In the past decade, social entrepreneurship has emerged as a critical force in addressing pressing socio-ecological issues. However, solving these problems whilst maintaining self-sustainability has been a challenge for many. In this NBS Knowledge Lab webinar, organised in partnership with NTU Entrepreneurship Academy (NTUpreneur), our panellists presented state-of-the-art methodologies and real-life case studies to equip you with practical knowledge on understanding and navigating the complex dynamics of social entrepreneurship.
The panellists were Mr Ted Chen, Co-founder and CEO of Evercomm Singapore and Ms Ivy Wu, Co-founder and CMO of Formfty Singapore. The session was moderated by Dr Xia Zhiqiang, Academic Director and Postgraduate & Undergraduate Programmes Lead at the NTU Entrepreneurship Academy (NTUpreneur).
The following is an edited transcript, with some key takeaways:
Mr Ted Chen on embarking on social entrepreneurship
A social entrepreneur is fundamentally different from a traditional entrepreneur, with a primary focus on addressing community-based problems. Success is measured not only by pure financial indicators but also by the positive societal impact an initiative achieves. The potential to thrive as a company while benefiting the environment, especially in the Asia Pacific region, stems from its current lack of progress toward sustainability development goals. Given the urgency of these goals and the attention they garner from countries and business leaders, social entrepreneurs have ample opportunities to bridge the gap between doing good and doing well.
I encourage anyone who is interested in social entrepreneurship to familiarise themselves with the United Nations Sustainable Development Goals (SDG) report because the SDG report tells each country the areas that they are struggling in. Entrepreneurs who focus on solving those problems will find it easier to mobilise resources and raise awareness. Dealing with social challenges are complex problems. These are unlike engineering problems, for instance, that can be solved by assembling a team of experts. To approach social entrepreneurship, one needs to understand how to handle complex systems. In complex systems, one can only manage, not solve. Social entrepreneurs need to find the best place to position the problem to make it easier to involve people, mobilise resources, and so on. The problem may not be solved but the firm can at least channel and attract more resources to make progress. Social issues cannot be solved in a short time. Thus, social entrepreneurship should focus on making progress, rather than solving the issue. It is important to start with problem construction: What is the problem? Why does it matter? Who does it matter to? What will the problem look like when it's solved?
As social entrepreneurs, it is very important to identify the problem through an iterative process, using the above questions. Pick one area that firms feel they can actually do something about. For example, in terms of mobilising resources to manage the issue, firms need to think about the following: Do you have the authority in this place? Do you have the support from the authority in this place to do something? Do you have the community’s acceptance? Does your team have the ability to help resolve this issue? It is important for social entrepreneurs to identify the areas where they have a good overlap of authority, abilities, and acceptance in order to actually make a difference.
Ms Ivy Wu on solving complex social entrepreneurship problems
The Problem Driven Iterative Adaptation (PDIA) approach is very useful for solving complex problems. Like Mr Chen, I will also focus on the importance of the first step: constructing your problem. Social entrepreneurs should not approach a problem with a pre-packaged solution already in mind because that would restrict one from other options and alternatives. I have shared two case studies (more details can be found in the video) that proved how success in social entrepreneurship requires looking beyond the obvious, towards more creative solutions. Reiteration is the key to constructing problems; even after constructing their problems, social entrepreneurs need to keep asking why the problem matters. Each time this question is asked, the firms should delve deeper and deeper into the issue to consider the impact of their solution(s).
Raising start-up funds during the economic downturn
In response to a question on raising funds, the panellists said that in their experience, investors will continue to invest in well-defined social entrepreneurship regardless of an economic downturn because investors who invest in social entrepreneurships are usually not dependent on the financial returns for these projects. In fact, it may actually be easier to mobilise funds during an economic downturn because that is the time when the community needs help most. In addition, during an economic downturn, many factories and manufacturers have less demand from the global market. As such, they will be looking to bring more innovative products into the market. Finding the right angle with these big factories and/or traditional industries when they are seeking transformation may be a way to build one’s business with them, together.
Effects of greenwashing
Due to the wave of greenwashing, people tend to be more sceptical about businesses doing good. Consequently, customers and investors are asking more critical questions about companies claiming to be doing good, which means investors are looking more carefully at the projects they are financing. Although the general economic downturn is causing traditional investors to be a bit more stringent with their investments, there are, as mentioned, also more strategic investors who are actively looking for projects to support because more communities need help.
Social entrepreneurship and high profitability
With regards to a question on whether social entrepreneurships should pursue high profitability, the panellists pointed out that firms need to spend a lot on products and services, on the community, etc. As such, profit is needed for firms to function. It depends on how a firm sees itself in the business—as a business making a lot of profit or creating huge social impact? In fact, the panellists suggested that high profitability may be beneficial to the community, especially if the firm reinvests its profit into solving community problems. A way for firms to deal with this would be good disclosure; a firm with high profitability can show customers and investors how it is reinvesting its profit. Ultimately, social entrepreneurship is related to sustainability, and high profitability will help sustain, scale up, and invite continuous investment into the business.
Both panellists agreed that it is possible for social entrepreneurs to simultaneously do good for society and do well for the company’s financial stakeholders. For this to work, individuals need to change their mindsets from traditional entrepreneurships. Success in social entrepreneurship is not just measured by financial earnings but also by its benefits and positive impact to society. In addition, social entrepreneurs need to be aware that the complex social problems that they tackle are unlikely to be completely solved in the short term. Instead, what the social entrepreneur can do is to direct resources to these issues to help make progress. Importantly, entrepreneurs planning on tackling community-based problems should keep in mind the importance of problem construction. Repeatedly clarifying why the problem matters and why it should be tackled will help social entrepreneurs get to the core of the issue as well as open them up to alternative and creative solutions.
Watch the webinar here: