By Karin Larsson, SE Forum
That I was going to get a chance to see and listen to Muhammad Yunus for real during my study semester abroad was definitely nothing I’ve expected when I about two years ago was sent to Monterrey, Mexico’s absolute business centre, to study economics. But then one day he was actually invited, with much pomp and ceremony, to a university known for its success in entrepreneurship and leadership development. During about two hours a lecture hall full of university students was acquainted with what this man, founder of the Grameen Bank and recipient of the Nobel Peace Prize in 2006, had achieved within the field of social entrepreneurship.
It was after this meeting with one of my biggest role models that I seriously started to think about the concept of social entrepreneurship and what its actual meaning is. As an economics student you rarely get a chance to learn more about this type of entrepreneurship for the simple reason that its results are not measured in usual manner, namely in the form of financial return. A social entrepreneurship is an entrepreneurship that seeks social change why it doesn’t necessarily has a direct connection to the economic sphere. Instead, it may be about improving the living conditions for the poor, empowering women in conflict-areas or increasing the environmental awareness among young people.
However, the fact that social entrepreneurship is principally social and not economic does not mean that this excludes principles, objectives, and in some cases even profit generation. When all is said and done, we are dealing with entrepreneurship, no matter if its effects are social, economic or something else. I have personal experience from both the social and economic sector and I have seen that in cases where there has been a strive for social development, this strive has pratically always been directly or indirectly related to the economic sphere.
As an economics student, I’ve chosen to investigate the link between the social entrepreneurship and economics, more thoroughly and my personal drive to reconcile the economic entrepreneurship with the social entrepreneurship made me take a seven months study break from my international economics study programme. Thus, since four months ago I live in Baku, capital of Azerbaijan, where I’m carrying out an internship at a NGO that primarily works with vulnerable women, youth and internally displaced people (IDP’s). Social entrepreneurship is often associated with just the voluntary sector where voluntary efforts around a common goal or objective in the long run are supposed to lead to a social change, smaller or bigger depending on the impact of the entrepreneurship.
Now then, what is it that determines the impact of a social entrepreneurship? Taking my own experience into consideration I would say that it is the uniting of the voluntary efforts with those elements, preferably from the economic entrepreneurship, that gives the maximum multiplier effect on the social sphere. Those who are harsh and choose to ignore the fact that there are entrepreneurs that contribute equally to the economic and the social spheres, gladly state that it is the economic entrepreneurs that create the money while the social entrepreneurs are the ones that improve the welfare. Although there might be some truth to this assumption I personally mean that there is a clear link between these two types of entrepreneurship and that they, in greater or lesser extent and whether we like it or not, even rely on each other. Perhaps foremost as an economist but also as a volunteer I dare to say that this connection is to be found in the economic relationship.
Anyone that has been working on voluntary basis knows that this isn’t an activity free of charge or as most economists would choose to put it, “time is money”. Now, if this expression is true, it means that also the social entrepreneurship partly depends on financial resources; resources that are usually not generated by the social worker himself, something which by definition is self-evident. Instead, the social enterprise relies on fundraising, the collection of funds from actors such as aid agencies, embassies or foundations; external actors, which in their turn are entirely dependent on the profit-generating sector for their survival. An example of this could be the application we made for a larger project on reproductive health that would be implemented with grants from a British aid organization. It was a mere sum of USD10 000 that might seem small from an economic entrepreneur’s point of view. However, for us as a single organization, a rejection of this application would imply a huge difference. If we don’t find a new donor there will be no project and furthermore no social improvement when it comes to reproductive health in Azerbaijan.
Consequently, that the social entrepreneur depends on the economic entrepreneur’s generation of profits seems quite natural but when we talk about the link between these two types of entrepreneurs it is also important to highlight the reverse dependency. Whether this dependence is direct or indirect is difficult to determine but personally I am of the view that social development can, over time, also lead to economic development. Most economists would argue that my reasoning is incorrect since they mean that it is the economic development that enables the social development. I am not saying that this statement is wrong but I do believe that it is a vast mistake to exclude the possibility that the achievements of the social entrepreneur also can be of great use for the economic entrepreneur.
A wealthier society contributes to a wealthier consumer, freer to make his own choices and freer to consume whatever he decides necessary to consume. Thus, according to me the key to a well-functioning social entrepreneurship is a better understanding of these positions of dependence. Our society is a sum of private, public and non-profit activities that collaborate directly or indirectly or in some situations even undermine each others. If we dare to believe that we are actually economically interconnected, whether it is through consumption, social development, or fundraising, we should also be able to enhance the effectiveness of our respective businesses. The social entrepreneur has a lot to learn from the economic entrepreneur and vice versa.
After this long discussion I can’t help to recall my meeting with Muhammad Yunus, the man who linked the bank’s money to welfare and social development in Bangladesh. It wasn’t such a bad idea after all.
