Dr. Donn Miller-Kermani is the director of the Women’s Business Center in the Nathan M. Bisk College of Business at Florida Tech. In this capacity, Dr. Miller-Kermani is a champion of youth entrepreneurship. She provides training, mentoring, and counseling services to nascent entrepreneurs and small businesses in our region.
Recently, we have been asked about social entrepreneurship as a means of starting and growing a business. Dr. Miller-Kermani gave an interview to shed some light on this very important topic.
What is the difference between social entrepreneurship and for-profit entrepreneurship?
I recently read an article by Johanna Mair and Ignasi Marti which notes that the concept of social entrepreneurship is still poorly defined. Most people associate social entrepreneurship with “non-profits” but that is not necessarily the case.
I feel that social entrepreneurship can be for profit but the underlying mission is to provide social value. In other words, provide some type of social change or address a need. The social entrepreneur wants to make a positive difference either via sustainability, giving back to the community in a significant way, or providing something that will change the welfare of society. The article argues that the main difference between for-profit entrepreneurship and social entrepreneurship is in the “priority given to social wealth creation versus economic wealth creation.”
Is the sole purpose of social entrepreneurship to generate social value?
While social entrepreneurship does focus on generating social value, I don’t believe the sole purpose is to do so. The social enterprise, in order to remain sustainable, must have an underlying need for earned income. Successful social ventures produce social change while continuing to generate income for self-sufficiency.
Does an entrepreneur need a strong business skillset given the main focus is benefits to society?
Yes, it is essential to have strong business skillset no matter what the business venture. A clear understanding of planning, strategy, leadership, marketing, accounting, financial management, and ethics drive the social venture in the same way as any other entrepreneurial venture. In order to be sustainable, all aspects of the organization must be strategically managed and monitored. A strong business foundation can ensure that the social venture is sustainable and self-sufficient.
If a social need is well-known (e.g., clean water in remote areas), why are finance and marketing considerations still an integral component of the business planning process?
Even though the main focus may be on social need, the financial impact is important for long-term growth and sustainability of the enterprise. Social entrepreneurs must clearly identify the market and strategically plan to reach that market in order to be sustainable and to grow. Providing clean water in remote areas, for example, requires financial resources to achieve that business objective. Strategic planning is needed to identify how to viably provide such products and services. Both financial and marketing plans are integral to making a “go” or “no go” decision in moving forward with social entrepreneurial endeavors.
Is social entrepreneurship a new concept or even a fad?
I don’t believe social entrepreneurship is necessarily a new concept, but I do feel that it has become much more prevalent that it has been in the past. More and more organizations realize that they have the responsibility and capability to address social needs in a responsible manner.
I don’t know if you can say it is generational. Many of the social ventures are started by boomers who have made their money in corporations and now want to give back. Younger Gen X and Gen Y individuals truly want to make a difference in this world. It might also be a function of the global economy today.
We are all interdependent on each other. Research and developments on the success of social endeavors have been recently brought to the forefront with, for example, the Yannis Eunis receiving the Nobel Peace Prize and recognition of the amazing success of the Grammeen Bank in developing countries as well as other successful ventures.
I personally do not feel that it social entrepreneurship is a fad. Governments cannot bear the responsibility for providing social services for those in need. It becomes everyone’s responsibility to address social and environmental issues of the day. Today, we are a global economy with worldwide communities. Given an opportunity, there is the potential for economic prosperity and growth in the global marketplace.