The growth in global economic prosperity has created a class of entrepreneurs for whom money is no longer the sole driver according to experts.
In an article titled “A Perfect Storm for Social Enterprises?”, Ignacio Mas and David del Ser outline the reasons why interest in the social enterprise sector will continue to grow worldwide.
Mas has a PhD in economics from Harvard University, and has worked in senior management roles at major companies including Vodafone Group, DOCOMO interTouch and Intel Capital.
Meanwhile, del Ser is founder and chief executive of Frogtek, a social enterprise that provides business tools for micro-entrepreneurs in emerging markets.
According to Mas and del Ser, interest in the social enterprise sector will continue to surge because it lies at the confluence of several “powerful” trends.
“There are three interlinked themes: the search for new approaches to the challenges of development, the spirit of technological innovation and growing global prosperity,” they write.
“There is… much interest in policies that make it easier to do business, remove obstacles to external enterprise financing and develop a pool of skills that can be readily harnessed by a growing entrepreneurial class.”
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“At the same time, there is growing faith in the potential of new technologies to dramatically expand the reach and accelerate the take-up of new ideas, goods and services.”
The authors claim technology has given consumers immediate accesses to information, which means “we now feel society’s shortcomings more vividly and immediately than ever before”.
“The affluent no longer live in a local bubble,” they write.
“Instead, there is a more shared planetary conscience. Problems may have gotten more complex, but concerned citizens and problem-solvers are more connected.”
In addition to being more aware of the problems around them, the authors argue people are also more eager to help than they have been in the past.
“Growing global economic prosperity in the world has generated a class of privileged people –both in terms of economic wellbeing and education – for whom money is no longer the sole driver,” they write.
“As prosperity, money and happiness become more de-linked, and people search different avenues to give purpose to their talents and toil.”
According to the authors, it is also worth noting that the global financial crisis has “taken the gloss” out of banking and finance, which is also contributing to the surge in social enterprise.
“Few now think that banking salaries, bonuses and investment returns correlate with socioeconomic contribution in any meaningful way,” the authors write.
“Many investors and finance professionals are therefore eager to bring back a sense of socioeconomic contribution that is distinct to dollar-based measures of investment success.”
“This trend is particularly strong in business schools, where the budding leaders… aspire to do good at the same time as they do well. One is no longer satisfying enough without the other.”
In the future the authors believe social enterprises will become less defined by what they do, and more by how and why they do it.
“But for that to be meaningful and sustainable, they will need to code their good intentions… into a set of governance, managerial and operational practices,” they write.