Creating Social Value

Abstract

Does social entrepreneurship matter? A strong consensus is emerging that this question has an obvious answer. The disagreement comes over whether that answer is "yes" or "no." With reference to three cases (the Tata Group, the Aravind Eye Hospital, and Ben & Jerry's), I argue in this paper that entrepreneurs of various types create both private and social value. Private value can be assessed in terms of conventionally defined consumer surplus and producer surplus, where producer surplus is comprised of financial, reputational, and ethical "residuals." Social value derives both from potentially positive impacts on the transparency and effectiveness of governance, and from direct action to address inequities. The potential impact of social entrepreneurship, and its relevance in the context of global challenges, is enhanced by global trends toward networked production and service delivery.

Keywords: development, entrepreneurship, governance, social entrepreneurship, corporate social responsibility

JEL Classification: L26, A13