The Stanford Graduate School of Business recently announced that, with a $150 million donation, it will launch a new institute that will help alleviate poverty. Called the “Institute for Innovation in Developing Economies,” its aim is to develop research that can help business leaders innovate products and services that will build infrastructure and economic growth, which, according to the school’s website, will help relieve poverty in developing countries.
While relieving poverty may seem like a lofty goal, it might also be based on good business sense. Globalization and increased economic activity in developing countries have created and expanded markets for international business in ways that will play out for years to come. For example, a recent population report released by Goldman Sachs speculated that, because of explosive growth and continuing development in China, the Chinese middle class may be four times as large as America’s by 2030, and will undoubtedly represent a huge business market. It would be logical to assume that efforts to minimize or alleviate poverty elsewhere could generate a whole new class of consumers and associated business opportunities.
Social entrepreneurship is an increasingly popular focus for MBA students, but what exactly does the term mean? We spoke to Pamela Hartigan, director of the Skoll Centre for Social Entrepreneurship at the University of Oxford’s Saïd Business School.
Can you briefly define social entrepreneurship?
Social entrepreneurship is entrepreneurship that fuses innovation, resourcefulness, and opportunity to create new systems or practices – or improve on those that exist – that instead of being focused on just making a profit are focused on transforming society in a positive way.
How does that differ from the work of charities? Social entrepreneurship defines an approach; it’s not a legal structure. You can be a social entrepreneur who is focused on creating change through a non-profit, or through a for-profit structure.
People get caught up in this idea whether it’s a charity or not; it is independent of charity. And in fact, to make it sustainable, it should not be a charity. But it really is not about the legal structure, and that’s the main message here: it’s about an approach to how to create innovation in a way that changes systems and practices.