2013.04.12  Social Entrepreneurship

More than half of the world’s population currently lives in urban areas. Of this, 70% of the population is located in developing nations and this percentage is rapidly rising, increasing to about 95% by 2060. Urban populations in developing nations face severe challenges—socially, economically and environmentally.  For example, 30% of urban populations worldwide live in slums. As designers, we have skills that can affect change in these environments—we have the ability to coordinate programmatic needs with spatial solutions that improve the quality of life.

As the world’s population is shifting to urban cities in the developing world, how can we develop a business model that is flexible enough to interact in this exploding market, a market that is 2.5 billion people strong and growing? Developing markets are rife with challenges—direct funding capacity, political stability, location and complex social structures to name a few.

Yet, these areas are also ripe with opportunities—multifaceted funding interests, abilities to leapfrog technology, innovative organizational models and creative forms of sustainability that are often non-technical. It is easy to understand how the skills we’ve acquired from working on some of the most innovative projects in the developed world could benefit projects in the developing world. Could this also work in the other direction, can we learn skills from working in the developing world that would give us an advantage in the developed world?

A business approach that may prove useful in strategizing how to increase our design work in the developing world is the concept of social entrepreneurship. Though this concept is nothing new, it has attracted increased attention in the last five to ten years, both as a way for businesses to have a greater and more direct impact on issues they find important and as an alternative to international aid models that have increasingly come under criticism for their long-term sustainability. Social entrepreneurship attempts to organize business around a social issue rather than a client. They are mission driven. This model may have multiple clients that each support the engagement of a single issue, possibly with different agendas that are organized and aligned by the entrepreneur. This model is therefore far more challenging in developing and managing clients or funding sources, yet provides distinct opportunities in its ability to focus an organization’s mission. Social entrepreneurship is ground up rather than top down.

Two primary business models exist for social entrepreneurship. As defined by Samer Abu-Saifan in Social Entrepreneurship: Definition and Boundaries, social entrepreneurship can either be a non-profit organization with an earned income strategy or a for-profit company with a mission driven strategy. On the non-profit end of the spectrum, these organizations would aim for mission growth while operating as a self-sufficient entity from their earned income and not reliant on grants or donations in the way that most non-profits currently are. Alternatively, for-profit companies would be aim for profit growth in order to sustain a mission goal.

How can social entrepreneurship be incorporated into the way we do business? How can we explore new funding sources to do project work? What business models are we not considering as the basis for project creation?