5 reasons social entrepreneurship is so important

Posted on Posted in Blog, Social Impact, Uncategorized

Social entrepreneurs create businesses that solve social, cultural and environmental problems. When it comes to social indicators, social entrepreneurship provides a better framework than a pure capitalist or a charity approach. This is due to its ability to generate profit and stay financially viable while delivering social solutions.

Social Entrepreneurship has been there for quite long in one form or the other. However, it got a distinct identity when Muhammad Yunus won the Nobel Peace Prize in 2008 for his efforts in micro financing.

Today, when the world is grappling with major social challenges such as poverty, crime, drug addiction, human trafficking, lack of healthcare and education, there is nothing nobler than the concept of social entrepreneurship.


Here are 5 reasons why we should invest socially:

1) A more equitable Society

Muhammad Yunus’s Gramin Bank made it easier for disadvantaged women to access micro-credit and start their businesses, thus, making the women self-dependent. Similarly, an American Social entrepreneur, J.B. Schramm has enabled thousands of low-income high school students to complete their tertiary education.

Social entrepreneurship can help people in many ways which will reduce the huge gap that exists between haves and have-nots, making the society more equitable. An equal society will reduce crime rates and other social issues, making the world a better place to live.

         2) Rise in Employment

The social entrepreneurs, through their businesses, create employment opportunities for disadvantaged people such as the disabled, unskilled or semi-skilled, people with long unemployment history, etc. Regular businesses usually don’t employ such people in large numbers. Thus, their lives can only be improved through social enterprises. Grameen Bank has improved lives of almost six million disadvantaged women. And according to certain estimates, the social sector employs around 6-7% of the total workforce.

3) The rise of Social Capital

Social entrepreneurship creates huge social capital thus providing a strong ground for overall economic development in the long run.

Social Capital is the resource which is linked to the long-term relationship between people which is developed due to mutual recognition and acquaintances. The World Bank identifies Social Capital as a significant means to alleviate poverty and achieve overall economic development of the society. For example, Japanese and German economies have thrived on ethical values, cooperation and long-term relationship between people. Social capital was critical for their industrial and economic development.

      4)  A place for Innovation

Innovation is at the core of social entrepreneurship. Social businesses develop innovative products and services which solve crucial societal issues such as poverty, crime, HIV, illiteracy, etc. The innovation can be led by governments and the private sector. A famous example of this is a social enterprise developed by Veronica Khosa, a social entrepreneur from Brazil, who created an innovative home care solution for AIDS patients. The success of this model finally led to change in the government’s health policy in Brazil. Thus, improving the lives of millions of Brazilians.


Social entrepreneurship may not be the cure for all social problems. However, it is a positive force that can bring a significant change in the overall social and economic development of the world. The countries which are facing financial crunch can encourage social entrepreneurship as a special vehicle to tackle societal issues effectively.