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Social Entrepreneurship And MBAs Are Shaping A New World

Social entrepreneurship is sweeping its way across the business school world. This generation of MBAs want to challenge the status quo and solve the world's problems – through start-ups.

Wed Apr 2 2014

Pamela Hartigan shook her head as she clasped either side of the podium. Away from the excitement of centre stage of the Institute for Social Innovation, at an annual entrepreneurship conference in Barcelona, a frank assessment is issued to MBA hopefuls.

Pamela, the director behind the Skoll Centre for Social Entrepreneurship at Saïd Business School, had come to discuss the social entrepreneurship movement that has taken the business school world by storm – but for a few fleeting moments she recalled her MBAs’ frustrations.

It had started with her issuing a frank assessment to her students at Oxford and Colombia.

“You don’t learn to be an entrepreneur in an MBA program,” Pamela deadpanned, putting down her notes and raising an arm. “Entrepreneurs don’t do MBAs.”

She looked back at the projection screen, scanning images. “By the most part, they drop out of school, they don’t come to school,” she shrugged. “But you will be absolutely essential in helping those entrepreneurs implement their vision. And that is really what our focus is on.”

Pamela’s main interest is social entrepreneurship – or a differing definition. Last year, nearly 27 per cent of MBA applicants wanted to start their own business ventures and that trend is popular among recent MBA graduates too.

Courses at top U.S schools that include social benefit content increased by 110 per cent between 2003 and 2009, while those schools now offer double the amount of non-profit management courses than in 2003.

The apparent never-ending upward spiral of social entrepreneurship and innovation at business schools has prompted many to up their efforts.

The Skoll Centre for Social Entrepreneurship was founded in 2003 with a reported £4 million investment by the Skoll Foundation’s Jeff Skoll, the founding president of Ebay – the largest such fund of its kind at the time.

Each year, the centre provides a bevy of MBA scholarships to highly impressive candidates – Skoll Skollars – who plan to pursue entrepreneurial solutions for urgent social and environmental challenges.

Spain’s ESADE Business School has its Institute for Social Innovation, which seeks to develop skills within the business community to strengthen companies’ contributions to a more sustainable world. The institute provides content on social innovation for ESADE MBA and EMBA students.

The initial wave of social entrepreneurship seduced many with the notion that social entrepreneurs were heroes who would change the world.

But there are worries that the definition is problematic. Some have also suggested the practice has been thrust upon today’s MBAs, many of whom see their futures elsewhere.

But Pamela’s confidence remains undimmed: “I’m certainly not denying that these individuals are exceptional. They’ve identified opportunities where others saw only problems and persisted in pursuing an endeavour that, for most of us, would be too far out to try.”

She is not the only one to notice. Every spring, MBAs flock to ESADE’s Avinguda d'Esplugues campus to hear from leading entrepreneurs, venture philanthropists and network over lunch.

Much of this year’s talk was dominated by the changing face of the social entrepreneur, fuelled by a rapid rise in more ethical and responsible business solutions to the world’s problems. There are thought to be 68,000 social enterprises in Britain alone. But that is a meagre figure when compared to the 500,000 new businesses that registered in the UK last year.

For all the increase in educating the next generation in social entrepreneurship, only about one in ten MBA graduates are now becoming entrepreneurs. And the majority of them are entering the tech sector.

Pamela’s setting in Barcelona is a piquant comment on the argument that commercialism dominates the business world. A few miles away from ESADE, Banco Santander, Inditex, the clothing giant, and Almirall, one of Spain's largest pharmaceutical companies, set the business scene in the city.

In comparison to the commercial sector, she admits the support for the birth and growth of social ventures is “really in its infancy”.

But MBAs have been lured in by the prospect of innovation, real change and challenging the status quo.

Business schools respond by providing an education – it’s up to the students to take the leap. “Unlike older generations, they don’t want to wait until they’re 50 to give back,” says Pamela. “They want to start now. They want to do away with that traditional fragmentation that has separated where we make money and where we do good.”

Surrounded by an “army” of talented students from around the world, she thinks today’s MBAs are ready to re-think business and government for the 21st century.

Those in the MBA education world think that MBAs can make a significant difference in the world. The dream is to tackle some of the world’s most pressing challenges, even if that seems like an Everest to climb.

“[There is] violence and other types of conflicts, there are a lot of things that we have to try and solve,” says Ignasi Carreras, director of the Institute for Social Innovation at ESADE. He continued: “Inequalities, a lot of poverty… and there are a lot of differences between rich and poor people… we need different answers from different organizations.”

Pamela’s assessment is similar: “They form part of that great citizen’s movement that has emerged and is trying desperately to change the status quo. These new approaches are the harbingers of the times of organizational and business models that our compartmentalized world so desperately needs.”

Although the strengthening of the social entrepreneur is evident, the definition is loose. Many people can be “entrepreneuring” in all careers. There has been a shift from the hero-preneur to intrepreneurship, the latter within well-established corporations that adopt good social business practice.

Big corporations are fast adopting sustainable practices and old stereotypes are abandoned. There is a blurring of the lines between the social entrepreneur – considered the good guy – and commercial activity, which is often lambasted as the opposite.

“And it implies that making money is something we should not be proud of, when making money is really great. It’s what you do with it that counts,” says Pamela.

But there is also concern around social innovation and social enterprise. Innovators often seize upon an already-established idea and improve it; entrepreneurs are often the original thinkers, Pamela notes.

There is a similar confusion between social enterprise and the practice of entrepreneurship. Governments are increasingly happy to fund what they consider social enterprises, and in some cases they are sub-contractors for the delivery of services. They assuage persistent problems such as homelessness and unemployment, but lack disruption.

“Now, social enterprise refers to an organization. It’s not an approach. But social entrepreneurship is about [disruption],” says Pamela. “Entrepreneurship really entails attacking the root causes of the problem.” She continued: “For me, there is a difference between social entrepreneurship [and] social enterprise.”

Amid the debate, scores of MBAs are pooling their efforts into tackling social problems. For the past two years, Justin Garrido has been running a social enterprise, Social Project.PH.

He founded the for-profit organization after completing an MBA at Melbourne Business School and has been developing housing solutions for the survivors of Typhoon Haiyan in the Philippines.

“Seeing the vast social challenges, like poverty, really struck me hard. There is a greater discrepancy between rich and poor,” said Justin, who finished his full-time MBA two years ago.

“But I saw tremendous opportunities and I was inspired by the Filipino social enterprises, which were doing amazing things and empowering the poor as partners.”

The evolving role of the corporate sector is providing a broader remit for social entrepreneurship. The hope is that solving the world’s biggest problems, profitably, becomes businesses’ core pursuit.

Business schools are confident that they are providing a platform for the next generation. Pamela, who is also a founding partner of Volans, an organization which develops partnerships with corporations and social enterprises, shares the optimism.

“Social entrepreneurship is an approach rather than a specialized field. It’s paving the way towards a much larger transformation of capitalism… where the creation of positive social change will be the key to success,” she concluded.  

“You might want to get an A for effort, but that doesn’t make you an entrepreneur. Entrepreneurship is not just about coming up with the idea – that’s the easy part. It’s about transformational value-creation and capture.”