May 30, 2018

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Can Social Enterprises Deliver High Quality Social Solutions?

March 19, 2018


I came across a thought-provoking article on SSIR - "Social Enterprise is Not Social Change" - in which the authors argued against social enterprise and social entrepreneurship (SEE) as the alternative to public policy, based on:

* scale concerns - the ineffectiveness of SEEs to address major social problems;

* lack of rigour and empirical evidence; and ultimately 

* the undermining of government, and in some cases an unwelcome distraction in capital focus.


To some extent, this argument boils down to the fundamental question of whether markets can provide sufficient or superior solutions to all problems, and a timely challenge on the global "worshipping" of capitalism and entrepreneurship. This is an important question to ask. That said, pitting the argument into black & white terms of SEE vs government is, in my opinion, slightly pedantic.


The authors compare the private vs public policy approach into one that attempts to address knowledge problems vs power ones. Practically speaking, this may be both incorrect and also costly to prove - e.g. the early issues with the Gates Foundation's Education Programme prove that adopting a private sector approach to public issues may not always improve outcomes. 


That said, what this argument under appreciates is the value of risk-sharing. If we can agree that there are both knowledge and power problems - i.e. there is a need for both technical innovation to improve market outcomes for all, but there are also power imbalances that must be addressed through collective action and social change - then the ideal scenario should involve collaboration, rather than cannibalisation, between SEE and public policy. 


Indeed, the major advantage of SEE in practical terms may be one of risk-sharing. SEE may not be scaleable, but the agility of such smaller companies may be better suited to greater risk-taking for innovative solutions. The need for the government to uphold much higher levels of rigour, oversight and public accountability is precisely why an SEE approach may complement as a breeding ground for pilot programmes and community projects. 


Ultimately, efficiency and productivity may not be the answer to everything - yet the ability to move forward and further social development is the goal, and one that requires work from all stakeholders. The willingness to work together is what drives social change. 

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