Time to put the entrepreneurship record straight

I am uncomfortable with the current idea of social entrepreneurship — the notion of good samaritans, ie social entrepreneurs and bad capitalists, ie for-profit entrepreneurs.

Ideas guide not only speech but also the behaviour and decisions of public and private actors. It is necessary to put the record straight and provide a more accurate framing of the reality of entrepreneurship in the 21st century.

Entrepreneurs do not act in a social vacuum. They live and work in a social context, their actions are influenced by the surrounding social environment and in return make an impact upon it. Applying the label ‘social’ to a part of the entrepreneurial phenomenon does not make sense because all entrepreneurship is social.

For-profit entrepreneurship cannot be antisocial either. In advanced countries entrepreneurs are subject to legal and social controls. They cannot afford to play against society.

Social entrepreneurship however, is not always what it seems. The distinguishing feature claimed by proponents of this form of entrepreneurship is to place the social purpose at the centre of a company. When a project has a commercial dimension, economic logic gives way to social mission. But social entrepreneurs are human beings and the organisations set up to serve the mission, if not tightly managed, can end up playing against it.

This is less the case when social entrepreneurship is transformed into a profession or a business. Where the income or social identity of a person, or group, is based on a social enterprise, sustainability of the business often becomes an end in itself.

Since for-profit entrepreneurship is necessarily social and social entrepreneurship is not always so social, we should look for a label other than ‘social’ to help us sort the good from the ugly. From my point of view, a more valid distinction must be made between responsible and irresponsible forms of entrepreneurship. Because it is easier to define negatively, irresponsible entrepreneurship is one that puts the selfish interests of the entrepreneur at the heart of a project.

In contrast, responsible entrepreneurship, for-profit or not, begins by recognising the right of the entrepreneur to pursue his or her own objectives and compels him or her to do so in respect of people and the environment. The ideal responsible entrepreneur does no harm and does not produce negative results. Responsible entrepreneurs can produce negative results but must be held accountable for them: they clean when they pollute, they develop employability when they do not want to promise lifetime employment, they offset the drudgery of work when they cannot avoid it, etc.

Emphasising responsibility has another advantage. It contributes to the development of responsibility in the business world. Business schools must promote responsible leadership, responsible governance, responsible employment and responsible investment. They must also educate responsible entrepreneurs. I hope that we have come full circle.

The author is professor of management and entrepreneurship at Essec Business School.