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A Case for Social Entrepreneurship in the Face of the Sustainability Threat

Humanity, The Devils, Contract and Our Redemption

How little has humanity learnt from the old tale of the “Faustian bargain” in which Dr Faustus, a man who bargained with the devil to sells his soul for short term pleasures and gains, only to lose that very soul in the end? Since the advent of the industrial revolution, mankind has been in his own Faustian negotiation: bargaining the future resources of the world, through capitalism, in contracts with his own greed. This article serves as a reminder of how the aggressive pursuit of profits through capitalism has set mankind on a self-destructive path, leading to the sustainability risk we currently face. The article also submits that a complete overhaul of current business models is an urgent imperative to maintain the balance between growing economies, increasing population a finite biosphere.

With the advent of the industrial revolution in the 16th century, the world saw unprecedented economic growth and innovation which led to an increase in firm and individual incomes and economic value for firms, leading to positive individual outcomes including increased education, health outcomes and life expectancies. While these developments might seem positive, with industrial revolution also came social and environmental challenges including income distribution inequalities and continued degradation and pollution of the environment. It seems in our pursuit for profit and industrial growth, humankind had sacrificed social equality and the environment. In the current age, world poverty levels remain unacceptably high and environmental degradation has become today’s long-term risk.

In his recent speech on the sustainability risk the world faces, Yvon Chounaid, the founder and head of Patagonia, a global American outdoors clothing store, made a call for business to rethink its business model: “You’ve got to reinvent capitalism altogether. It leads to a whole bunch of poor people and a few extremely rich people. Ultimately, capitalism is going to lose its customers. There won’t be anybody to buy the product because everybody is going to be so poor”. Incumbent businesses as creators of wealth and user of the worlds resources sits in a position in which they are able to contribute to the sustainability project that the world has embarked, but a bigger opportunity for this project lies in a new type of business, the social enterprise.

A growing body of global evidence points to the fact that social enterprises are making an impact on social and environmental issues while accumulating economic value using principals that are underpinned by concepts of Shared Value. While there is very little data on how many social enterprises have proliferated in the world in the past decades, there is growing evidence of how this business format, the social enterprise, has impacted social and environmental issues at country levels. In their report, The Hidden Revolution, Social Enterprise UK asserts that there are over 100 000 social enterprises in the UK, employing over two million people and contributing over £60 billion to the GDP.

While trends of growth can be seen in other global geographies, South Africa is still lagging behind in the adoption of social entrepreneurship. The Global Entrepreneurship Monitor finds that less than 2% of adults are involved in social entrepreneurship activity in South Africa. Although South Africa is structurally similar to other countries in which social entrepreneurship flourishes in the sense that it is a highly industrialised middle-income country with high inequality and youth unemployment, its percentage of social entrepreneurs is well below international averages. This suggests significant potential to encourage social entrepreneurs by strengthening the support systems they need to start and run these important organisations.

The world faces a sustainability risk and social entrepreneurship that is underpinned on Shared Value concepts offers an opportunity to solve social issues while generating economic value.

Guest contributor Owen Muzambi is the Director of Driven Advisory, a social enterprise that offers development advisory and programme implementation services for entrepreneurs.