Social Innovation and Entrepreneurship-ENTE3534_2023_520
DR Samuel O.Olutuase
DMU
Thursday,26 January 2024
Introduction
A social issue or problem can be defined in simple terms as a wicked complex problem. Ventura (2023) defines a social issue as a condition that negatively affects a large number of people in a social setting. For instance, if an individual does not have access to enough resource in required proportions, then the fellow poor. Notably, the imbalance in social norms and policies leads to social problems such as gender inequality. Definitely, social problems occur due to the imbalance in social, economic and environmental factors. There are three entrepreneurial approaches that can be used to address these issues. they include the not-for-profit (NFP), hybrid or business-like not-for-profit (BL NFP), and for-profit (FP) approaches. Some of the pervasive and widespread social issues include poverty, hunger, social injustice, climatic change among other issues. This essay aims at analysis poverty as a social issue in entrepreneurial terms and the appropriate social entrepreneurship approach that can be used to eradicate poverty form the world’s population.
Social Issue Identified: Poverty
Poverty is one of the most pervasive and widespread social issues. It is notable that the impacts and the implications of poverty have traversed globally boundaries and it is contemporarily everywhere. Thurow (2017) defines poverty as a condition or state in which a community, family or a person lack adequate resources and necessities for a minimum living standard. Poverty deprives people of basic needs. Other social issues such as hunger and malnutrition are all aspects of poverty. For instance, if one cannot afford quality food with all the required nutrients for a health growth due to poverty, the individual may be susceptible to hunger and malnutrition. In other words, poverty is the root course of other social issues currently prevalent among the world’s population. Therefore, poverty is currently the most prevalent social issue affecting people from all continents of the world.
Analysis Of the Social Issue
Causes Of Poverty
Global poverty is attributed to a wide range of causes. These causes include lack of education, poor instructor, lack of employment, war and conflicts, change in climate among other causes. Ventura (2023) notes that generally the global rate of unemployment as per 2023 is about 200 million people, unemployment is of 5.8%. The rate unemployment is key determinant to the rate of poverty globally. War and conflicts lead to poverty since a lot of properties are destroyed during war. Niemelä, (2008), notes that there exists extreme poverty among individual with little or no education at all. Thurow (2017) notes that education is the great equalizer trying to reduce the galp between the poor and the rich. Reports shows that rate of literacy increases by 4% after every five year and it stand at 86% (Roser and Ortiz-Ospina 2018). Another cause of global poverty is climatic change. Flooding, for example, due to El Nino washes away crops and other resources leading to poverty. Many low-class communities rely of faming as the source of earning a living. Malawi, a country in Africa, is around 80% agrarian (Addae-Korankye 2014). Therefore, factors such as war and conflicts, lack of education and climatic change are likely to cause poverty.
Poverty in UK
In the financial year 2021/22, about 13 percent people were in low income before spending on housing (UK parliament 2023). Also, UK parliament (2023) affirms that 17%, around 11 million people of United Kingdom population were in absolute poverty after housing costs. 17% rate of poverty is very large for a country like the United Kingdom. This shows that poverty is everywhere and even the best economies of the world are not poverty resistant. According to UK parliament (2023) almost 4 million people within the United Kingdom population were experiencing poverty as per 2022. It is notable that the rate had increased to 61% from what was recorded in 2019 (UK parliament 2023). This increase in the rate of poverty implicates the pervasiveness and how serious the pandemic is in the United Kingdom. Out of the 4 million a quarter of them, about 1000000 were children (UK parliament 2023). From the indicated statistics, it is clear that poverty is a social issue and it I affecting the most people around the world. The United Kingdom is one of the best economies a in the world but form the reports, it is clear that there are traces of poverty among its population. Many people in the United Kingdom struggles to get basics needs. UK parliament (2023) confirms that these people rely on charities and food banks to survive. Hence, poverty is one of the most prevent social issues in the United Kingdom and measures need to put in place to curb the problem.
