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Social Entrepreneurship In The Developing World

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Social Entrepreneurship involves using of technology by a start-up company with entrepreneurs for non- profit to start, fund and implement solutions to social, cultural, or environmental issues. These concepts will vary from aims, beliefs, innovation, market orientation and even sizes of the social enterprises formed. These entrepreneurs pursue poverty alleviation goals with the zeal of any profitable company that they may start up.AS Bill Drayton says whenever society is stuck or has an opportunity to seize a new opportunity, it needs an entrepreneur to see the opportunity and then turn that vision into a realistic idea and then a reality and then ,indeed, the new pattern all across society. Social entrepreneurship is tailored to directly and ultimately make an impact on social value.The world is fast changing with major challenges being social ones. Social entrepreneurship is a relatively new, but rapidly growing field in business and corporate social responsibilities. Social entrepreneurs set out to use their entrepreneurial skills to bring about positive change in society. They do this by developing, funding and implementing solutions to social, cultural and environmental issues. The phenomenon has been about to bring about profound change in societies around the world. Through these initiatives, it is easier to have society conserve the environment, start projects which can economically sustain them, and even enable a large unbanked population to access financial services. An example of this was implemented by the Bangladeshi banker, Muhammad Yunus, whose Grameen Bank has been credited with opening up access to the unbanked in Bangladesh, in the process equipping them with the necessary tools to defeat poverty (Yunus & Jolis, 2007).

There are different approaches to social entrepreneurship. In some instances, the approach may be done as a purely nonprofit making organization. In other instances, it may blend nonprofit and profit making approaches, blending typical business approaches with more conventional not for profit endeavors. While some social entrepreneurs start their businesses solely to help the poor and to highlight some social issues, others are conventional business people who decide to start a side project which is dedicated to looking after the needs of the poor.


Research Problem

While social entrepreneurship is a well-developed phenomenon in the developed world, this idea is only starting to become prevalent in the developing world. As locals start to take matters in to their own hands, they have started to build their own projects to deliver their people out of poverty. However, the practice has not yet taken root. This paper aims to show the reasons why social entrepreneurship in Africa, Asia, Latin America and Eastern Europe still lags behind and are the unit of investigation. It will also attempt to find out what can be done to help spur this practice, and what the effect of existing initiatives has been so far.

Research Questions

The research questions are designed to lead to answers for the problem indicated in the above section. The questions will be as follows:  What stands in the way of social entrepreneurship in the developing world and Eastern Europe? The second question will involve solutions for this, and will be stated as follows: what can be done to spur social entrepreneurship in these regions? The third question will look at what the social entrepreneurs have already achieved, so as to justify even more investment. It will read: what has so far been achieved through these initiatives in the mentioned areas?


Literature Review

The latest report from World Bank indicate, that the worlds’ population is living under the poverty lines. This being 902 million people though, this might fall depending on efforts that the millennial development goals and beyond will contribute to the development progress. Poverty is a pervasive problem in the world today. One in six people is currently malnourished, and unable to access clean drinking water. A bigger number, 2.4 billion people as of 2003, are unable to access proper sanitation. This results in the death of 10 million children every year due to preventable diseases. The gap between the poor and rich continues to grow, such that 50% of the world’s population controls only 5% of the total global income. This means that several governments are unable to provide the services which are necessary to guarantee a decent livelihood for their people. Instead of stepping up their efforts and helping to fight poverty, several governments around the world are dedicated to forcing self sustenance, so that social investment is decreased. The result has been that few people are able to come out of poverty, unless they find alternative means (Nicholls, 2006).

The circumstances above are not a new phenomenon. In fact, they are only getting better, form the days when a bigger population of the world’s population was actually poorer, and faced stark odds in trying to lead a healthy life. This is especially the case in the United States, where the actions of a few citizens were instrumental in enabling their people to learn how to read and write. In other countries, people were able to dedicate their efforts to the public good, spending vast amounts in research, and thereby discovering cures which drastically improved the quality of life of their people. In this way, social entrepreneurship in its basic form was developed in the west. Through t, individuals and corporate were able to step in and effect social changes which fundamentally changed the prospects of their societies in a positive way (Praszkier & Nowak, 2012).

