This essay extends, develops and shares a discussion with my colleagues involved in the promotion of social entrepreneurship. I have been saying for a long time that I'm not comfortable with the appropriation of the label 'social' by a movement whose achievements and extensive media coverage ended up installing the idea that there would be good Samaritans , social entrepreneurs, and bad capitalists, for-profit entrepreneurs .
Because ideas guide not only speech but also the behavior and decisions of public and private actors, it is necessary to do some ideological work to put the record straight and provide a more accurate framing of the reality of entrepreneurship in the 21st century.
The appropriation of the 'social' label by proponents of a portion of the entrepreneurial phenomenon suggest, at a subconscious level, that for-profit entrepreneurship would be asocial, at a minimum, even anti-social. I hope to convince the reader that for-profit entrepreneurship can be neither one nor the other.
Entrepreneurship is not asocial and cannot be anti-social
For-profit entrepreneurship cannot be asocial as one might be agnostic or apolitical. Entrepreneurs do not act in a social vacuum. They live and work in a social context. An entrepreneur’s actions are influenced by the surrounding social environment and impact it in return. Do not we often say that the great business builders found themselves at the right time and the right place? Without in any way diminishing the value of individuals, ‘great’ entrepreneurs, like ‘great’ politicians or generals, found themselves in tune with their environment in particular circumstances. Reserving the label 'social' to a part of the entrepreneurial phenomenon does not make sense. All entrepreneurship is social because it is a 'social fact' in the Durkheimian sense.
For-profit entrepreneurship cannot be anti-social either. I would not have advanced this assertion forcefully if I wrote in the 19th or in the first half of the 20th century. I would not be able to do so if I wrote from a country dominated by the primitive form of capitalism.
In advanced countries where the development of democracy, civil society, media and the public, entrepreneurs are subject to legal and social controls. They cannot afford to play against society. The legitimacy of the pursuit of profit is now subject to respect for people and nature. In other words, if the right to pursue profit is not challenged, how the entrepreneur realizes the profit is subject to increasingly normative social control, to the point that some entrepreneurs find it, sometimes not without reason, too excessive.
Even though this is disputed by some historians, I agree with the thesis of the inevitable development of education, democracy and civil society. Thus, I think that entrepreneurs operating in countries where this evolution is not yet completed will be accountable for negative social and environmental externalities, and will not be able to continue to treat people and nature badly.
Social entrepreneurship is not always what it seems
Having argued that entrepreneurship cannot be asocial or anti-social, I would like to attempt a deconstruction of social entrepreneurship. The distinguishing feature claimed by proponents of this form is to place the social purpose at the center of a company. When a project has a commercial dimension, the economic logic is presumably submitted to the social mission. Social entrepreneurs are human beings, however, and the organizations the set up to serve the mission, if not tightly managed, can end up playing against it. For example, the aggressive distribution of micro credit by complacent field officers has aggravated the hardship of the poor. In 2010 alone, the government of Andhra Pradesh, the Indian state home to one third of micro credit borrowers in India, counted 80 suicides among over indebted borrowers (for more details http://www.bbc.com/news/world-south-asia-11997571). India also witnessed the public listing of micro credit companies on the cynical ground that the stock exchange would provide easier access to more funds to lift more families out of poverty. In Bangladesh, where Mohammad Yunus pioneered it, and in Morocco, micro credit has also been controversial.
Because the dark side of micro credit is an easy illustration, we have to find other illustrations of drift in social entrepreneurship. I was exposed recently to a young entrepreneur who claimed openly that his venture is for-profit business although it is based on a social alibi (the word alibi is mine).
Social entrepreneurship is less so when it is transformed into a profession or a business. Where the income or social identity of a person, or of a group, is based on a social enterprise, sustainability of this business usually becomes its own end. The sociology of organizations has extensively documented the institutionalization process that transforms a means, an organization se up to treat a social problem, into their own ends. When income, power, salvation, the meaning of life or the identity of a social entrepreneur are sought through service to the poor, the sick and the oppressed, the existence of these populations is necessary to ensure continuity of the organizations supposed to help them.
Great achievements in social entrepreneurship result in the establishment of organizations, sometimes very large. Therefore, these organizations are necessarily traversed by conventional phenomena also documented by the sociology of organizations: power struggles, conflicts over resource allocation, loss of sight of the primary mission of the organization, emergence of silos, submission of volunteers to technocrats, etc.
Beyond the dichotomy: responsible entrepreneurship
Since for-profit entrepreneurship is necessarily social and social entrepreneurship is not always so social, we should look for a label other than ‘social’ to help us sort the good from the ugly. From my point of view, a more valid distinction must be made between responsible and irresponsible forms of entrepreneurship. Because it is easier to define negatively, irresponsible entrepreneurship is one that puts, de facto, the selfish interests of the entrepreneur at the heart of a project and seeks to achieve goals, be it the salvation of the soul, by generating negative externalities for people or the planet.
By contrast, responsible entrepreneurship, for-profit or not, begins by recognizing to the entrepreneur the right to pursue own objectives and compels him to do so in respect of people and the environment. The ideal responsible ideal entrepreneur does no harm and does not produce negative externalities. The real entrepreneur can produce negative externalities but must be held accountable for them: they clean when they pollute, they develop employability when they do not want to promise lifetime employment, they offset the drudgery of work when they cannot avoid it, etc.
Emphasizing responsibility has another advantage. It contributes to the development of the paradigm of responsibility in the business world. We talk about responsible leadership, responsible governance, responsible employment, and responsible investment. These concepts relate to the conduct of existing organizations whose creation requires responsible entrepreneurs. I hope we have come full circle.