Global Poverty
Global poverty is among the most urgent social issues affecting the world. On a scale of $6. 85 the global poverty rate was at 46.9% recording an increase of 0.2% as per 2021 (The World Bank Group, 2023). This indicates that 44 million people in the entire world leaves in poverty despite all the efforts put in place to eradicate the pandemic. Viveros et al. (2023) Notes that the rate of poverty exhibits higher lines in sub-Saharan Africa and south Asia. Sub Saharan region of Africa is a marginalized region with most part of its parts being governed by semi deserts and deserts. Resources in these regions are inadequate and can sustain a living, people in these parts of the world survives on food aids and charities to earn a living. This affirms that poverty can be caused to adverse environmental conditions and climatic changes. Besides, farming is the most preferred way of income generation among the African countries (Addae-Korankye 2014). Any factor that affects framing will lead to poverty in such countries. Thus, poverty is everywhere and each country is experiencing an aspect of poverty though in varying dimensions.
As per April of 2023, around 1.2 billion people in 110 developing countries were estimated to be living in poverty (World Vison 2023). This shows that as per April of 2023, 19% of the world’s population was languishing in extreme poverty (The World Bank Group, 2023). Evidently, the results of fight against poverty tends negative as nations to put in more efforts to eradicate the pandemic. Global pandemics such as Covid-19 seem to sabotaging the fight and efforts purported to counter the prevalence poverty among the most population. Any aspect that affects the economic growth of the world such as wars and global pandemic leads to rise in the rate of global poverty. Entirely in the world, 9.2% around 700 million people leave in poverty surviving on less than $ 2.15 daily (World Vison 2023). This means that they cannot comfortably acquire all the basic needs. The little they earn can only allow them get food as they neglect the other basic needs. The youth and children account for about 2/3 of the poor globally (Viveros et al. 2023). The youth the children form the larger portion of the world population. It is obvious that poverty is a globally social issue pervasive in the society. Contextually, by 2030, it is estimated that almost half of the world’s population will be living in condition susceptible to poverty (Viveros et al. 2023). Indeed, poverty is one of the most prevalent social issues, however, there entrepreneurial approaches they can be applied to combat its pervasiveness. The approaches are not-for-profit (NFP), hybrid or business-like not-for-profit (BL NFP), and for-profit (FP) approaches.
Approaches To Address the Identified Issue
For-Profit (FP) Approach
Poverty can be eradicated from the society through the application the For-Profit approach. It is notable that the rationale underlying this approach if the capitalist perspective (Driver 2012). It is based on the foundations of productive entrepreneurship and its guiding constructs shared values. Remarkedly, this approach offers opportunities for entrepreneurs to developing new products upon social issues. Notably, alteration in economic and social state go hand-in-hand resulting in long-lasting financial sustainability (Shaw et al. 2013). Since for-profit approach offer room for both social and economic change and there is long term financial sustainability, it’s an appropriate approach that can be used to eradicate poverty (Smith et al., 2013). This is because the root cause is financial unsustainability. The rate of poverty will decrease drastically of a financially sustainable atmospheres nurtured in the society. Also, under this approach there are both social and economic goals operating in a win-win type of situations. Despite the fact that the underlying rationale comes from a capitalist view of social welfare, rooted to the idea of ‘productive entrepreneurship, the objective exists this point due the implication of some social goals being in play. These social goals for example the SDGs are directed towards addressing social issues.
The For-Profit entrepreneurial approach has its basis in the capitalist view of social welfare but its value for the society is initiated or maximized via the free markets. Presumably, the contest for economic self-interest by individuals via agents and not by centrally controlled government creates room for proper and enhanced ways of allocating scarce resources (Smith et al., 2013). This improved allocation of society resources is very viable and applicable in addressing the issue of poverty. Traditionally, this approach can be evaluated in terms of productive entrepreneurship, an entrepreneurship phenomenon whose foundation is on innovation, and also free form rent -seeking, corruption and tax-evading activities that are both destructive and unproductive in the society. (Acs et al., 2013). Porter & Kramer (2011); Shaw and de Bruin, (2013) affirms that capitalism can be promoted with focus on social issues even though the For-Profit approach is based on a capitalist nature which is rooted on the perception of productive entrepreneurship. And thus, applicable in addressing the social issues such as poverty.
