Social Entrep

download Social Entrep

of 69

  • date post

  • Category


  • view

  • download


Embed Size (px)

Transcript of Social Entrep

  • 8/9/2019 Social Entrep



    & GovernmentA New Breed of Entrepreneurs

    Developing Solutions to Social Problems

    by Andrew M. WolkFounder & CEO, Root Cause

    MIT Senior Lecturer, Social Entrepreneurship

    From The Small Business Economy:A Report to the President, 2007,

    by The Small Business Administration, Office of Advocacy.

    A Report

  • 8/9/2019 Social Entrep


    ii Social Entrepreneurship and Government

    Dear Mr. President:

    Te Oce o Advocacy o the U.S. Small Business Administration (SBA) is

    pleased to present Te Small Business Economy: A Report to the President.*Te

    American economy is blessed with an entrepreneurial spirit that continues tobe the envy o many nations around the world. Small business leaders provide

    new ideas, employ additional workers, and develop innovative products and

    services. By investing in their businesses, the small rm owner makes a major

    contribution to the local, regional, and national economy.

    Over the past year, the Oce o Advocacy has conducted research that

    documents these points. First, Kathryn Kobe o Economic Consulting Services

    reconrmed our knowledge that small businesses account or hal o private,

    nonarm gross domestic product. Second, Donald Bruce, John A. Deskins,Brian C. Hill, and Jonathon C. Rork nd that a states ability to generate new

    establishments is the most important actor that leads to higher gross state

    product, state personal income, and total state employment. Finally, Larry

    Plummer, a doctoral student at the University o Colorado at Boulder who

    served as a visiting research economist in this oce, ound that new business

    entrants provide long-term benets to the local economy; the increased com-

    petition might be painul in the short term, but with time, collaborative eorts

    accrue to everyones betterment. Tese and other studies can be ound on theOce o Advocacys research page at

    Tis edition oTe Small Business Economy eatures two chapters on owner

    demographics based primarily on the 2002 Survey o Business Owners rom

    the U.S. Census Bureau. In documenting the number o small businesses

    owned by minorities, women, veterans, and service-disabled veterans, we gain

    a better understanding o their contributions to the economy.

    Tis report also summarizes the economic and small business nancial

    climate in 2006, and examines small business procurement. Generally, theeconomy and nancial markets were supportive o small business growth in

    2006. Te Oce o Advocacy, through its implementation o the Regulatory

    Flexibility Act o 1980 and Executive Order 13272, has assisted small busi-

    nesses by helping to reduce the regulatory compliance costs o proposed rules.

    For instance, in FY 2006, Advocacys eorts resulted in cost savings o $7.25

    billion in the rst year and $117 million annually or small businesses. Tese

    * This letter originally appeared in The Small Business Economy: A Report to the President, 2007, ed. U.S.

    Small Business Administration, Ofce of Advocacy (Washington: United States Government Printing Ofce,

    2007): iiiiv. Republished with permission.

  • 8/9/2019 Social Entrep


    Social Entrepreneurship and Government iii

    are costs that will not be borne by the small business owners as a result o

    changes in the regulations they comply with.

    We also eature two chapters rom external contributors. Andrew Wolk

    o the Root Cause Institute and a senior lecturer at the MassachusettsInstitute o echnology presents a number o examples o social entrepre-

    neurship across the country and outlines steps governments are taking to

    promote social entrepreneurs as a mechanism or solving some o our nations

    problems. Some may ask, What does social entrepreneurship have to do

    with small business? A short answer might be that social entrepreneurship

    exhibits many o the attributes o small business entrepreneurship, serving

    as an engine o innovation, job creation, and economic growth. Moreover,

    by bringing together aspects o the public, private, and nonprot sectors

    to address a market ailure, social entrepreneurs have, in a variety o ways,

    helped create an economic environment in which private entrepreneurs and

    small businesses can fourish. Te longer answer may be to read on and see

    how this chapter answers the question. It is an excellent chapter that will

    provoke discussion in academic and policymaking circles.

