Social entrepreneurship and why it matters?
This knowledge tile provides a basic introduction to the principles and practice of social entrepreneurship. It begins with a definition of social entrepreneurship and an exploration of its growing importance in the context of global challenges and the Sustainable Development Goals (SDGs). The content distinguishes between social entrepreneurship and traditional business models, emphasising its unique, purpose-driven approach.
Are you a (future) social entrepreneur?
Do you want to start or grow a business that addresses social or environmental issues - and is not just focused on profit? Are you driven by a social mission, but also think like an entrepreneur? If so, you may already be active as a social entrepreneur, or on your way to becoming one. On this page, you will find a brief introduction.
What is social entrepreneurship?
Social entrepreneurship is the innovative search for solutions to social, environmental and economic challenges. It involves applying entrepreneurial principles, not only to generate profit, but above all to create meaningful and sustainable social value.
Core definition: According to Mair & Marti (2006), social entrepreneurship is:
"The process of identifying, evaluating and exploiting opportunities to create social value, which can take place within or across the non-profit, commercial and public sectors."
It is about applying entrepreneurial thinking to social change, bringing together the following elements:
- Innovation
- Resourcefulness
- Recognising opportunities
- Mission-driven action
Key features
Social entrepreneurship is characterised by a number of key aspects that distinguish it from traditional business models. It focuses fundamentally on solving real problems: social, environmental and economic challenges that require more than just market efficiency or policy changes. Social enterprises can take various organisational forms, including commercial companies, non-profits and hybrid public-private partnerships. Regardless of their structure, they prioritise social and environmental impact over mere income generation and are often rooted in community engagement, empowerment and co-creation.
Why is social entrepreneurship important?
The urgency and relevance of social entrepreneurship have increased as global priorities shift towards sustainability, equality and tackling the Wicked Problems of our time: complex, interconnected challenges such as climate change, inequality and resource scarcity, which require innovative, collaborative solutions. Within the framework of the United Nations 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs) it has become increasingly clear that governments alone cannot bring about the systemic change that is needed. The private sector is now expected to be a co-driver of social progress, aligning business goals with global sustainability ambitions. Read more...
Consumers and investors are demanding greater transparency, ethical leadership and purposeful business practices. As the business landscape continues to change, the investment community is increasingly urging companies to embrace responsible strategies that measure success not only through financial returns, but also through social and environmental impact – known as Triple Bottom Line of people, planet and profit.
This evolution is driving a wave of social innovation, cross-sector collaboration and greater accountability through impact measurement. Social entrepreneurship is not only redefining how we do business – it is reshaping the role of enterprises in building a more sustainable, inclusive and resilient future.
Social entrepreneurship
Social entrepreneurship
Social entrepreneurship differs from traditional entrepreneurship in its primary goal: maximising social impact rather than shareholder value. While traditional companies see profit as the ultimate goal, social enterprises regard profit as a means to achieve their mission, with success being measured in terms of both financial returns and social outcomes (SROI).
These companies often take Hybrid forms such as B Corps or revenue-generating non-profits, which combine business discipline with mission-driven values. They operate on a spectrum from traditional non-profits to socially responsible commercial enterprises and seek to balance mission and margin, often within complex stakeholder expectations and legal frameworks.
Despite these challenges, they play a transformative role by filling gaps left by governments and NGOs, scaling up solutions for disadvantaged communities, strengthening local actors, and influencing broader systemic changes towards an inclusive and sustainable future.
- Filling gaps left by governments and NGOs
- Scaling up innovations that serve disadvantaged groups, focused on social value
- Strengthening communities to create solutions together
- Influencing policy through grassroots impact
Conclusion
Social entrepreneurship offers a powerful, flexible and forward-looking approach to solving today's toughest challenges. As societies face increasingly complex problems, we need innovators, change-makers and entrepreneurs who are driven not only by opportunity, but by a mission.
Social entrepreneurship is not just a movement. It is a necessary evolution in how we think about business, leadership and sustainable global progress.
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References
Sources
- Gandhi, T., Raina, R. 2018. Social entrepreneurship: the need, relevance, facets and constraints. Journal of Global Entrepreneurship Research 8:9.
- Haigh, N., & Hoffman, A. J. (2014a). The new Heretics: hybrid organisations and the challenges they present to corporate sustainability. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2932327
- Mair, J., & Martí, I. (2005). Social entrepreneurship research: A source of explanation, prediction, and delight. Journal of World Business, 41(1), 36–44. https://doi.org/10.1016/j.jwb.2005.09.002
- Santos, F., Pache, A.-C., & Birkholz, C. 2015. Making Hybrids Work: California Management Review, 57(3): 36–59.
Websites
The Global Goals. (n.d.). Resources. www.golablgoals.org/resources