Joseph Schumpeter, the Austrian economist who became famous for recognizing that economic growth depends on innovation, wrote about entrepreneurship after making and loosing a small fortune in private banking. I doubt that Professor Schumpeter held a romantic view of entrepreneurship, having struggled to avoid lawsuits and repay lost loans and investments himself. Nor should we allow ourselves to romanticize the topic, especially in its latest incarnation, social entrepreneurship.
Most entrepreneurs toil mightily for modest reward, in small to mid-sized entities that may never grow large enough to sustain themselves beyond the working lifespan of their founder. Is this a bad thing? Well, it does remind us that society idealizes entrepreneurs but fails to really support them. What it also reminds us is that the rewards actually achieved by the majority of entrepreneurs are the ones that plausibly motivate all of them: more autonomy, creativity, achievement opportunity and personal growth than in the jobs they left behind. These are the things that induce people to leave canned jobs and try to create their own. These and, sometimes, necessity, although (counter-intuitively) new business formation goes down with a down economic cycle, not up, so it’s not necessity, but means, that induces most would-be entrepreneurs to take the plunge.
The romance gets laid on thick as frosting when it comes to socially-minded entrepreneurs. These do-gooders, with the ready support of friendly grant-makers and donors, easily create new organizations to address all our urgent problems, from world hunger and disease to global warming. The rest of us need but to blunder along as usual, digging ourselves ever deeper into contaminated soil, but no matter: Social entrepreneurs, our modern knights in ethical armor, are thundering our way, just in time to bail us out again. Or so one might think by the coverage of the topic. A high-profile Social Enterprise Conference is taking place next month in Cambridge (MA), the promotional cross-fertilization of Harvard Business School and Harvard’s Kennedy School of Government. Forbes lauds thirty under-thirty-year-old social entrepreneurs. And the Schwab Foundation lauds the top twenty social entrepreneurs of the year in its annual competition. (Founded in 1998, this foundation took center stage in its branding: It’s full name is the Schwab Foundation for Social Entrepreneurship. Other foundations may wonder what they’ve been funding for all those decades past; is a worthy proposal from a non-profit not social entrepreneurship unless you’re new and hip and good at branding?)
A syndicated PBS story (originating with Oregon Public Broadcasting) captured the flavor best, I think, with its title: The New Heroes. Who are they? The official definition according to PBS is really quite the a jaw-dropper for its scope and ambition: “A social entrepreneur identifies and solves social problems on a large scale. Just as business entrepreneurs create and transform whole industries, social entrepreneurs act as the change agents for society, seizing opportunities others miss in order to improve systems, invent and disseminate new approaches and advance sustainable solutions that create social value.” (Quote is © Copyright 2005, Oregon Public Broadcasting. Underscores added.) How would you like to be someone who, on a large scale (read fame, fortune and Forbes), acts as the change agent for society! Wow. Print me up some business cards with that as my title and a map of the continent, no, make that the entire globe, for my logo! It’s a tough job, being a social superhero, but someone’s got to do it.
The thing is, lots of people are already doing it. Have been all along. I’m mystified as to why this myth of the super-change-agent-do-good-entrepreneurial-whiz-kid has recently flooded the zeitgeist. Just the latest rescuer myth, I suppose, but one that deftly weaves threads from Internet entrepreneurship, global warming, economic crises, and crippled central governments to give us, ta da, the brilliant young outsiders, oh, say, a few dozen of them should do, who, locked out of conventional federal, state and local funding, with limited access to traditional grants and philanthropy, but with a state of the art laptop or tablet under their arm and a gleam in their eye, solve the intractable social and environmental problems left over from their parents’ generation. Look at them go! It’s like a Marvel action movie, but better. They really exist. Or do they? I’m not so sure.
People have been working hard on social problems for a long time, in state-funded entities, in nonprofits, in NGOs, through their churches and local community groups, and through their giving. Millions of people. It’s an entire, major, sector of our economy. (The Center for Civil Society Studies at Johns Hopkins University estimates more than 10 million people are employed by nonprofits in the U.S., for example.) Many of these people work on a very small scale, quite locally or with a narrow focus on one issue, because that is often the most realistic option. Others may, on occasion, find their work growing to larger scale, but the thing is, even those who head large social enterprises are not, generally speaking, social superheroes. Many are just hard-working people who care enough about their work that they’d rather be a relatively low paid nonprofit exec (for example) than take a less meaningful but more lucrative job in the private sector. I’m all for meaningful work, and I love the opportunities I get to consult with nonprofit boards or help raise grants for charitable organizations. It’s much more rewarding, and much less lucrative, than the consulting and writing I’ve done with for-profit firms. But in a couple decades plus of working with nonprofits, I’ve yet to bump into any superheroes. I’m not so sure they even exist.
Innovation is certainly important to society as a whole, and just as important in social-benefit endeavors as anywhere else. And like all entrepreneurship, it is hard—Schumpeter’s banking failures proved that point early on. But social entrepreneurship is not a new thing, nor is it confined to a handful of media darlings who’ve done something flashy enough to win a moment in the limelight. We need to recognize the entire sector and all those who work in it. And we need to encourage their innovative spirit broadly, not only by holding events to laud the wunderkinds of social innovation, but more importantly, by offering our help, funding, and other resources as generously and broadly as possible. The for-good sector is perennially underfunded compared to the for-profit sector. As long as we remain dazzled by the social-entrepreneurship myth, we will continue to underfund and under-appreciate the bulk of those who work for social good, while idolizing the media-ready few.
Alex Hiam
Author, Business Innovation For Dummies
Amherst, Mass., January 2015
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