    A second chapter rom external contributors, by William Gartner o

    Clemson University and Jianwen (Jon) Liao o the Illinois Institute o

    echnology, discusses the need or pre-venture planning. Tey nd that

    nascent business owners who engaged in business planning during the startup

    phase and wrote a ormal business plan were more likely to open and remain

    in business. In essence, they suggest that the process o drating a business

    plan was essential to the overall success o the venture. While that might

    seem common sense to many, a debate in recent years has sometimes chal-

    lenged the need or pre-venture planning as a prerequisite or success. Tis

    chapter lends credence to those who suggest that planning matters.In sum, the 26.8 million small businesses in the United States play a vital

    role in the economic well-being o our nation. Te research o the Oce

    o Advocacy continues to document the importance o the entrepreneur in

    maintaining economic growth, employing workers, bringing new innovations

    to the marketplace, and remaining competitive in a global economy.

    Chad Moutray

    Chie Economist and Director o Economic Research

  • 8/9/2019 Social Entrep


    iv Social Entrepreneurship and Government

    About the Author

    ANDREW WOLK is the ounder and CEO o Root Cause and oversees

    the organizations overall strategic direction. Root Cause builds social

    innovators and educates social impact investors to support the liecycle o

    developing enduring solutions to social problems. Andrew has consulted to

    dozens o organizations working in the elds o civic engagement, economic

    development, education, the environment, seniors, and more. As part o

    Root Causes knowledge sharing ocus, Andrew has co-authored the Root

    Cause How-to Guide Business Planning or Enduring Social Impact:

    A Social-Entrepreneurial Approach to Solving Social Problems (available at, January 2008). He also ounded the two social

    enterprises that Root Cause leads: InnerCity Entrepreneurs (ICE)

    and the Social Innovation Forum. Andrew is a senior lecturer in socialentrepreneurship at MIs Sloan School o Management and the

    Department o Urban Studies and Planning.

  • 8/9/2019 Social Entrep


    Social Entrepreneurship and Government v


    Tis project was managed by Marie Zemler Wu, senior editor, an

    independent consultant providing support to government and nonprot

    organizations that seek innovative solutions or assisting children and amilies

    living in poverty. Trough research, analysis, and strategic planning, Marie has

    helped clients including the Annie E. Casey Foundation, Harvard Universitys

    Innovations in American Government Awards program, Columbia

    Universitys National Center or Children in Poverty, and New York Citys

    Administration or Children and Families.

    Special thanks to Kelley Kreitz and Andrea E. McGrath or their editorial and

    project management expertise, and to Jackson Shuler or research support.

    Te author is also grateul to the many people who contributed case studies,

    provided interviews, and served as reviewers or this report:

    Case studies

    Kh a

    riangle Residential

    Options or SubstanceAbusers (ROSA)

    Mchl Bo

    City Year

    Bo B

    Outside the Classroom

    Kh F


    Jm Fchm


    dll Hmmo


    Jo sch

    New Leaders or New


    sy schz

    Resolve to Stop the

    Violence Program


  • 8/9/2019 Social Entrep


    vi Social Entrepreneurship and Government


    s Cppol

    Girl Scouts o the USA

    Chyl doy

    Echoing Green

    Bll dyo


    d e

    National Corporation

    or Community Service

    Ch Gbl

    Massachusetts 2020

    K Gg

    Sustayne, Social

    Enterprise Group

    sph Golmh

    Harvard University

    Kennedy School o


    Lc HoSkoll Foundation

    Mchl Hll


    Protection Agency

    Ho Hock

    Manhattan Institute

    r. to Joho

    Jones Day

    al Khz

    City Year

    Mg Kock

    Americas Promise

    rob Lg



    Pl Lgh

    New York University

    Wagner Graduate

    School o Public Service

    ncy McG

    Aspen Institute

    sh Mll

    Caliornia Center or

    Regional Leadership

    Jy MoOce o the Louisiana

    Lieutenant Governor

    Jfy robo

    New York University

    Stern School o


    d roll

    Lex Mundi Foundation

    JB schmm

    College Summit

    ec schz

    Citizen Schools

    Blly sho

    Share Our Strength

    e skloo

    Surdna Foundation

    Km sym

    New Prot

    rch tby

    Solar rade


    tmohy Zk


    University Heinz

    School o Public Policyand Management,


  • 8/9/2019 Social Entrep