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Social Entrepreneurship: Development, Role and Challenges

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Social phenomena among society are very interesting if discussed in a scientific scope because there are still many social disparities. Social inequality is described as differences in conditions that occur among society. This means that there are two social conditions in society which are characterized by the presence of groups with adequate resources, and conversely, there are still people who live in conditions where human resources are unfavourable. In line with that, Blackburn (2008) said that one thing that is consistent with social inequality is the difference between disadvantaged and advantaged groups, where the level of benefits obtained between groups varies. This is the main point because the true social welfare of society will occur when social gaps are successfully closed or overcome. Talking about this condition raises the question of what is causing social inequality to widen. There are many factors driving social inequality such as income, education, status and so on (Blackburn, 2008). Referring to this condition, strategic steps are needed to minimize social inequality so that it becomes smaller periodically.

One effort that can be made to deal with conditions of social inequality is by presenting social entrepreneurship organizations. Social entrepreneurship is an activity carried out by individuals or organizations whose main mission is to achieve social or environmental goals, by considering the interests of all stakeholders and presenting entrepreneurial characteristics. This means that revenues, innovative approaches and use of potential will benefit the stakeholder community. Social entrepreneurship is related to the skills, mindset and business tools that understand social problems, closeness to specific beneficiaries in the private, public and third sectors, the desire to advance public interests, welfare and social equality. Social entrepreneurship aims to help and empower communities in solving social and environmental problems that cannot be overcome by traditional sectors, due to a lack of knowledge, resources, and are unintentionally exacerbated by their behavior and policies (Collavo, 2023).

In Indonesia, social entrepreneurship is increasing and continues to grow from time to time. The presence of social entrepreneurship among society is due to awareness of accelerating social change while protecting the environment. Data from British Council Research quoted by Databoks shows that the proliferation of social entrepreneurship in 2018 reached 342 thousand. The sectors with the highest percentage are creative industries at 22%, agriculture and fisheries at 16%, and education at 15%. Another contribution can be seen from the income value of Rp. 1,324 trillion or contributed 1.9% to GDP. Apart from that, social entrepreneurship which is mostly led by young people aged 25-34 years is successful (Santika, 2023). The increase in social entrepreneurship means that social organizations can compete with commercial organizations to build empowered communities. Not only that, social entrepreneurship also indirectly makes a real contribution to state income. With the contribution made, carrying out social entrepreneurship must receive consistent support from the community, government and donor agencies, to experience sustainability.

Sustainable social entrepreneurship focuses on supporting life, pursuing opportunities, and preserving nature to produce future products, processes, and services to gain non-economic benefits (Singh, 2021). Implementation of social entrepreneurship can be done by running a social enterprise. Social enterprises are social entrepreneurial organizations that wish to engage in entrepreneurial activities for social purposes. The characteristics of social entrepreneurship include a business approach that is (a) double or even triple (environmental) structure; (2) locally embedded in society; (3) addressing a diversity of social problems; (4) flexible organizational structure (Weaver, 2023), which will be described as follows:

  1. The dual bottom-line and triple bottom-line approaches, or known as "dual bottom-line", illustrate that social entrepreneurship has a social mission (good quality of life in society) and an economic one (personal profit). Social missions focus on providing services, products, or organizational development. In other words, identification and steps are needed to reduce the roots of social problems so that they are beneficial to society. The economic mission involves generating income in an effort to sustain the social enterprise. This means that social entrepreneurship aims to generate income to finance social programs and interests. The "triple bottom-line" approach focuses on three aspects, namely people, planet and profit.
  2. Embedded locally in society. The establishment of social enterprises is considered a response to the difficulties of local communities. Running a social enterprise at the local level is often a strategic decision to facilitate and create reciprocal relationships between communities. The advantage gained when running a social enterprise at the local level is that you can recruit and look for local volunteers.
  3. Overcoming a variety of social problems, describing social entrepreneurial efforts in overcoming various social problems such as unemployment, environmental pollution, food waste, poverty, and so on. Social entrepreneurs can create employment opportunities by recruiting vulnerable groups such as the homeless, the poor, those with low education and others. This recruitment increases skills, independence, development, and social capital.
  4. Flexible organizational structure, social enterprises can be non-profit, business and hybrid organizations. This means that having an organizational and legal form makes social entrepreneurs operate according to strategic decisions. A hybrid model can help social entrepreneurs utilize both forms of law. Where non-profit businesses help in generating income from unlimited sources.

Efforts to build or establish a social enterprise cannot be separated from the role played. This also applies to organizations with a social entrepreneurial approach. Roles that describe social entrepreneurship through social enterprise include efforts to solve social problems, fulfil social needs, and establish social value for society (Singh, 2021). This shows that the implementation of the role of social entrepreneurship is needed considering the catalyst conditions for the presence of social problems such as poverty, environmental challenges, lack of knowledge, and so on. Even though you have a good focus, running a social enterprise is not as easy as you imagine, because you still experience challenges to be sustainable. Singh (2021) said that the challenge most felt by social entrepreneurship to remain sustainable is related to funding. Many organizations engaged in social entrepreneurship are trapped in dependence on donors. This condition places pressure on social enterprise organizations because they must work according to the needs and desires of donor agencies. As a result, it also encourages changes in social entrepreneurial organizations to change their strategies (Singh, 2021). This situation must be understood as an important condition as an alarm so that every social entrepreneur does not lose sight of its initial goals and mission. For example, running other alternative social enterprises to find reserve funds for running a social enterprise.

-Rosmalia Ahmad & Diana Anggraeni

 

References

Blackburn, R. M. (2008). What is Social Inequality? International Journal of Sociology and Social Policy, 28(7/8), 250–259. https://doi.org/10.1108/01443330810890664

Collavo, T. (2023). Foundations of Social Entrepreneurship: Theory, Practical Tools and Skills. Routledge.

Santika, E. F. (2023). Estimasi Pendapatan Wirausaha Sosial per Tahun (2018). Databoks.Katadata.Co.Id. https://databoks.katadata.co.id/datapublish/2023/10/15/wirausaha-sosial-indonesia-semakin-menjamur-bagaimana-pendapatannya

Singh, A. (2021). Social Entrepreneurship and Sustainable Development: Emerging Research Issues. In A. Singh & E. M. Reji (Eds.), Social Entrepreneurship and Sustainable Development. Routledge.

Weaver, R. L. (2023). Social Entrepreneurship: A Practical Introduction. Routledge.

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