The Paradox of our Times and a Key Role for Social Enterprise

Business for the common good has never been as needed, debated and desired as now. A spotlight on Social Enterprise.

Business for the common good has never been as needed, debated and desired as now. A spotlight on Social Enterprise – challenges and opportunities in a new world context with Profs. Concepción Galdón, Sheila M. Cannon, Edgard Barki, Adrian Zicari and successful social entrepreneur, Paula Cardenau

We live in paradoxical times. On the one hand, it is proven that economic growth has taken millions of people out of poverty and enabled more people than ever to access educational opportunities. But on the other hand, inequality has continuously increased. From a capitalism that more or less ensured the spread of wealth among the various levels of the population, pressure on economic growth and emphasis on shareholder return has led in the past thirty years or so to concentrating income on only a few. And the gap between the rich and the poor is widening. Worse indeed, in many countries large parts of the population see a dim future, darkened further by scientists’ reminder that the planet’s limits are already transgressed, and that corrective action is urgently needed. Indeed, speeded up by the impact of the COVID pandemic, the calling for evolution towards a “Capitalism 3.0” has become a global debate on how we can build an economic system that marks a return of respect for others and nature. In this context, Social Entrepreneurship is an endeavor that has a key role. It brings both promise and hope, which brings remedy – and which contributes to this desired future.

Enter social enterprise

Social Enterprise attempts to achieve both economic and social/sustainability objectives. As such, it differs from Corporate Philanthropy where business leaders and firms generate wealth to then donate to a social cause and objective. It also differs from Corporate Social Responsibility, where a for-profit organisation brings into consideration the expectations of different stakeholders while keeping its legitimate profit objective.

Social enterprises are therefore led by a demanding, ambitious double motive of economic, social and/or sustainability objectives. This being said, social ventures are different in that they empower people with business models and whose primary role is not that of making money, but first that of doing good.

Social entrepreneurs

Business for the common good has never been as needed, debated and desired as now. A spotlight on Social Enterprise.

As we see today in many business schools and universities, an increasing number of students are eager to launch their new ventures, either as a fully-fledged social enterprise or at least with some inspiration from it. More challenging indeed is to consider those social enterprises that are created “at the base” – that is, in low-income environments. In these cases, people with humble means struggle to embark upon social enterprise that seeks both to create a profitable firm and bring some social value to the environment and their community. In very disadvantaged areas, budding entrepreneurs might not even have heard of social enterprise, and those that have are very much more concerned by the basic objective of survival than caring for others. But social ventures do indeed exist at the base of the pyramid – and these social entrepreneurs are particularly courageous, as they put all they have in their ventures without affording the “learning luxury” of failure. But here, business schools such as FGV-EAESP in Brazil, are finding an opportunity to contribute by bringing expertise in business and management skills, knowledge and support to social entrepreneurs who lack sufficient economic, human and social capital.

Tech can be for good

Social enterprise and tech for good

Meantime, the amazing progress in digital tools, and more broadly, digitization and Big Data, brings a world of opportunity for social enterprise. Not only as a way of connecting people more easily, instantaneously and at a lower cost, but also as an opportunity to access vast quantities of information that can bring value to society. In the case of Ireland, social entrepreneurs are increasingly finding new opportunities to put digital tools to use. But there’s a hitch with tech, as too often too much hope is placed on technology to produce miracles alone. As the Gartner Hype Cycle model shows, social entrepreneurs’ initial enthusiasm is frequently exaggerated. There is a need to wisely explore the real possibilities of digital tools for they alone cannot address complex social and environmental challenges. Collaboration with others already working on these pressing issues is the best way to make real progress.

As a successful example of the integration of digital tools in a social enterprise, the company Arbusta deserves a mention. Founded in Rosario, Argentina, it supports companies and organisations through their digital transformation processes – with special focus in the quality assurance of their digital interactions, their data and their software. To provide these services, Arbusta hires young centennials – mostly women, aged 18 to 25 – living in underprivileged environments, who are neither working, nor studying. Thus, Arbusta is not only providing a first job experience to youth whose chances to get formal employment are very scarce – due to the strong prejudices associated with their socioeconomic context – but also providing them with a career path in the IT industry, whose rapid expansion is constantly demanding for new talent. Currently, 300 youths are being employed by Arbusta in Colombia, Argentina and Uruguay, and 180 have been employed in the past and now have moved on in their careers. 

To scale up, or not to scale up?

Business for the common good has never been as needed, debated and desired as now. A spotlight on Social Enterprise – challenges and opportunities in a new world context with Profs. Concepción Galdón, Sheila M. Cannon, Edgard Barki, Adrian Zicari and a successful social entrepreneur, Paula Cardenau

All in all, social enterprise can become a much needed social elevator, and a breath of hope for people left on the roadside in the current way of things. But social enterprise does have its particular challenges. Among them the question of scale. It is rare to find a social enterprise that has managed to significantly scale up its operations – indeed this has always a challenge. Social enterprises might have found the solution to issues and needs, but unlike the Ubers of this world seem unable to step up and go for big. This being said, it can be argued that there’s usually a trade-off between scale and depth of impact. Indeed, it is difficult to have the two. But isn’t social enterprise a means to think business in a different way? Is scale essential if the overriding motive of social enterprise – impact – is obtained?

For social enterprise to succeed, a certain courage is required. You need to be bold and willing to change the rules of the game. What’s more, it is a challenge that brings into calling all the talents that a social entrepreneur might have – or might develop along the way. And for those who have had contact with social entrepreneurs, one thing is sure – they have never regretted going there.

Go further and watch the full online masterclass

Prof. Concepción Galdón, is the Director of the IE Center for Social Innovation at IE University, Spain. Prof. Sheila M. Cannon, is Director of the Social Enterprise Company Project at Trinity College Business School, Trinity College Dublin. Prof. Edgard Barki is Head of the FGV-EAESP Entrepreneurship Center, Brazil. Paula Cardenau is Co-founder and Director of the social enterprises Arbusta and Njamba. Adrian Zicari is Prof. of Management Control and Social and Environmental Reporting at ESSEC Business School, and Executive Director of the Council on Business & Society.

Concepción Galdón, Sheila M. Cannon, Edgard Barki, Paula Cardenau, Adrian Zicari
Concepción Galdón, Sheila M. Cannon, Edgard Barki, Paula Cardenau, Adrian Zicari

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A Council on Business & Society book - Social Enterprise: A focus on entrepreneurship for the common good

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