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All Entrepreneurship is social?

Interesting article from this months Stanford Social Innovation Review, by Carl Schramm who is President and CEO of the Ewing Marion Kauffman Foundation. In it he makes an interesting argument that over the past decade the term social entrepreneur has become “a fashionable way of describing individuals and organizations that, in their attempts at large-scale change, blur the traditional boundaries between the for-profit and nonprofit sectors. Given the ceaseless appearance of innovations and new institutional forms, we should welcome a new term that allows us to think systematically about a still-emergent field.”

He argues that use of the term ‘social’ could diminish the contributions of regular entrepreneurs, those who create new companies and then grow them to scale.He points out that these regular entrepreneurs create thousands of jobs, improve the quality of goods and services available to consumers, and ultimately raise standards of living. One example he uses is the mobile phone, he agrees that they obviously cannot cure diseases, but:

“They can spur the development of new business models, new companies, new technologies, and, thus, economic growth. Among businesses, cell phones also facilitate the scaling up of networks, firms, and innovations. They allow people to dream big, rather than focusing only on staying afloat. Several studies in the past few years have found that a 10 percent increase in cell phone penetration in developing countries would increase the annual growth rate of per capita gross domestic product (GDP) by nearly 1 percentage point.”

There is no doubt that economic prosperity is a potential help in getting people out of the poverty trap, but as we have seen in Ireland in recent years, this economic growth doesn’t necessarily mean that a gap in incomes doesn’t appear. A rising tide does not mean all ships rise.

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