The great start to social entrepreneurship was however not reflected in other countries around the world. The developed work does not lack in imagination and the drive required in making social entrepreneurship. And while there have been many people who have come out to engage in corporate social programs, their ability to bring about real change is inhibited by their lack of knowledge in local problems, and lack of the needed funds to effect development.  Inversely, others have come up with the notion that perhaps, the problems of the third world are too many to be resolved simply using social entrepreneurship. Therefore, their efforts to become are in many insignificant drops in an ocean of want and underdevelopment (Singh, 2016).

In the case of India for instance, the government has been spending only around 1% of the GDP on health. Only about 10% of the whole population has medical insurance. All this happens in a country which has the world’s fourth largest economy. In a population of 1.2 billion, this means that a vast majority of the country is vulnerable to health problems. It also means that a huge investment than what the government currently commits is required to ensure better healthcare, accompanied by political will (Singh, 2016).

In the developed world, as well as in the developing world, social entrepreneurs face the problem of having to navigate through complicated laws.  The case of Canada however shows that the government has not yet provided their social entrepreneurs with the necessary facilities to make a more profound impact on their societies. In the developing world, the situation is much worse. Governments have not had the political will or the necessary technical ability to change the law, and come up with a framework which actively enables social entrepreneurship. One such area is taxation. While corporate tax is in many cases punitive, the same should not be similar with other versions social businesses. These businesses are therefore unable to actively provide the services they need to provide to their people. More importantly, they do not have any incentive to engage in social entrepreneurship (Rykaszewki, Ma & Shen, 2013). 

Social entrepreneurs are in many cases inspired to resolve issues which occur in countries or regions and societies besides theirs. In this case, they are unable to properly address the issues which affect these people. In other cases, the social entrepreneur is not clear on what he wants to achieve in the society. Therefore, lofty ideas may be floated, and even implemented. However, they are not in any way aligned to the immediate needs of the people they are meant to help. For instance, it may be more practical to help a community in maize – growing area with farm inputs and mechanized agriculture, instead of tools to make their sheep healthier, if this is not their main economic activity (Seanor & Meaton, 2008).

The issue with entrepreneurship, when it is done in absentia as is the case in many of the initiatives, is that it results in the social entrepreneurs having to rely on third parties to implement their agenda. This leads to a situation whereby trust is relied on, and at the same time, it is betrayed. The entrepreneurs therefore find that the work which they set out to accomplish in the society is diluted, and has minimal impact (Seanor & Meaton, 2008).

The failure of entrepreneurs to come up with the right plans for their initiatives is another reason why there may be lower numbers of businesses in the developing world, and why the organizations they set up eventually fail. The society in many places does not give their people the necessary support to be successful in social entrepreneurship. In these circumstances, entrepreneurs are unable to come up with the necessary funds and skills needed. The society needs to help develop the social entrepreneurship skills. At the same time, the society may not properly value the impact that social entrepreneurs add to their communities. Therefore, besides making it unattractive to become social entrepreneurs, the society does not give their people any chance in terms of skills to have an impact in bettering the lives of other people (Atsan, 2016).

Social entrepreneurship in the third world has also been the subject of unethical conduct accusations. People and institutions who present themselves as social entrepreneurs may actually be taking advantage of the circumstances to enrich themselves, or to bolster their images, and in other cases, increase their public relations image. In these circumstances, social entrepreneurs have been able to abuse their position, and dilute the impact of the projects they are expected to implement. In other instances, they act as the agents of real entrepreneurs who are located away from the area of focus. They may be able to siphon funds aimed for use in the community for their own needs (Chell et al, 2016).

As discussed earlier, the circumstances in the developing world are not helped by stringent government regulation. In addition however, social entrepreneurs are faced with endemic corruption. They sometimes discover that a significant amount of the money they intend to spend is in actual sense spent in bribes and navigating through barriers before they can start their operations (Chell et al, 2016).

