# data[].attributes.attachment_link.title
Global Innovation Index 2024 - Special Theme 2024: Unlocking the Promise of Social Entrepreneurship

# data[].attributes.attachment_link.description
Tracking the most recent global innovation trends, the GII finds that innovation investment slowed in 2023, in marked contrast to previous years, making the prospect for 2024/2025 remarkably uncertain. But the outlook is not entirely cloudy. Technological progress and adoption in fields as diverse as supercomputing, connectivity, health, sanitation and green technologies continues unabated.

# data[].attributes.attachment_link.title
17 Social Entrepreneurship and CSR: Navigating Hybridity with B Lab’s Tools

# data[].attributes.attachment_link.description
17 Social Entrepreneurship and CSR: Navigating Hybridity with B Lab’s Tools was published in De Gruyter Handbook of Social Entrepreneurship on page 433.

# data[].attributes.attachment_link.title
6 books to make you a better global citizen

# data[].attributes.attachment_link.description
These books by Schwab Foundation social entrepreneurs shed light on how to build a better system.

# data[].attributes.attachment_link.readable_text
DOI:
https://doi.org/10.54337/jbm.v12i2.8844

Abstract

In this interview-based article, Professor Christian Nielsen summons two of the latest decades' biggest management thinkers, the two inventors of the Business Model Canvas, Alex Osterwalder and Yves Pigneur, for a conversation about the current challenges for companies in doing business model innovation. According to Alex and Yves, companies face two major challenges. First, companies have inadequate governance structures for allowing innovators to do decent work, and second, the old guard knows jack shit about innovation. Unfortunately, it is precisely the old guard sitting with the management reigns at this time. Our conversation identifies three enablers to help overcome these challenges. First, the enabler is about ensuring leadership commitment and allocating management time to innovation. The second enabler is the ability to kill ideas. This is important, because every company needs to focus its innovation efforts, besides ensuring that budgets and resources are channeled in the most fruitful directions. The third enabler is building an innovation culture that coexists with an exploitation culture and where innovators can thrive. In successful companies, innovators are not pirates; they are highly esteemed contributors to corporate success. Finally, we get a sneak peek at their current work focus.

References

O'Reilly, C. A., & Tushman, M. L. (2004). The ambidextrous organization. Harvard business review, 82(4), 74-83.

Osterwalder, A. (2004). The business model ontology a proposition in a design science approach (Doctoral dissertation, Université de Lausanne, Faculté des hautes études commerciales).

Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries, game changers, and challengers (Vol. 1). John Wiley & Sons.

Osterwalder, A., Pigneur, Y., Bernarda, G., & Smith, A. (2015). Value proposition design: How to create products and services customers want. John Wiley & Sons.

Osterwalder, A., Pigneur, Y., Smith, A., & Etiemble, F. (2020). The invincible company: how to constantly reinvent your organization with inspiration from the world's best business models (Vol. 4). John Wiley & Sons.

Polman, P. & A. Winston (2021), Net Positive: How Courageous Companies Thrive by Giving More Than They Take. Harvard Business Review Press.

# data[].attributes.attachment_link.authors[].name
Authors Christian Nielsen Alex Osterwalder Strategyzer Yves Pigneur University of Lausanne

# data[].attributes.attachment_link.title
How do you enable business model innovation to thrive in your organisation? | Journal of Business Models

# data[].attributes.attachment_link.description
In this interview-based article, Professor Christian Nielsen summons two of the latest decades’ biggest management thinkers, the two inventors of the Business Model Canvas, Alex Osterwalder and Yves Pigneur, for a conversation about the current challenges for companies in doing business model innovation. According to Alex and Yves, companies face two major challenges. First, companies have inadequate governance structures for allowing innovators to do decent work, and second, the old guard knows jack shit about innovation. Unfortunately, it is precisely the old guard sitting with the management reigns at this time. Our conversation identifies three enablers to help overcome these challenges. First, the enabler is about ensuring leadership commitment and allocating management time to innovation. The second enabler is the ability to kill ideas. This is important, because every company needs to focus its innovation efforts, besides ensuring that budgets and resources are channeled in the most fruitful directions. The third enabler is building an innovation culture that coexists with an exploitation culture and where innovators can thrive. In successful companies, innovators are not pirates; they are highly esteemed contributors to corporate success. Finally, we get a sneak peek at their current work focus.

