On the 15th day of December the year 2003, Dr. Abouleish of Egypt received the Right Livelihood Award for the best social entrepreneur that year. It was around this period that Africa and Asia were quickly embracing the concept of social entrepreneurship. Apparently, back then and even now, social entrepreneurship has not been assigned a precise definition. Even so, the goals of social entrepreneurship are similar across the nations. Unlike business entrepreneurship, social entrepreneurship is a revolution that is aimed at improving the quality of life as well as the socio-economic well being of the members of society (Sachs 26). While some scholars explain social entrepreneurship as the deliberate efforts of non-profit organizations to improve the social status of individuals in developing countries, others describe it as the collective activities of business concerns that constitute an organization’s corporate social responsibility. The role of social entrepreneurship on the growth and development of the economy has been crucial in the developing nations of Asia and Africa. This paper seeks to explain the predominant role of social entrepreneurship on the economic growth and development.
In the year 2000, a meeting, that was later to be described as the biggest event involving heads of state from both developed and developing countries, was held to discuss the way forward for the economy of the world. The convention came up with a proposed plan of what was referred to as the millennium declaration. The item was referred to as a plan because it only provided a comprehensive, sketchy framework which was to guide the various nations in attendance restructure their strategies towards the achievement of sustainable development. Economists argue that there is no fixed blueprint, which can be used by all nations, rich and poor, to achieve economic growth. As such, the international development goals could be attainable if the countries doctored their strategies according to their social environment. This is where social entrepreneurship comes in to the picture. Social entrepreneurship refers to the deliberate efforts to integrate, innovativeness, ingenuity and opportunity in an effort to eliminate problems that are rooted in such social problems as poverty, ignorance and disease.
Social entrepreneurship is a concept that involves the efforts of organizations and individuals that are, in most cases not profit oriented. The first means through which this concept can be linked to economic growth is that it empowers the members of society, who are the main resources behind production. Such empowerment can take the form of education. Many nongovernmental organizations have recognized the need for education as a way of boosting economic growth and development in the developing nations. As such, the organizations have established schools and technical training institutions that offer discounted or free education and fundamental instruction (Sachs 56). The education offered to the people in poor countries can enable the natives and residents in such a way that they can obtain white collar jobs, and set up their own enterprises.
The vocational training and education can enable individuals to occupy themselves through the establishment of some sort of businesses. Vocational training in the developing nations has enabled quite a number of people to establish such businesses as carpentry, mechanical repairs, tailoring et cetera. Once established, the individuals absorb and teach others. This way, the unemployment levels in a country drop down. Similarly, such vocational training and employment can possibly reduce dependency ratios in an economy. One of the biggest causes of poverty in third world nations according to a 2001 research is the dependence ratios. The research found out that an individual could be earning a substantial amount of money, but had too many dependants looking up to them for basic needs and educational requirements. By employing oneself and providing employment to others, the taxpaying group expands and so does the Gross Domestic Product.
Another mechanism through which the concept of social enterprise can contribute to economic growth and development is the provision of basic needs to the poor. In the developing nations, a good number of individuals live below the poverty line with some families surviving on a dollar per day. This is a clear indication that there are people that cannot provide basic human needs such as food and clothes. The social entrepreneurs can provide such needs as a way of motivating them to find a way out of the abject poverty. By providing people with the basic needs, the social entrepreneurs enable them to concentrate on such basic economic activities as farming and limited agricultural practices. When SEKEM, arguably the biggest social initiative in Africa established the concept of organic agriculture, it enabled the neighboring communities to obtain food cheaply and sometimes free of charge. As such, they became inspired and physically strengthened to work in the farms. Productivity improved, and ignorance was eradicated around the area as people become economically strong enough to afford education.
Social enterprise is concerned with the empowerment of women and minority groups. Social scientists argue that women are not only good at borrowing, but also effective in saving and investing. Most of the social entrepreneurs depend on this idea to empower the women economically. Such empowerment takes the form of loans designed for prospective female investors and small business owners. Such low-interest loans can be used by women to start small businesses from which such loans and accruing interest can be refunded. The empowering of women in a third world economy can possibly increase productivity and the amount of taxes paid. This is a positive move towards the increase in GDP of the country. Additionally, the money paid in taxes can be used to set up development projects such infrastructure, which is expected to boost economic growth and development.
One of the primary objectives of social enterprise is to change unhealthy traditions and all norms that cannot impact positively on economic development. The social enterprise is primarily concerned with the establishment of sustainable and continuous change. Acceptance to change is the first step towards economic development in any third world country. Change is normally introduced in such fields as gender equality with respect to exposure to opportunity. The eradication of such beliefs as the ones discouraging the participation of women in business and industry can be a significant step towards the realization of economic growth. Once the women are exposed to equal opportunities as men, the production of a country is expected to increase. High production within the borders of a country implies an increase in the Gross Domestic Product (GDP) which indicates the rate of economic expansion.
A number of scholars in the field of economics have argued that System D is necessary in as far as economic development s concerned. By description, System D is a network operating within the economy that entails transactions among merchants that are not registered or formally recognized by the government (Neuwirth 63). Such a system is informally referred to the black market and is primarily found in the back street areas and the dark alleys of the urban centers and cities. The people operating in System D are not registered and therefore do not pay government taxes and municipal obligations. Economists have argued that the system is prohibited since tax evasion is a criminal act. It is estimated that the off-book business is valued at approximately 15 trillion US Dollars. According to expert opinion, System D does contribute to economic growth, but at the same time holds back economic growth. Failure to pay taxes is harmful to the efforts of the government to improve the economic status of a country.
In conclusion, it is quite evident that economic development in the developing nations depends on the activities of the social entrepreneurs and other humanitarian partnerships. The essence of this argument is that the social entrepreneurs develop a suitable environment that is convenient for economic activity. For instance, it is not possible for an individual to work effectively in a war-torn country. As such, social entrepreneurs promote peace through campaigns and collaborative efforts between the government and the nonprofit organizations. Similarly, people cannot be effective when they cannot obtain food and other fundamental human needs. By providing food and other necessities, the social entrepreneurs improve the physical capacity of the people. Through such things as financial assistance and provision of resources, the entrepreneurs empower the minority groups. As such, the production levels of the country go up, and so does the Gross Domestic Product.
Neuwirth, Robert. Stealth of nations: the global rise of informal economy. New York: anchor books. 2012. Print
Sachs, Jeffrey. The end of poverty: how we can make it happen in our lifetime. New York: penguin books ltd. 2011. Print