Hybrid Or Business-Like Not-For-Profit (BL NFP) Approach
One of the best approaches that can be used to address persistent social issues like poverty is the hybrid entrepreneurial approach. This approach assumes a duality nature, it is like a business but then it is not-for profit. Nicholas (2006) notes that the predominance of the social mission
at the expense of other organizational goals is the first significant factor of a socially entrepreneurial endeavor. In other worlds, a social entrepreneur should have the interests of the society over other business-like objectives. The interest of the society could be implicated in addressing the issues that affects the society. It is notable that the under this approach, the social mission is the main goal, the mission to serve the society. This mission can be implicated various ways such as eradicating some social issues like poverty
Social missions, including means of solving social issues such as poverty, can be easily attained via business-oriented mechanism. This is because there is potential in nurturing self-sustaining means. This in essence allows individuals not to rely on donors or grants after start-up stages, they proceed without necessarily looking for support (SANTOS 2012). Notably, the hybrid approach can not realize it full potential by relying on the qualities of the social entrepreneur alone there must the combination of business mechanisms together with the efforts of the entrepreneur for the approach to be effective. Under this approach the social entrepreneur’s decision about how to structure the venture is an important one. In particular, it will affect how the venture can be financed, what rules and regulations the venture must adhere to, and how much control the entrepreneur has over the venture (Martin 2007). According to Yunus (2010) social business is not prone to lose thus able to take care of all applicable operational costs
. In addition, they are non-dividend meaning that all the revenue generated is reinvested in the businesses. It is noteworthy that investors can expect neither dividends nor interests back in the long run. An aspect of this approach includes the social enterprises. These are businesses that trade in order to tackle the major challenges we face in society (Nicholls 2010). They make money from selling goods & services in the open market, but reinvest their profits back into the business or the local community. Therefore, the approach can be applied in tackling social issues such as poverty
Not-For-Profit (NFP) Approach
This type of social entrepreneurship approach is exclusively social. This makes it appropriate in addressing the social issues. The aim of this enterprises is to trigger change in the social structure for the benefit of a broader community the main objective of the enterprises formed under this framework is to ignite change in the entire social structure to benefit the entire community (Drayton, 2006; Bornstein, 2007). Markedly, under this approach self-interested motives are minimized or absent and activity should not include value capture. This means the interest here are purely to serve the community. Serving the community can be evaluated in terms solving social issues such as hunger and eradicating poverty (Santos, 2012). Santos (2012) adds that other-regarding motives are emphasized and considered as primary. The degree at which some social issues such poverty has penetrated the society needs combined efforts. Society members should consider the needs of others and have the mentality of helping. This will significantly help in fighting poverty. The main customers for enterprises under are direct beneficiaries from the targeted social change (Drayton 2006). In addition, investors donors and grant providers including public bodies and CSR units within companies (Santos 2012). Therefore, this can be the best approach for addressing poverty issues in marginalized areas such the sub-Saharan region of African where no economic activity can be sustained as a result of adverse climatic conditions.
Conclusions
From the analysis, the best entrepreneurial approach address global poverty is the For-Profit approach. This is because entrepreneurial activities under this framework can be evaluated in terms of productive entrepreneurship, an entrepreneurship phenomenon whose foundation is on innovation, and also free form rent -seeking, corruption and tax-evading activities that are both destructive and unproductive in the society. . Corruption can be termed as the root cause of financial struggle in the society. Besides, it can be argued that corruption is the reason where there is a wide gap between the poor and the rich in the world. And also, corruption has contributed by a vast degree to the unequal distribution of scarce resources in the society leading to escalation of the rate of poverty. Corruption serves to ensure that the rich remain to be rich and the poor remains poor. Some countries are poor since there exists a lot of tax evading activaties ongoing. Thus, any approach that target eliminating corruption in the society and intensify revenue collection is likely to serve the world form poverty making the for-profit approach the best in this case
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