Welcome back to the MOOC on Social Entrepreneurship. My name is Kai Hockerts, and I'm very glad to see that you're back here this week. I was a bit afraid that we might have scared you off with the outline that we have given you last week, in which we suggest that you actually will start a social enterprise during the next 15 weeks. What we have done during the introduction week is shown you a couple of social entrepreneurs. We have encountered Andreas Møller who has started a social enterprise called Bangura Bags which is raising funds for the Masanga Hospital in Sierra Leone. We have also heard from my colleague Ester Barinaga who was involved in a social innovation project in Sweden, which helps paint murals and thereby bring together communities. And we have encountered Johanna Mair, the editor of the Stanford Social Innovation Review. Now, these different stories have shown to you that social entrepreneurship can be used in a number of different ways. That is actually where the peer evaluation exam assignment of last week came in. When we asked you to define what your view on social entrepreneurship is. I very much hope that you did take the time to upload a few ideas of what you consider to be social entrepreneurship. And hopefully, you also went back to look in and evaluate some of the submissions of your colleagues. As I said last week, this is not so much for the final certificate, but more to help you with your own learning process. To help you prime yourself for the discussions that we will be having each week. So, if you didn't do time for the peer evaluation exam last week, please try to make a bit of time in the future weeks. Come back, have a look at what your colleagues have written, evaluate their submissions. In this week, we are going to start off with a discussion of our students talking about the question of how to define social entrepreneurship. So we can listen in a little bit on what they consider to be social entrepreneurship and how these views contrast with each other. After that, I will give you a number of definitions of social entrepreneurship and I will show you how they differ and why that is important. Following that part, we will have a number of guest speakers. And then we will already start into our project work. Towards that end, I have a particularly interesting project that is close to my heart which is called the Seven Day Challenge. Now, if you don't have much time this week to watch the videos, please do make sure to look at the Seven Day Challenge video. I believe this is the most important part of this week. In the Seven Day Challenge, we ask you to do this. First, join in groups together with other MOOC participants. Second, begin to research a social cause and launch an online awareness campaign on that issue. Fourth, even if at the moment you don't plan to start a social enterprise, please join one of those groups and get involved in a small way. We will finish the videos this week with two assignments. Firstly, the peer evaluation exam. Secondly, we will start with the optional case assignments this week. Remember that there is no submission for the case assignments. All we ask you to do is to watch the case organization and think through the preparatory questions. This will prepare you for the case discussions next week. This week's case assignment deals with two organizations called Ashoka and Unlimited, both of which work with social entrepreneurs. However, as you will see, they have different visions of what a social entrepreneur is. You will be able to watch short interviews with people from Ashoka and Unlimited, to give you a first hand view on how they approach the question of social enterprise. But now, let's talk about last week's peer evaluation exam. We will start out by listening in to what our students at the Copenhagen Business School have to say about the exam question, namely, how to define social entrepreneurship? >> I think individuals can be social entrepreneurs. And I think also social enterprises are organizations that try to achieve social change by applying business tools. And so by using earned income to achieve social goals, I think is what defines a social enterprise. >> Mm-hm. >> But I also agree that individuals without a big organization could be social entrepreneurs. >> You must need a differentiation between the social entrepreneurs and the social enterprises. If we don't have the formal structures, we have a social entrepreneur, if you have formal kind of formal structures then it could be a social enterprise. What do you think? >> I think that while it's different how we label, as you mentioned, it's all one big pot of people who see problems and want to create change. And we're just defining which level we're at. And I'm not sure that I would call the individual a social entrepreneur, it depends on what they're doing. But that for me, is also a definition of the word entrepreneur itself. So when are you an entrepreneur? And I don't agree that you're an entrepreneur just because you're generating some income, or doing something in the local society. I think that we need to, really to be an entrepreneur, you need to do something that's innovative. And something that's new which we haven't really seen before or in a new context. So a new way of creating change. And that's both for a normal entrepreneur but also for the social entrepreneur. I think what you mentioned, for me and my way of defining, would probably just be a person with a great, what do you call it? Great recognition of what's going on around them and who has this initiative, the feeling of initiative and who wants to create change in the local society, but they will probably never reach above that. So they will never move on to be the social entrepreneur starting a social enterprise. >> Do you not think that this kind of definition make hazards to the people who don't really want to work well in, for the society rather than encouraging them to just continue, recognizing them. >> Recognition all the way through. I just