Cynics see the term as something that merely emerged from the blogging community’s current obsession with entrepreneurship and creating value. The idea of a social enterprise seems more dynamic and fashionable than a charity.
That’s not, however, exactly what a social enterprise is. It’s not just a repackaged charity. It’s something that goes a bit beyond that.
Social enterprises first came to the attention of the public around ten years ago. But they appeared to operate on a different model from pure charities. They didn’t rely exclusively on donations for their survival. Instead, they made their money and addressed their cause by selling products and branding. Some even made profits.
Social enterprises, at root, are organizations trying to do business in a way that minimizes external costs and maximizes social benefits. In other words, they turn the business world on its head, reversing the decades-long trend in which companies foist externalities on the community. It’s all about creating external benefits but reducing some of the excesses that we saw in the past. Profits are not the top priority.
Social Enterprises Prove That You Can Achieve Social Justice Through Voluntary Means
What’s interesting about all this is what it says about current economic thinking. The primary school of thought is that private enterprises will always seek profit at the community's expense. But one of the not for profit company benefits is that they don’t always do this. Instead, people voluntarily undertake enterprises that seek to enhance society and eliminate the traditional costs, such as pollution or worker injuries.
Thus, it changes the entire conversation. It is not just a case that human nature produces markets that the government needs to control. Some people care more about their personal values or community than they do profit. And this fundamentally undermines the claim by authorities that they need to impose regulations on businesses. A grassroots movement, such as social enterprises, shows that their thinking is flawed.
Why Social Enterprises Will Dominate
Many commentators suggest that we now live in a “post-scarcity” society. It sounds like a strange thing to say, but there’s mounting evidence that people’s primary concern is no longer the lack of goods, but the fulfillment of their values.
In an environment like this, social enterprises will bloom. These organizations are an outgrowth of various values that people hold, such as equality, justice, freedom, and community spirit. And the wealthier the society becomes, the more able they are to put these into practice.
Social enterprises will likely continue to dominate in the 2020s. A lot of entrepreneurs will give up their singular focus on profits. Instead, they’ll focus on plowing money back into reducing the costs that their businesses impose on others and increase the benefits.