# data[].attributes.attachment_link.title
14 Experiential Learning Programs for Social Innovators and Social Entrepreneurs

# data[].attributes.attachment_link.description
Learn about these 14 experiential social entrepreneurship programs to grow your skills as a social entrepreneur or social innovator.

# data[].attributes.attachment_link.provider_name
Clear Impact - Clear Impact Software and Services

# data[].attributes.attachment_link.title
Social Impact Measurement: What is Social Impact and How do we Measure it? - Clear Impact Social Impact Measurement: What it is & How to Measure Impact

# data[].attributes.attachment_link.description
Learn how to measure social impact effectively with step-by-step guidance, key metrics, and real-world examples. Choose the best framework for your goals.

# data[].attributes.attachment_link.title
How to Measure Social Impact: 8 Best Practices - Submittable Blog

# data[].attributes.attachment_link.description
Learn 8 best practices that outline how to measure social impact

# data[].attributes.attachment_link.readable_text
External Funding

External funding is money available to an organization in addition to its earned revenue. It may be received in the form of an equity investment or charitable contribution. Sources may include private individuals, institutions, venture capital, foundations, and the government.

# data[].attributes.attachment_link.description
External Funding External funding is money available to an organization in addition to its earned revenue. It may be received in the form of an equity investment or charitable contribution. Sources may include private individuals, institutions, venture capital, foundations, and the government.

# data[].attributes.attachment_link.description
Selected Editorial Reviews Frontiers in Social Innovation arrives just in time as we confront the challenges facing a world recovering from the pandemic. This comprehensive solutions-focused publication addresses the critical themes that leaders in all fields must tackle - whether social entrepreneurs, impact investors, non-profit and foundation leaders, or corporate executives - as they pursue opportunities to shape innovations that will benefit society.

# data[].attributes.attachment_link.readable_text
Download the PDF: What is Social Business?
How can one define "social business"?

Broadly speaking, "social business" is a form of business striking a balance between social objectives and financial goals, situated somewhere between profit-maximizing business and the non-profit sector.(1) When understood in such broad terms, social business represents a significant sector of the economy: In the U.K. for instance, according to precise estimations, social enterprises employ 5% of the country's workforce (2 million people) and represent 3% of its GDP (£60 billion).
Source: Social Enterprise UK: Hidden Revolution - Size and Scale of Social Enterprise in 2018.
Professor Muhammad Yunus, Nobel Peace Prize laureate and founder of the first micro-credit organization Grameen Bank, defines social business more narrowly as a kind of business:(2) (3)

Whose primary aim is to address a social problem;

Which is financially self-sufficient;

Which does not pay dividends to its owners.

Yunus sees social business, as an alternative and potentially more useful way for philanthropists to place their money: Rather than making a one-time donation, they can invest in viable businesses generating recurring benefits. Potential profits are reinvested in the business endeavor itself rather than paid out to its owners, allowing to expand the produced positive social impact.

How does social business differ from conventional for-profit business?

As compared to regular for-profit business, social business inverts the relative priorities of profitability and social impact: The creation of social wealth moves into the foreground, becoming the primary focus of interest and activity.

Reversely, profitability is seen as a mere means to that end, sought only to the extent that it assures the financial viability of the business endeavor.

Importantly though, social business is still "business", not charity. The owners of a social business are not philanthropic donors: Although they do not receive a monetary compensation for their investment, they are still entitled to recover it.

Hence a social business must be financially self-sustaining, requiring from those who run it a series of conventional business capabilities, such as market oriented thinking, innovativeness, and a managerial mindset.