wouldn't define them as a social entrepreneur. But I think many of the people who are actually doing these projects don't see themselves as a social entrepreneur. Many people don't even get to thinking about the terms that we use or the labels we put on. They just know that they're doing something because they see a problem and they want to find a solution to it, especially when it's only individual. And then you get on to the enterprises where you have the more organized structure and then you start recognizing that we have roles. We come together to create the strongest team, to actually reach more people and hopefully have a greater impact. And then you also have the full structure, support structure, for these enterprises as well, where you have the full funding, for example. Such as, Unlimited and Ashoka, who goes in, and for example in Ashoka's case, pick out someone, a fellow, and say: We can really see that what you're doing will create change. So this we want to support so you don't have to worry about everything else in the world. Now, we give you the funding, go spread this out. >> When considering definitions for social entrepreneurship, we need to consider two dimensions. The mode of social entrepreneurship, and the level of analysis. First, let's consider the three levels of analysis. At the individual level, social entrepreneurship refers to social entrepreneurs, who are defined as people using entrepreneurial spirit to achieve social change. At the organizational level, social enterprises refer to organizations that employ business tools to achieve social goals. And thirdly, at the interorganizational level, social impact investors and social incubator networks provide capital and advice to social entrepreneurial startups. Secondly, we can differentiate two modes of social entrepreneurship. The Social Enterprise mode refers to the foundation, management, and growth of social enterprises. In everyday practice, we would consider an entrepreneur to be a person who starts or runs a small business. Thus, if you open a bakery, you would be considered an entrepreneur. Following this logic, the founders and managers of small social enterprises can be considered to be social entrepreneurs. The second mode of social entrepreneurship is called the Social Innovation mode. It draws on the work of Joseph Schumpeter. Schumpeter says that it's not enough to start your own business. Actually, to be an entrepreneur, you have to identify a previously unexploited opportunity. Accordingly, the social innovation mode is considered with the discovery and sustainable exploitation of opportunities to create public goods through the generation of disequilibria in market and non-market environments. In the social innovation mode, we thus require three things. The discovery of previously unidentified opportunities to create public goods obliges social entrepreneurs to be inventive. The sustainable exploitation of this opportunity requires that they find a financially viable business model that allows them to support the idea financially. And, finally, the generation of disequilibria implies that social entrepreneurs, in the Schumpeter sense, cause disruption in their market and non-market environments by initiating their peers to copy and replicate their ideas. Let me give you an example here. I'm pretty sure that you have heard of Professor Muhammad Yunus, the founder of Grameen Bank, a microfinance social enterprise in Bangladesh. Professor Yunus has received the Nobel Peace Prize because of his contribution to the area of microfinance. Let's consider this example from both a social enterprise perspective and a social innovation perspective. Did Muhammad Yunus receive the Nobel Prize because he started, managed, and grew a social enterprise called Grameen Bank? I don't think so. In my opinion, he has been awarded the prize because so many people around the world have been inspired by his work. The Grameen Bank model has been copied and replicated in numerous countries. Today, for-profit banks such as Deutsche Bank or Société Générale have invested in microfinance. At the same time, the microfinance idea has revolutionized development organizations such as the World Bank or DANIDA, the Danish Aid Organization. Muhammad Yunus has both started a social enterprise and kicked off a global social innovation. However, keep in mind that you do not actually have to do both. Not all social enterprises are innovative, and not all social innovators start social enterprises. Let me give you an example of why the difference between social enterprise mode and social innovation mode matters. In the '90s, the environmental activist organization Greenpeace developed an environmentally friendly refrigerator technology called Greenfreeze. The East German manufacturer Foron developed a prototype, and by advertising it, Greenpeace helped Foron receive 70,000 pre-orders. Foron quickly became the poster boy of German social enterprises. It had a revolutionary new green technology. It created jobs in a region of Eastern Germany with high unemployment, and it had a financially attractive product. However, when Greenpeace put the Greenfreeze technology into the public domain, many competitors followed suit, and Foron eventually went bankrupt after it had lost its major differentiation advantage. Today, over 300 million refrigerators use the Greenfreeze technology. They have been sold in Europe, Asia, and South America by leading brands such as Whirlpool, Bosch, Haier, Panasonic, LG, Miele, Electrolux, and Siemens. Should we consider the Foron story a success or a failure? From a social enterprise mode point of view, Foron has failed. From a social innovation mode perspective, Greenfreeze has transformed a whole industry. So you can see that there is quite a difference between the social enterprise point of view, which is focused on a specific organization, and the social innovation point of view, which mainly wants to transform industries and get other people to copy and replicate your ideas.