Culture may also have a negative effect on entrepreneurship. Some people are generally suspicious of outside interference. This is especially so if the people have a negative experience with foreigners, leading them to look at every person with doubts, regardless of how noble their intentions are. Under such an environment, it is unlikely for the entrepreneur to have great success in the community. They may be faced with sabotage, and general lack of public support necessary to drive their agenda ahead. Under these circumstances, it is impossible for the entrepreneur to be successful. More importantly however, it communicates to other entrepreneurs that they are not welcome in the community. This will in time deprive the community of entrepreneurs, whether they come from outside the particular society, or are indigenous to it (Malunga, Iwu & Mugobo, 2014).

It is however not all gloom and doom in these areas. In Africa for instance, it has been noted that social entrepreneurship is drastically increasing. This has been powered on by the actions of business personalities across the continent taking on a more corporate responsible role, whereby they have been at the forefront in helping the underprivileged in society better themselves. The focus is not only on economic empowerment. They are also investing in issues such as maternal healthcare and basic education, thereby helping empower communities. While some of the initiatives have been started with the intention of generating profits, they are also helping transform the communities within which they operate. They do this by being able to close the gap between what the government provides its people in terms of education and healthcare, and what the people realistically need (CNBC Africa, 2017).

As has been mentioned before, the developing world is pulled back from social entrepreneurship by the presence of serious impediments to trade. These include corruption, and the lack of enabling legislation which would make the countries easier for organizations to operate in. However, this is changing,. Countries have awoken to the powerful force of business in instituting economic and social change in their societies, and set out to make it as easy as possible to open and operate businesses. Additionally, more enabling tax regimes have been legislated, such that social entrepreneurs only need to pay a small amount of their income in taxes, and therefore have much more to invest in communities. The economic situation in Africa is also improving, as is awareness. It is therefore becoming easier for social programs by social entrepreneurs to have an impact. People are less distrustful of foreigners, for instance, and opportunities to start businesses are likelier than before to deliver people out of poverty (Rivera-Santos et al, 2015).



The paper is a secondary research. It will mainly look at already existing literature, so that it can then synthesize the necessary information and make necessary recommendations. The paper has reviewed peer reviewed journals, books written by eminent social entrepreneurship scholars, and other important information generated by the internet. The paper is also determined to be as balanced as possible. In doing so, it will ensure that the recommendations reached are also unbiased, and are meant to help in the growth of social entrepreneurship. The Google search terms were “social entrepreneurship”, “reasons for low social entrepreneurship in the developing world”, and “current trends in social entrepreneurship in the developing world”.

Findings and Analysis

Social entrepreneurship in the developing world is alive and well. However, it faces serious challenges, which have profoundly affected its impact on the lives of the world’s poorest individuals. While it may be argued that the reason for this is poverty, the statistics paint a different picture. It has been shown for instance, that while India is the fourth largest economy in the world, only 10% of its 1.2 billion strong populations can access insurance. This means that it is not a question of lack of material wealth, but how this can be translated into programs which positively affect the lives of the common man, whether or not these programs are led by the government or private entities.

The cultural, economic and political realities on the ground also ensure that social entrepreneurship does not leave a mark in the developing world as it has done in the West. While the environment suggests that this should be the case, and that there is the necessary man power, will and capital needed to mount a successful social entrepreneurship initiative, the circumstances on the ground are different. The presence of corruption has served as a huge impediment to the implementation of social implementation programs, as has the presence of legal restrictions, which are not friendly to social entrepreneurship.

Despite these situations, the environment is changing. The economic realities in the developing world are vastly different to what they were years ago. Strong economies have arisen, backed by governments which appreciate the importance of social entrepreneurship. These governments also understand the limitation of their initiatives in alleviating poverty. As a result, they are more supportive. As information becomes more accessible, the distrust which has for a long time been the character of much of the third world is slowly disappearing. Many of these societies are increasingly more open, enabling social entrepreneurship to flourish.

The most important lessons to have in mind for growing and starting social entrepreneurs include innovation, recruiting and mobilizing people, infrastructure and business linkages, different terrains, financing sources. Innovation is a costly but necessary part in any business and in this case social entrepreneurship, development options have to be made available for an easier production of new technologies this way research and development costs are reduced or taken care of. The barriers of entry are very high since the social enterprises have to create their own infrastructures and business linkages as this is not available for them but on the other hand, actually available for the large businesses but are taken for granted. With regard to institutional terrains, social enterprises don’t fit in well as compared to private sectors which are easy to deal with. Lastly, they fully rely on the governments or philanthropists for funds as this sector virtually has no financing sectors to help them with capital or credit requirements.



