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What is social enterprise?

Copyright Terry Halman 2008

There is so far no commonly agreed definition. Is an enterprise social if it produces some sort of social benefit? If so, in that sense, many or indeed most traditional businesses for profit can be considered social enterprises. Business enterprises typically produce something of value for clients and customers, otherwise they would cease to exist as business enterprises. Earning thousands or millions of customers can by definition be considered social benefit. Social refers to groups of people, as contrasted with one person. If a company produces a product or service, it has to benefit a group of people sufficiently for them to use that product or service. Owners and stockholders benefit from financial profits gained by the enterprise. Stockholders range from individuals owning relatively large percentages of a company to ordinary pensioners relying on income from micro-investments into the company. Profits from almost any large public corporation are shared among wealthy individual stakeholders to humble, modest households who have holdings in the company through an array of mutual funds managed by government-regulated financial managers.

Consider for one prominent example Microsoft. There is no question that Microsoft’s products have produced enormous profit along with providing broad social benefit around the world. We can communicate now in ways never before possible as a global social group, using a standardized computer operating system. That operating system in turn is based on personal computer technology developed largely by IBM. Microsoft produced the first OS for IBM personal computers, the combination of which sparked the information revolution and transformed the entire world. Both of those innovations employ for global communications an electronic communications protocol developed by US government, an inter-network of computers. That internetwork of computers was developed under the auspices of DARPA (Defense Advanced Research Projects Agency) to ensure constant computer communications among US military operations in the event of a nuclear war that would destroy entire cities. Parts of the network might be destroyed, but as long as any computers and computer operators remained, the internetwork would continue to function. That internetwork of computers and the standardized communications protocol to enable them to talk to each other is called, for short, the Internet. The Internet came from DARPA, created by US Department of Defense as a direct response to the USSR launching Sputnik in 1957. (NASA, and all that came from NASA, was also a direct result of the Sputnik launch.) The communications protocol developed to enable the internetwork of computers is called internet protocol, or IP All of those factors go into why you are able to read this now, almost anywhere in the world. Microsoft, IBM, and DARPA are three key factors — two public corporations and one US taxpayer-funded agency — and they are just that: key factors, but far from the only players who have made this possible. There are Intel, AMD, and other chipmakers who employed yet another new technology, VLSI (very large scale integration) to reduce computer circuits to microscopic dimensions. The corporations involved in this almost fantastical deployment of the machines and communications infrastructure that we now rely on profited for themselves and their shareholders, and certainly produced social and economic benefit around the world. Those efforts were and are so profound in influence as to transform human civilization itself. That is the Information Revolution, and it is nothing short of astonishing.

So it is safe to say that all these players in the Information Revolution — the enterprises that created it — have engendered almost immeasurable social benefit by way of connecting people of the world together and giving us opportunity to communicate with each other, begin to understand each other, and if we want, try to help each other.

It is that last phrase — “try to help each other” — which is what the phrase “social enterprise” is getting at. As Bill Gates said in 2000, “poor people don’t need computers.” and rejected a business approach to alleviating poverty. That statement served to mark the clear distinction between what traditional capitalism did and did not do. Gates’ aim at that time was to profit from people who could afford his company’s products, while those who couldn’t were largely or completely ignored. That has been the accepted limit of traditional capitalism. It has been a marvelous means of social benefit and economic advancement for many people. Nevertheless, those excluded are just left out.

The term “social enterprise” in the various but similar forms in which it is being used today — 2008 — refers to enterprises created specifically to help those people that traditional capitalism and for profit enterprise don’t address for the simple reason that poor or insufficiently affluent people haven’t enough money to be of concern or interest. Put another way, social enterprise aims specifically to help and assist people who fall through the cracks. Allowing that some people do not matter, as things are turning out, allows that other people do not matter and those cracks are widening to swallow up more and more people. Social enterprise is the first concerted effort in the Information Age to at least attempt to rectify that problem, if only because letting it get worse and worse threatens more and more of us. Growing numbers of people are coming to understand that “them” might equal “me.” Call it compassion, or call it enlightened and increasingly impassioned self-interest. Either way, we are all in this together, and we will each have to decide for ourselves what it means to ignore someone to death, or not.

Notably, Gates came around in 2001 to what P-CED had been advocating and doing since 1996 — since the first year of the mass Information Revolution, which was made possible by release to the masses of an easy-to-use hypertext reading device called a “browser”, from Netscape. Gates’ label is ‘creative capitalism’, which is just another way of saying people-centered economic development. Focus is capitalism with output modified to specifically help people that traditional capitalism did not and would not reach.

Terry Hallman died on 18th August 2011. A man whose efforts to be the change led the way for a new way of doing business, for people and planet.