What welfare benefits does social business generate as compared to conventional for-profit ventures?

Social business aims at solving societal issues that neither states nor civil society have been able to successfully tackle by themselves.

Such specificities as the social goal orientation and the renunciation of dividend payments as well as the efficiency of these market approaches make it possible. In other words, the surplus value generated by social business takes the form of social profit (e.g. better purchasing terms or employment conditions) instead of capital growth.

Who engages in social business?

Social business is primarily conducted by social enterprises that are entirely geared to that purpose and financed by non-dividend paying equity.

A good example is the micro-credit pioneer Grameen Bank, which was created by Mohammed Yunus in 1983.

In recent years, a small but growing number of publicly listed corporations has decided to enter the field of social business, by creating separate lines of products and services specifically targeted at poorer sections of society and produced and distributed on a "no-loss-no-gain" basis. Danone was among the first of these companies. In 2006, it liaised with Grameen Group to create Grameen Danone Food, a joint venture providing rural populations in Bangladesh with affordable dairy products, enriched in nutriments. In subsequent years, companies like Veolia and Renault followed Danone's example.

Some companies criticize Yunus' understanding of social business as being too narrow, since it excludes investors willing to invest in impactful activities but still expecting some return on investment. Organizations such as the French Development Agency (AFD) accordingly adopt a somewhat more relaxed understanding of "social business", allowing dividend payments.

What makes a successful social business model?

Generally speaking, successful social businesses do not simply replicate or marginally adapt existing business practices: They are often based on innovative business models, entirely geared towards best serving their target beneficiaries. Several key requirements are needed to build up such a successful social business model: encouraging social impact-oriented shareholders that fully endorse the business endeavor, and establishing partnerships that bring complementary resources and expertise. These partnerships can be established with other companies, public institutions and civil society organizations. They work in a "co-creation" model, as promoted by the French Action Tank Social & Business.⁽³⁾
REFERENCES
(1) Battilana, J., & Lee, M. (2014). Advancing research on hybrid organizing-Insights from the study of social enterprises. The Academy of Management Annals, 8(1), 397-441.

(2) Yunus, M., Dalsace, F., Menascé, D., & Faivre-Tavignot, B. (2015). Reaching the rich world's poorest consumers. Harvard Business Review, 93(3).

(3) Yunus, M., Moingeon, B., & Lehmann-Ortega, L. (2010). Building social business models: Lessons from the Grameen experience. Long Range Planning, 43(2-3), 308-325.
Discover the Inclusive and Social Business Certificate More about the Movement for Social*Business Impact

# data[].attributes.attachment_link.description
There is currently no single definition of "social business", but the most prominent one is that offered by Nobel Peace Prize laureate Muhammad Yunus. He defines social business as a business " which objective is to solve social, economic and environmental issues affecting humanity: hunger, homelessness, illness, pollution, ignorance,...".

# data[].attributes.attachment_link.readable_text
The importance of entrepreneurship to the economy is well established. Entrepreneurship drives economic growth and helps to solve society's intractable problems, from curing disease to lowering pollution. For this reason, governments have a vested interest in crafting policy that helps entrepreneurs to thrive. Whether to spend less or more is a big part of that decision.

One of the most fundamental debates in economics is how government spending on entrepreneurial activity, business ownership, and the public's view of entrepreneurship as a career choice impacts the economy, entrepreneurship, and general wellbeing. Two broad camps have emerged: proponents of free markets and small government vs. those who favor a more robust government role in managing the economy. Is it better to regulate markets and redistribute society's profits, or to fully unbind the Invisible Hand?

When it comes to entrepreneurship, there is an argument for each approach. The Keynesian or "market failure" model says that free markets entail a lot of inefficacies that the government can help deal with. The Darwinian free market may discourage entrepreneurship because failure could mean destitution, encouraging people to stick with safer but less transformative jobs. On the other hand, if too much profit and capital are allowed to stay within one company, individual, or social group, the system becomes less dynamic and innovative, and more feudal.

