past year because of its association with a social cause. (http://www.seechangemagazine.com/articles/ear-to-the-ground/613-will-consumers-purchase-from-social-enterprises-new-survey-shows-promise)

    I think that with the growth of social media, and the fast availability to news and information across the world, people become are becoming more knowledgeable. The sharing of ideas and concepts amongst people through the internet really plays a part in the success of social enterprises. That is why I believe that social enterprises will be around for a very long time. It seems our cultures nowadays are becoming more supportive of the idea of a business guided by a social mission, and then reinvesting its profits to help make an impact in the lives of others.

    Like all businesses, sustainability is a challenge. Heath Shackleford’s article Creating The Committed Consumer, Social Enterprise’s Next Big Mission, mentioned about getting the committed consumer. Shackleford talks about how our economy is built on consumption, not conservation. If social enterprises aren’t careful, Warby Parker shades and Toms shoes will be a thing of the past. Shackleford is right, consumers are starting to have consciences by supporting social enterprises, and the next step is to make them committed. That’s really the way for social enterprise to stay around for a long time. (http://www.fastcoexist.com/3022143/creating-the-committed-consumer-social-enterprises-next-big-mission)

  11. Kristen says :

    I think social business is a fad—a trend that will last for a while and slowly fizzle out because the revenue is just not there. We have talked relentlessly about how businesses are about making a profit and once more people jump on the social enterprise band wagon, the profits companies see will slowly start to dwindle. People love helping others only if they get something out of it. Once they stop getting that ‘something’ (whatever it may be) they stop helping. For example, I really enjoy volunteering and doing nice things for other people. I do it because it makes me feel good. Yes it might help others, but in reality it is a selfish act because I feel better by doing so. It is the same thing with Social Business.

    And since this is our last post of our MBA program, I will be quite honest. I think the time we have spent talking about social business and being exposed to it has not been as beneficial as some might have hoped. I think the goal was to get us excited about it the concept and push us to really explore this area of business. Personally, while I do see some ‘benefits’ of social business, I will never voluntarily have any part of it. I think there are things more worth my time and efforts and if I was truly interested in helping others I would not do so by creating a social business.

    I think the ultimate goal of social business is to create a better world, but I do not think it is sustainable. It is very possible that in ten years social business will still be relevant and successful, but I personally do not believe that is the case.

  12. Kelly Kirschner says :

    I was able to find several articles on the web including a really cool TED video featuring Rachel Chan entitled “Is ‘social enterprise’ a passing fad?” http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&cad=rja&ved=0CEEQtwIwAg&url=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DJu5k7FGRZ98&ei=zrenUrDQD4H9oASan4HgBg&usg=AFQjCNEu-bIKO474LcGa0H6TFfdtZLprZg&bvm=bv.57799294,d.cGU

    That aside and to answer the question, I wonder if it is just a trend. Is the idea of improving the lives of all stakeholders in a business something that has emerged because of the socio-political or economic climate in recent years? Would adherents to social business culminate in number during a period of economic growth, such as the early 2000s?

    I think answer lies in truly understanding the validity and sustainability of social enterprise. Like any other concept, it has to stand on its own merit. And because it is business, social enterprise will need to perform against goals so that stakeholders attain their profit. I use the terms ‘goals’ and ‘profit’ loosely— not necessarily only meaning monetary revenue.

    Due to the confluence of “social” being part of social enterprise, it will take time for people to get their head around it and to accept the idea. This, I think, will be the biggest challenge, especially for those who have established roots in traditional business fields. For those who approach business from a social- or philosophical- oriented discipline, it will be much easier and the concept may be longer-lived.

  13. Eddie Mendez says :

    I do not feel there will be a bubble. Doing good and make money will always be a popular idea. I personally love making money and I would prefer to do the right thing. I would rather do the right thing then make money. I want to be a positive remodel for my daughter. I think it will start off as a better world then it will be change by greedy people. Some people will ruin and others will do it the right way.

