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Career Success
MAR 26, 2010

Social Entrepreneur vs. Entrepreneur

By Yoshito Hori

Tweeting has heightened my desire to bring my ideas together as an opinion. But that’s hard to do in 140 words. So I’ve decided to tweet the seed of a discussion on Twitter, and then bring it out in full on the blog. Here are two such tweets.

“A really fundamental question: Why do some Japanese companies set themselves apart as ‘social entrepreneurs’ when companies are essentially created for the purpose of contributing to society? When a company becomes a corporation do people start regarding it as a business that “only pursues profits” and doesn’t think about contributing to society? I feel that this segregation creates discrimination and superiority/inferiority.”

“I founded Globis at a time when there was no such thing as an NPO, so I took the corporate form. Two years ago, we have changed our business model into a a school corporation. But I haven’t changed the way I think. That’s because I initially started with the sole intention of training excellent human resources. Does that make me a social entrepreneur? Or am I just an entrepreneur?”

I’ve always felt there was something really strange in the word “social entrepreneur” from the time I first heard about it. I had been wondering all the time about what exactly was strange, and now that I finally acknowledged it the other day, I’d like to share my findings with you. My view may overlap with the above tweet, but it can be summarized as follows.

(1) Why do we use the term “social entrepreneur” when most Japanese companies are essentially founded on the premise of contributing to the society? The concept of social entrepreneur basically came from the Western culture. Japan has pursued a notion of “contributing to society through business” since the days of Eiichi Shibusawa. In case where there is a difference between the Western the Japanese-styles of business, I don’t think we should simply import from the West.

On the other hand, by distinguishing between a social entrepreneur and an entrepreneur, we create discrimination and superiority/inferiority. 
I felt strange hearing some people say , “I’m a social entrepreneur, so I don’t work for profits.”, but then the same persons getting offended when others called him a “social entrepreneur”. It essentially the same regardless of whether you make your bag in Bangladesh or in China. There’s really no difference in offering education as a corporation or as a school corporation.

(2) The Japanese virtue is that of being humble. When you’ve done something good, you don’t say much about it in public. You commit yourself to work but you don’t talk much about it, staying humble and saying, “I haven’t done much.” That is our virtue.

But then we have these people who say, “I’m a social entrepreneur,” effectively advocating the fact that they alone are doing good, which is a strange thing for me. Whenever I hear this, I think, “So you’re saying corporations don’t do any good to the society?”

(3) I was also bothered by the fact that most social entrepreneurs had a business model that was small in scale and that assumed volunteer work or low wages. In other words, most of these business models rely on the comparatively low wages and volunteer work as compensation for making you feel you are doing something good for the society. A company won’t last long like this and it cannot make a huge impact on society in a positive sense. If it really wanted to do good for the society, I’d think that it should be doing it on a grand scale and with a sustainable business model.

(4) What troubles me the most is when the business of social entrepreneurs overlaps with the usual, private businesses. In fields like nursing care or education, the services that NPOs offer are often the same as those provided by corporations. In such cases, I think the NPOs should convert to a corporation and expand its scale and operate as a sustainable business model. Yet, there’s also a feeling in the society that we would no longer call an organization a “social entrepreneur” when it starts pursuing scale and sustainability.

I believe it was two years ago when a micro-finance company in India received some kind of an award at the World Economic Forum. I was surprised when the recipient said, “I’m thinking of getting support from a major bank and doing an IPO.” I wondered: Where is the line between micro-finance and consumer finance? The line between social entrepreneur and entrepreneur seemed essentially difficult to draw.

There are, on the other hand, cases where social entrepreneurs are actually making really good contributions. You would be moved to tears just by hearing some of these people talk. I believe that the best examples of social entrepreneurs are in fields that are completely inaccessible to companies. Examples of these would be models that systemize NGO-ish type of services and donation activities (collecting donations to build wells in Myanmar, donation activities and services for Cambodia, and models like TABLE FOR TWO), or methodologies that systemize education, as seen in Teach For America.

If anybody who, like myself, creates a university with the sole intention of training excellent human resources, I wouldn’t want to call him a “social entrepreneur.” I’m proud to be an entrepreneur, which I will continue to be.

These are my opinions; your objections and ideas are always welcome.

Yoshito Hori 
Twitter@YoshitoHori