The opposing view, known sometimes as the Austrian view for the economic school of thought that contributed to it, disagrees with these ideas. The "Austrians" assert that social spending only distorts optimal decision-making. Higher taxation needed to fund social programs makes business ownership more expensive. It also disincentivizes entrepreneurship by offering more attractive alternatives, such as a government job or simply enjoying the fruits of the welfare state.

We recently conducted a study to test these opposing assertions. Among other surprising findings, our results favored the Austrian camp, suggesting social spending has a negative effect on entrepreneurial activity, business ownership, and even how the public perceives entrepreneurship as a career.

Background

The relationship between government spending and economic activity is an interesting problem because it's been studied for a long time, yet it continues to yield conflicting conclusions. While relatively few, several studies have also directly investigated the link between social programs and entrepreneurship. They similarly find themselves at odds.

Some studies support the market failure theory: that social spending functions as a gymnastics mat, allowing entrepreneurs to take bigger risks and achieve greater victories, insured against a more painful fall. For example, studies of "food stamp entrepreneurs" (Olds, 2013) found that social spending reduces the economic barriers an entrepreneur may face.

Other studies have found just the opposite: social spending provides attractive alternatives to the risk and sweat of striking out alone, and the accompanying taxes reduce incentives even further (Cowling and Bygrave, 2006). Studies supporting the Austrian view find that freer markets have more robust levels of entrepreneurship and economic dynamism, while those with a more active government role tend to fall on measures of both.

The reason for such conflicting findings likely comes down to the fact that both ideas are partially true. A base level of social spending provides a social safety net against becoming destitute that likely does encourage entrepreneurship for some who may otherwise not have ventured out alone. However, if taken past providing basic support the higher taxes and more comfortable economic conditions lower the incentive and necessity to stake one's claim. The question is: have the world's developed nations that provide some degree of social support, surpassed the crucial base level or have they yet to meet it?

Our study

To study the effect of social spending on entrepreneurship, specifically SME's (small and medium enterprises) we took high-quality data from 31 countries, from 2004 to 2011. We focused on the effects of changes in social spending within each country during that time period. Most of the countries studied are considered developed and democratic, with a couple middle-income exceptions like Mexico. We got our data from three highly reputable sources: the GEM (Global Entrepreneurship Monitor), The World Bank, and the Organization for Economic Co-Operation and Development (OECD).

Our fundamental research question was whether social spending, putting a floor on the income of all citizens and taxing those that are higher above that floor, hurts or harms entrepreneurship at the country level. Specifically, we looked at social spending on entrepreneurial activity, business ownership, and the public's view of entrepreneurship as a career choice and defined it as the percentage of GDP that each country spent in each year (data was from the World Bank). We measured across time at the country level, studying how a change in social spending drove three key indicators of entrepreneurial vigor.

Then, for each country in each year, we measured social spending's impact on three key variables: (1) Total Early-stage Entrepreneurial Activity (the percentage of working-age adults, age 18-64, starting out as entrepreneurs), (2) business ownership (the percentage of working-age adults who own a business that employs other people), and (3) public perception of entrepreneurship (the percentage of working-age adults who think entrepreneurship is a good career.

Within each country, and for every year, we related social spending to those three markers of entrepreneurial health, in order to tease out the impact that social spending had on them. For business ownership and entrepreneurial activity, we lagged the impact of social spending by one year -- for example, measuring 2005's spending against 2006's level of business ownership -- in recognition that it takes some time for changes in social spending to impact rates of business ownership and new ventures.

A number of variables can muddy the relationship between social spending and our three measures of business dynamism, and we wanted to be sure to tease out the effect of "welfare state" spending, so theoretically-appropriate control variables were also factored in (e.g., GDP per capita, public programs assisting SMEs, financing availability for entrepreneurs, etc.).

