Social entrepreneurship – a sound business strategy

  Social entrepreneurship means identifying or recognising a social problem and using entrepreneurial principles to organise, create, and manage a social venture in order to achieve a desired social change. For third world countries and emerging economies, the concept of leapfrogging the prosperity and growth separating us from the West, which is further geometrically spawned by the digital divide, may be a daunting prospect – yet there are synergies and interdependencies which if explored can, and would certainly, provide our industries with needed stimuli for enhanced productivity and growth. A lot of these initiatives fall within the bracket of social entrepreneurship. Take the case study, below, as a real life illustration of how, even at the most modest levels, social entrepreneurship can serve as such a catalyst.

He is a major cement distributor and we’ll call him Mr. A for the purpose of this article. His distribution business is doing so well that he has gained market and industry recognition simply from the volumes he commands. As a result, he has won both local and international awards from his wholesaler, one of the big cement companies in the country. This, in itself, would have been enough of an accolade, but this gentleman is much more than a good businessman; lurking beneath his striking business acumen is also the dynamic of social entrepreneurism.

Mr. A, who also happens to be the chairman of the Block Builders Association in his locale, has taken it upon himself, leveraging his education, exposure and influence, to train other block builders within the association – who happen to patronise his cement – on the right mix of components for making strong and society

durable blocks. While this mentorship has been provided free of charge – the returns to Mr. A’s business have been phenomenal as, similar to a NAFDAC seal of approval, the local block market has come to recognise the superiority of the products marketed by those in Mr. A’s network and has rewarded them with a near monopoly of patronage, thus affirming the adage that good business is the best business.

What goes round does indeed come around, for as the demand of cement blocks from Mr. A’s social network of block makers has arisen, so has their demand of cement from Mr. A’s business. The economics has worked in everyone’s favour: while the marginal cost of producing an extra block of cement has risen due to an increase in cement input, the market’s favourable response to higher quality blocks has more than offset the increase in costs – and while Mr. A may have shared what was once a competitive advantage of his with fellow block makers, the comparative advantage has eventually worked in his favour arising from the increased turnover due to larger demand in his cement supply business. Obviously, it is fair to assume that the marginal rate of return, on an extra bag of cement sold, exceeds that on an extra block sold, thus ensuring that the opportunity cost has worked in his favour.

It is not certain that as Mr. A embarked on his mentorship of his network of block-makers, he envisaged the sound underlying dynamics of this initiative. Having heard about his story and the nature of person that he is, my guess is that this was not on the radar. His focus was more about doing social good and contributing to enduring business models. However, actions such as that taken by Mr. A, which fall under a category of business initiatives known as “social entrepreneurship”, have increasingly come to be seen as effective and highly-rewarding business strategies, in their own right.

In all countries, economic growth is directly influenced by key social indicators such as a strong real sector; the rise of the middle class; and the stable growth of a corps of small, medium scale enterprises capable of providing employment at the grassroots. In countries, like Nigeria, where the government has been slow to awaken to its fundamental responsibility of enabling sustainable economic growth, the concept of social entrepreneurship needs to be promoted within the civil society. It is a truism that before there was government, there was man and his community, and so while we await the awakening of Leviathan (the government), man can and should foster ways of sustainably serving his community, and in so doing, himself.

UWA OSA-OBOH