Sunday, February 12, 2012

SOCIAL ENTREPRENEURSHIP: The 4th Sector, The Citizens Sector

Something is in the air. Something’s changing, and this change is happening at a faster and faster rate. Every country I visit I can see it. Some days it’s difficult to see because I can see all the problems and issues around me. But most of the time I’m overwhelmed by an emerging field—no a movement, maybe even a tide-changing way of thinking that is taking the world by storm.

Looking at David Bornstein’s research (“How to Change the World,” 2004), former Rockefeller Foundation President Peter Goldmark was quoted as saying, “it’s got to strike you that a quarter of a century ago outside of the United States there were very few NGOs and now there are millions of them all over the glove.” For the moment, let me refer to these groups as citizen organizations. Let’s look at a few growth patterns of this citizen group sector as cited by David 2004.

Indonesia – 20 years ago only 1 independent environmental organization; now over 2,000

Bangladesh – all development work handled by 20,000 NGOs, almost all of which were started in the past 25 years

India – over a million citizen organizations

Slovakia – more than 12,000

Formerly Communist, Central European countries – between 1988 and 1995, 100,000 citizen groups opened

France – an average of 70,000 new groups started each year in the 1990s (quadruple the 1960s rate)

Canada – since 1987, the number of registered citizens groups has grown by more than 50% to about 200,000

Brazil – underwent a 60% increase in citizen groups from 250,000 to 400,000 in the 1990s

U.S. – saw a 60% increase in IRS-registered public service groups from 464,000 to 734,000 between 1989 and 1998; 70% of registered groups are less than 30 years old
According to Bernstein some groups estimate that Brazilian has over 1 million citizen groups and U.S. has over 2 million.

Globally – the number of registered international citizen organizations increased from 6,000 to 26,000 during the 1990’s

Something is happening. I repeat; something is happening. Historically, these groups were negatively defined and still are somewhat today. We know them as nongovernmental organizations, not-for-profits, or non-profits. But over the past 20 or so years they have gained positive names such as the “independent sector,” the “third sector” (a term Bornstein favors), the “fourth sector” (term I favor over the 3rd sector), the “citizens sector,” and more.

Bornstein lists 6 reasons they are new.

1. It’s happening on a scale never seen before.

2. This is global phenomenon; the organizations encompass more global diversity and dispersion than ever before.

3. There has been an increasing shift to systemic changes and approaches and not management approaches (an example would be addressing root causes of poverty instead of simply managing it so that it is always here).

4. Citizen organizations are less burdened by regulations than the church and state and have the power to exert great pressure on governments (International Campaign to Ban Landmines, creation of the Criminal Court, the Lord’s Resistance Army Disarmament and Northern Uganda Recovery Act, etc.).

5. They are changing the nature of the game, forming many different types of nuanced hybrid social-impact organizations, and forming alliances with businesses, governments, and academia as they create new markets.

6. As with any new field in which competition and innovation are key, with the opening and emergence of a “new” citizens sector, these organizations are benefiting from entrepreneurialism, high levels of competition, massive collaboration, and increased focus on performance.

The last point cannot be underscored enough. It used to be the case that efficiency and excellent management were found only in the private sector. However, with increased focus on the citizens sector and the vying for position within the field, many of these socially entrepreneurial organizations are having to prove their efficacy and increase their effectiveness. (Social entrepreneur Dan Pallotta believes you should be able to get rich doing charity work). In this growing field, remaining sluggish and conducting business as usual is not a safe stance. This is because the field is awash with active, energetic and most importantly innovative social entrepreneurs looking to push further, affect more people, and challenge the status quo. So this introduction of competition and entrepreneurialism is creative a hot bed of social innovation within the citizen sector unlike we’ve ever seen before.

Now there are a number of reasoned and theorised causes for all of these changes, and if you like I can write about some of them and explain a few I’ve seen or experienced in another update. But at the moment, I want to talk about what it means to be a social entrepreneur. It can be a confusing term, and it’s not a very easily usable or definable label.

The word “entrepreneur” entered the English language from Jean-Baptise Say to charaterise a particular economic actor that doesn’t just start a businesses but shifts economic resources from an area of lower productivity to one of higher productivity. Joseph Schumpeter says the entrepreneur is the source of creative destruction necessary for major economic change.

A social entrepreneur is therefore a transformative force, a person who doesn’t take no as an answer as she moves toward disrupting the status quo to propagate a socially beneficial idea. Social entrepreneurs tend to deal with systemic change creating mass behavior change, not able to rest until they have fully attacked the problems they address. Let’s do a quiz. It should be easy, they are mostly yes-no. :-)


1. Was Steve Jobs a social entrepreneur? (Is Jobs the world’s greatest philanthropist?)
2. Was Leonardo da Vinci a social entrepreneur?
3. Was George Washington Carver a social entrepreneur?
4. Was Emily Dickinson a social entrepreneur?
5. Was Henry Ford a social entrepreneur?
6. Is Barbara Bush a social entrepreneur?
7. Was Benjamin Franklin a social entrepreneur?
8. Is J. K. Rowling a social entrepreneur?
9. Is Jeremy Lin a social entrepreneur?
10. Is Vandana Shiva a social entrepreneur?
11. Was St. Francis of Assisi a social entrepreneur?
12. Name 3 social entrepreneurs today.

This is a global phenomenon, and the most creative problem-solvers are outside the US, Canada, and the UK. This is often because more creativity is required when there are fewer resources. Hundreds of schools are now offering university programs and degrees in social entrepreneurship—some in business schools, others in medical schools, still others in engineering schools. Hundreds of organizations have arisen to nurture social entrepreneurs and incubate their organizations. There are social venture capitalist organizations now. Some consider the best thing we can do is to continue to create supports and bolster up a social climate conducive for the growth of social entrepreneurs because they are creating a base of energy with which we are slowly solving some of the world’s toughest challenges. By shifting the work and attitude of businesses and creating opportunities for the involvement of citizens, the emergence of the citizens sector is changing the way problems are solved all over the globe.

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