Social entrepreneurs in developing countries are rarely known and this is not because that they lack entrepreneurial talent but because many who initiate the process and projects to empower their lives out of poverty go unnoticed. In this time and age this should stop and they should be given support and resources to actualize their entrepreneurial skills. It is clear that despite the steps that have been made in making social entrepreneurship a common theme in the world, and specifically the less developed countries, much more needs to be done. To help this, governments have to play a central role. This should start with their ability to set enabling legislation. These rules and regulation will help the economy to function effectively and efficiently and thus delivery of goods and services to the public will be faster. The issue of taxation should be done in a way which acknowledges those who spend all or most of their income on social initiatives. This should also include laws which make it easier to open and operate a social entrepreneurship project in the said countries. In addition to this, the government, in collaboration with other education partners should improve access to entrepreneurial education. Its ability to alleviate poverty should be highlighted, to ensure potential social entrepreneurs are able to implement their ideas.

It is also recommended that there should be greater cooperation between the social entrepreneurs and the communities within which they aim to work with. They should for instance ensure that the plans they want to implement are workable, and will actually result in a positive change for their people. Additionally, they should ensure that they properly involve the people, so that the projects they come up with are actually able to have a positive impact on the community, instead of dying off due to impracticability.


Global entrepreneurs’ council is responsible for promoting social entrepreneurship worldwide. Once they put they efforts together with global influencers and other world leaders a lot of social entrepreneurship will be appreciated as they would give support and do promotions on same. A lot of small and big programs help the to enlighten the community to make a difference in the society. Through technology programs, a big geographical region is able to be reached easily and if the partnerships are stronger, it would also be sustainable. The phenomenon of social entrepreneurship might be the best bet for poor people who no longer trust that their governments can come up with the necessary tools to enable them lead a better life. While governments are shrinking, the social entrepreneurs are taking their place, increasingly succeeding in creating positive change in society. It is therefore clear that in future, a major driver of development and human empowerment will be social entrepreneurship activities started by private entities.

Lastly social entrepreneurs build sustainable ventures and have a clear guiding rule not only to assist the people who are in dire need but mostly to empower them to develop themselves on a personal level, local and further the whole countries economy. It is more of ‘Give a man a fish and you will feed him for a day. Teach a man how to fish and you will feed him for a lifetime’.



Nicholls, A. (2006). Social Entrepreneurship: New Models of Sustainable Social Change. Oxford: Oxford University Press.

Yunus, M., & Jolis, A. (2007). Banker to the poor: the autobiography of Muhammad Yunus, founder of Grameen Bank. New Delhi: Penguin.

Praszkier, R., Nowak, A. (2012). Social Entrepreneurship: Theory and Practice. Cambridge: Cambridge University Press.

Singh, A. (2016). The Process of Social Value Creation. New Delhi: Springer India.

Rykaszewski, S., Ma, M., Shen, Y. (2013). Failure in Social entreprises. University of Toronto, 1-29.

Seanor, P., Meaton, J. (2008). Learning from failure, ambiguity and trust in social enterprise.  Social Enterprise Journal, 4(1), 24-40.

Rivera-Santos, M., Holt, D., Littlewood, D., Kolk, A. (2015). Social Entrepreneurship in Sub-Saharan Africa. Academy of Management Perspectives, 29(1), 72-91.

Atsan, N. (2016). Failure Experiences of Entrepreneurs: Causes and Learning Outcomes. Social and Behavioral Sciences, 236(2016), 435-442.

Chell, E., Spence, L., Perrini, F., Harris, J. (2016). Social Entrepreneurship and Business Ethics: Does Social Equal Ethical? Journal of Business Ethics, 133(4), 619-625.

Malunga, P., Iwu, C., Mugobo, V. (2014). Social Entrepreneurs and community development. A literature analysis. Mediterranean Journal of Social Studies,5 (16), 18-27.

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