Our Findings: A Point for the Austrian Model

Our results support the Austrian narrative: from 2004 to 2011, social spending reduced all three measures of entrepreneurial health. At the country level, an increase in social spending led to a decrease in small business ownership as well as entrepreneurial activity: fewer people owned employing businesses or worked for themselves. Additionally, an increase in social spending predicted a decrease in the public's perception of entrepreneurship as a positive career choice.

The impact of social spending was dramatic and statistically significant, meaning it is extremely unlikely that no relationship exists, for all three variables. If an additional percent of GDP went to social spending, for example from 42% to 43%, the rate of early entrepreneurs and business ownership fell by about a quarter to a third of a percent, respectively. Although this may sound like a small number in percent change, GEM estimates in 2023 there are 31 million entrepreneurs in the US, and a reduction in one third of a percent means a loss of over 100,000 businesses. The impact on perception was even more dramatic; there was an almost a one-to-one negative relationship (-0.88) between a change in social spending and the public perception of entrepreneurship as a good career choice. Furthermore, these relationship imply increases in social spending above the base level equate to paying to discourage and lose entrepreneurs.

Two theories might explain this. One is that social spending, including the creation of attractive government jobs, makes the opportunity cost of entrepreneurship higher. Entrepreneurship, a risky and stressful endeavor, now has to compete with the alternatives of a well-paying job in the public sector or to simply enjoy the fruits of the welfare state.

The cost of entrepreneurship is also more directly raised by the taxes necessary to finance greater social spending. Higher public spending entails higher taxes, which can lower what an entrepreneur might expect to earn by striking out alone, especially at the upper bound of that expectation. The result is that people are more comfortable near the middle of the economic income pyramid, spared the discomfort of the bottom and with less perceived access to the top.

Conclusion

There are two widely held beliefs about how social spending affects entrepreneurship: it encourages it by providing a safety net to encourage experimentation, or it discourages it by making it easier not to undergo the difficult and perilous founder's Journey. This study suggests that the latter effect is stronger than the former.

With this in mind, governments crafting a pro-entrepreneurial policy may be best off leaning toward free markets, and cautioned against expecting social spending to boost a public spirit of entrepreneurial adventure. Of course, these decisions should be weighed in the bigger picture of what is best for society, which of course goes beyond just entrepreneurship.

Explore the Research

The effects of social spending on entrepreneurship in developed nations. Small Business Economics, 2022. https://doi.org/10.1007/s11187-021-00458-9

References

Cowling, M., & Bygrave,W. D. (2006). Entrepreneurship, welfare provision, and unemployment: Relationships between unemployment, welfare provision, and entrepreneurship in thirty-seven nations participating in the global entrepreneurship monitor (GEM) 2002. Comparative Labor Law and Policy Journal, 28(4), 617-635.

Olds, G. (2013). Food stamp entrepreneurs. Working paper no. 1-33, Brown University Graduate School of Economics, Providence, RI.

# data[].attributes.attachment_link.description
An international study found that government programs that guarantee a safety net made people less likely to risk their financial security by starting a venture.

# data[].attributes.attachment_link.description
We provide decision-makers and everyday citizens with the very best data on the social and environmental health of their societies and help them prioritize actions that accelerate social progress.

# data[].attributes.attachment_link.authors[].name
Daniel Goleman Contributor, Korn Ferry Institute

# data[].attributes.attachment_link.description
Best-selling author Dan Goleman explains why the two are both complementary and critical to growing long-term value.

# data[].attributes.headline
 Article - Stanford - Finding Your Funding Model 

# data[].attributes.subject
 Article - Stanford - Finding Your Funding Model 

# data[].attributes.headline
Article - Stanford - 10 Non-Profit Funding Models 

# data[].attributes.subject
Article - Stanford - 10 Non-Profit Funding Models 

# data[].attributes.headline
 Book Chapter: Launching a Social Business 

# data[].attributes.subject
 Book Chapter: Launching a Social Business 