As the first Internet stock bubble neared its popping point in 1999, IBM chief executive Lou Gerstner famously dismissed the dot-com start-ups of his day as “fireflies before the storm—all stirred up, throwing off sparks.” The Internet would truly achieve its disruptive potential, Gerstner argued, when thousands of big institutions around the world started using the new communication and technology platform to transform themselves. He was right. Although many of the dot-com players did not survive the 2000 market crash in technology stocks, they were indeed harbingers of a coming business revolution.
Nearly 15 years later, we see a new set of fireflies before a different storm. This time, an explosion of creativity in social entrepreneurship has unfolded against the backdrop of a crisis in global capitalism. Barely half of Americans polled in 2010 by GlobeScan said they believed in the free-market system, down from 80 percent in 2002. A large majority had lost trust in government. The most recent Edelman Trust Barometer found that trust in business has been below 50 percent for 8 of the past 12 years. Throughout Europe, only small minorities said they believed in free-market capitalism.
Meanwhile, social entrepreneurs are developing innovative business models that blend traditional capitalism with solutions that address the long-term needs of our planet. They are tackling chronic social problems, ranging from healthcare delivery in sub-Saharan Africa to agricultural transformation in East Asia and public-school funding in the United States. Social entrepreneurs are working in close collaboration with local communities, incubating groundbreaking (and often lifesaving) innovations; modeling synergistic partnerships with governments, companies, and traditional charities; and building business models that deploy technology and enable networking to create wins for investors and clients alike. “Social entrepreneurs are mad scientists in the lab,” says Pamela Hartigan, director of the Skoll Centre for Social Entrepreneurship at Oxford University. “They’re harbingers of new ways of doing business.”
Social ventures that create new value chains while generating profit in
pursuit of social goals are a direct challenge to Milton Friedman’s
dictum that the social purpose of a business is to generate profit for
its shareholders. With public cynicism about business at record levels,
we may well see more organizations following their lead.
Read more: The Rise of Social Entrepreneurship Suggests a Possible Future for Global Capitalism - Forbes
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