  14. LDermon says :

    I think that younger generation; such as generation Y and generation Millennia are very different than older generations. They need to know why they do what they do, it has to have a purpose. Those generations also mix their personal life with their business life (Facebook, constant connection via smartphones), so social matters are mixed with business matters.
    I think Social Enterprises are not a trend, they are just an expression of a changing population, that cares about the purpose. In my opinion, it will become a well-known alternative to traditional business model, and with time, the traditional business model could become obsolete.

  15. Daniela Rodriguez says :

    I believe that Social Enterprises have a lot of potential and can possibly create a positive movement towards improving the global economy. In current times I don’t believe that they’re effective as they should be. There’s just too much unfortunate circumstances accross the world that will require more and more
    attention.

    Unfortunately, most social enterprises have a bad reputation for being dishonest creating a negative image for those social enterprises who are sincerely trying to help those with social economic needs. However, the opportunity is definitely there. Overall I believe one day Social Enterprises will become one strong movement in the world.

  16. JJ Rea says :

    Social enterprise will continue to gain momentum to the point where it must be at least a portion of every business. The public will end up demanding this of corporations as our government continually wastes money, to no avail, in trying to create better living conditions for all. The problem I feel is that it will become so expected of corporations that they will do it because they have to and not because they want to. When the good turns into a “have to” it loses its impact and people will begin finding ways to manipulate the general public through their acts of goodwill. Yes, it will become an adapted form of capitalism. I think that the underlying reason companies will adopt this is because it will be the only way to compete with their competitors. Profit motivated companies will keep us in the same scenario that we live in today. The problems of society will continue to grow and so will the number of people willing to dedicate their time to fix issues in the world, however it will most likely be proportionate to our current level of world acceptance for doing good in the world. The good part is that it only takes ones person to enact monumental change. Hopefully, that person is motivated based on the social enterprise movement to actually do something about it.

  17. Juan says :

    Social Business, as I have expressed in class the concept is something is something for me to understanding completely. I am unsure how someone can spend so much time and effort to help others, they must not have any problems or issues in their own lives or within their immediate family for them to want to help complete strangers. There is no way I can start thinking about helping the family down the street when my family is the family is the family down the street needing the help. With that said I don’t think that social business will survive, due to lack of profit and lack of exclusivity.

    Business’s needs to make money to be sustainable regardless of how many people they are helping. I doubt social business will continually bring profit for a long run in the business world. Second social business is done for selfish reasons. People that truly want to help others, just do it with out the publicity. In social business people want to help others but they want the whole world to know what a good person they are because of the work they are doing. If everyone is joining the social business industry, the prestige of “being a good person” in business will lose its value causing social business to be another American bubble.

  18. anevarez007 says :

    I believe over time Social Business will start to emerge and become more effective. It is a trend that is starting to slowly become noticed across the nation but I don’t feel it has the recognition that it deserves. Social Business are different and creative ways of doing business without the focus being on money. I feel that there are more social business opportunities that are focused on Global issues. After attending the Social Enterprise conference in New York it really opened by eyes to this subject. There are hundreds even thousands I’m sure that are geared toward Social Business. I believe that it will one day come out of its bubble and be more publicized and noticed with the correct marketing and branding. Social Business is not a charity, it can either be for profit or not profit. It is the goal and story behind the purpose of the organization.

  19. Nathan McGuigan says :

    Currently I do believe social business is sort of a bubble that does have a lot of momentum right now. With that being said however I do believe that there is going to be a point in our history in which it will be a focal point for businesses. A point so great that it may indeed compete with so called “real world business” or even take over. I believe that we will have to come to a time on this planet where resources become scarce. No matter how you look at it developed countries tend to assist under developed or developing countries. (impossible to be the other way around really) Social business needs to become a global action and that cannot happen until developed countries feel a squeeze on resources as well. I feel that social business will currently fizzle until one day there come a time where it is the only form of business that we think about. The shift is going to come sort of like cleaning your desk out at work. Things have to get really messy for before you can put them all back in the order you want and get it cleaned up. If this shift does not take place then were right back to hand outs and charity no matter how the money is raised. In order for Yonus’ 2030 agenda to become a reality everyone on this planet must participate.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 233 other followers

%d bloggers like this: