Thursday, March 25, 2010

Is All Entrepreneurship Social?

Carl Schramm makes the case in a Stanford Social Innovation Review article that all entrepreneurship is social. "Let’s not overlook what traditional entrepreneurs contribute to society" he worries and provides several cases (largely in a US context) to support the thesis.

This is a question I used to struggle with but in the last year I have developed a position: All entrepreneurship is not social. That is because we do not live in an ideal world. The cost of development is disproportionately born by the poor (think toxic e-waste for one), often willingly, in the name of progress. In India, despite high growth rates in the last 10 years and a burgeoning middle class, the poverty indicators as measured by opportunity (i.e. basic food, education and health-care access) have actually declined- creating social tension that rips the very fabric of the unique Indian ethos. So like quotas and affirmative action - in an ideal world we wouldn't need them; but till there is equal opportunity for all we do. Similarly ideally, all entrepreneurship is social - but only if there is equal opportunity. Till then, it is merely obfuscation to blur the line between business motivated by social impact and business.

The irony is that in India where entrepreneurs actually do social good, creating local jobs, innovation and creating a market at the bottom of the pyramid, the term social entrepreneur is relatively unknown and if known draws wonderment - because isn't all entrepreneurship social? In their case I agree. It takes a lot of guts to be an entrepreneur in a developing econnomy because the cost of failure is high while there is safety in a job or joining the family business that serves the developed economy.

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