For-profit entrepreneurs have much to learn from the values, motivation, and vision of their socially motivated counterparts.
A recent conversation with a social entrepreneurship expert about the potential for social entrepreneurs to move into the for-profit space was greeted by a sharp rebut. Quite simply their motivations are different, was the argument.
However, in a world increasingly focused on addressing the United Nations’ Sustainable Development Goals (SDGs), is the distinction really still so marked?
As the University of Cape Town’s Farsan Madjdi and Badri Zolfaghari outlined in a recent article, while social entrepreneurs differ within themselves in terms of their motivations and approaches – for instance, community needs versus solving a specific challenge – they are still distinct from for-profit entrepreneurs in that they strongly rely "on their specific social goals and motivations in the creation of social ventures”.
The ethical, social, and moral fibre running through the veins of social entrepreneurs is a strong and admirable motivator, but increasingly as the world looks to solve issues identified by SDGs those would-be entrepreneurs who might not have regarded themselves as socially motivated might increasingly find their goals are linked to a broader community need.
A drive to make a difference
Many South Africans count "making a difference" among their drivers to go into business – 81.4% of entrepreneurs, according to the Global Entrepreneurship Monitor (GEM) South Africa 2021-2022 report. This, noted the GEM report, was even more pronounced among younger entrepreneurs.
It is also important to note that the social motivation of early-stage entrepreneurs in South Africa puts us head and shoulders above economies of a similar size (53%), the African region (62%), and indeed the GEM global average (47%) when it comes to this desire to contribute meaningfully to society.
A 2018 social enterprises report by GIBS, which noted the wealth of social problems presenting opportunities for social entrepreneurs, also made the point that “it seems logical that social enterprises would thrive in such situations”. They also determined that “young people find social entrepreneurship an appealing way of entering the working world”.
What doesn’t add up is how, given our pressing social challenges, South Africa continues to rank so low on the successful institutionalisation of entrepreneurship. This certainly doesn’t mean to diminish the incredible enterprises that have been started by entrepreneurs, many of whom are GIBS alumni, such as Chesray Abrahams (Kensington Capital), Jamal Sahib (Africa32 Business Consulting), and Stacey Brewer, whose Spark Schools concept was born out of a desire to make a meaningful change to education.
While these remarkable businesses stand as testament to what can be achieved, in reality entrepreneurship in South Africa remains a largely unfulfilled promise, in spite of the myriad incubators and government ministries and black-economic empowerment frameworks in place.
Are these interventions just solving for the symptoms without tacking the core of the problem – the "Three Cs".
Building the ‘Three Cs' of entrepreneurship
The Three Cs of Entrepreneurship come down to competence, confidence and capital. Any potential entrepreneur must have a degree of competence and the skills to start, build and scale a business. Then they need capital – be it financial input or the social capital and network to garner support. Finally, they need the personal confidence to make it happen.
As a society, and as a business school, we can build on these Three Cs. The work being done by our Entrepreneurship Development Academy (EDA) is essential to developing all three areas, by fostering networks locally and globally, developing programmes that build confidence and competence through education and coaching support.
Initiatives such as EDA’s partnership with the Walmart Foundation, Corteva Agriscience, the Cherie Blair Foundation for Women, and the government of Flanders have all been crucial in helping to grow and support incredible entrepreneurs such as Luyanda Sisusa (Syma Agri-Business) and Bongani Mabuza (African Accent Brands). Since 2012, the EDA has trained more than 2 700 entrepreneurs, with a focus on helping them to develop sustainable businesses.
This may seem like just a drop in the ocean when it comes to the number of unemployed people in South Africa, many of whom need business skills and psychosocial support to build the capitals required to establish solid entrepreneurial enterprises. However, each business that tries and fails, and tries again, begins to build within society a tolerance of failure, experimentation, and innovation; a combination that builds resilient and relentless entrepreneurs.
What is important is to spot a need, and to start.
Given the plethora of social challenges in South Africa, it is inevitable that many businesses might first start life as a way of addressing these pressing needs. Many of these entrepreneurs will be intrinsically socially motivated, others will spot a gap.
The opportunity we have now is to embed socially minded business practices into a new generation of entrepreneurs, to make issues of sustainability, community involvement, values and ethics an integral part of how we "do" entrepreneurship.
This in no way dilutes or takes away from the growing number of motivated and well-intentioned social entrepreneurs in society, but encouraging young South Africans to solve social needs through entrepreneurship – even if their primary motivation is ultimately to make a living – can help to embed the Three Cs across the entire ecosystem while also embedding agility and resilience. That can’t be a bad thing.