What is the Difference between Social Innovation, Social Enterprise & Social Entrepreneurship?
I am often asked how I come up with blog topics. The answer is some come from collective client work, some are sparked by life experience and others are inspired by colleagues. Today’s topic comes out of Dallas’ Startup Week, where I recently had the pleasure of serving on a panel called “So You Want to Do Some Good.” We had a great conversation about a wide variety of topics, including our vision for the future of social change. If you are interested, here is a great synopsis.
The panel reminded me that as more people join the tribe we call “social entrepreneurs,” the greater our need is for common social terminology. More importantly, we need common definitions for the terms we use, or we risk them becoming meaningless.
As a social entrepreneur for more than two decades, I have started many social enterprises. I have not only studied the nature of the work, but I have also practiced it, on my own and through clients. Drawing on my experience in the field, I have developed a simple construct to help unite us and showcase the three main approaches to social change:
- Social Innovation is about the IDEA. And not just any “new idea.” For the social sector, social innovation has to be an idea — in the form of a product, service or method — that creates change, performs better than existing solutions and for which the value accrues primarily to society. For example, a cell phone isn’t a socially innovative product by itself, but can be used to diagnose disease. An innovative social service could be a policy change that allows teachers access to student loan deferment or forgiveness to teach in distressed communities or schools. Pay-for-success is an innovative method used to pay for socially beneficial improvements. Ultimately, to truly claim the highest standard of social impact, innovative ideas must be tested.
- Social Enterprise is about the BUSINESS MODEL. Social enterprise is a business — whether operated by a for-profit or nonprofit — that has a double bottom line of both maximizing social and financial return.While social enterprise may use some philanthropic dollars in the start-up phase or for special projects, it is geared toward the creation of a self-sustaining, market-based business model.
- Social Entrepreneurship is about the MINDSET. Social entrepreneurs are change agents who are relentless about fashioning bold and creative solutions — through the creation of new organizations or as “intrapreneurs” within existing organizations and communities — to create social change. While they are social entrepreneurs, their organization may or may not be a social enterprise, and their idea may or may not be socially innovative. What defines social entrepreneurs are the three main principles they follow: 1) They fall in love with the problem and not the solution. 2) They believe no one owns a social solution. Instead, it should be co-created with the community to ensure sustainability and impact using a change management philosophy. 3) They know impact is the bottom line of the social sector. They don’t rely on innovation and invention alone; they prove impact and pursue scale — making them both visionary and disciplined in their approach.
What brings us together in the social sector is our common belief that social change is essential to creating a society in which everyone prospers. And, as I shared in my thoughts about my vision for the future at the panel, I am hopeful for the day when social change is no longer discussed separately from other forms of business, because every business impacts and determines outcomes for people in our communities. We’d love to hear your thoughts on these definitions and how we can help standardize social terminology.
