Updated: Sep 12, 2020

New Path to Economic Freedom?

Lately, entrepreneurship has become a buzzword in development lexicon largely driven by the need to define alternative approaches to age-old problems such as extreme poverty, unemployment, and economic inequality.

The theory of change for entrepreneurship focuses on empowering people to take charge of their own livelihoods as opposed to formal employment in order to avert the widely acknowledged side effect of economic dependency.

As someone who has worked in this space for the last 8 years, I am well aware of the need for such a paradigm shift in the development sector as well as the opportunities and challenges that have come with the renewed focus on social entrepreneurship.

I started my career at Ashoka, the world’s pioneer in the field of social entrepreneurs. Founded more than 30 years ago, Ashoka pioneered the social entrepreneurship movement by identifying, supporting, and promoting the work of social entrepreneurs (Ashoka Fellows) across the world.

I feel lucky to have led a similar effort in Kenya and the greater East Africa region, on returning from the US in August of 2013. Thereafter, I led the effort to launch the Impact Hub Network in 5 African cities: Nairobi, Addis Ababa, Bujumbura, Kinshasha, Lubumbashi, and Freetown. One of the biggest effects of the social enterprise movement in the development sector been the “Democratization of opportunity through Entrepreneurship.” Using development money to fund startups and social enterprises, donors unlock rare opportunities for (young) people to try their hand in entrepreneurship, even if they are not keen on building unicorns. And as a result young people in countries that receive large amounts of donor funding, Kenya included, prefer to start their own businesses over seeking employment.

Tweet this: 48% of Kenyan youth would like to go into business

As a concept, social entrepreneurship plays a greater role in promoting the ideal of using business to solve society’s biggest problems. This stems from the undeniable fact that the 2008 global economic crisis prompted many of my Generation to develop a moral distaste for business as usual. Yet, as with everything else in life, social entrepreneurship is no magic bullet for addressing the numerous challenges that face the international development sector.

Ory Okolloh, one of Kenya’s best-known tech investors, warned against the fetishization of entrepreneurship thus: “We can’t entrepreneur our way around bad leadership. There is growth in Africa but Africans are not growing.”

Personally, I have often found myself wondering, what really, is the purpose and promise of the social entrepreneurship movement, particularly for the (young) people it purports to empower?

As an insider, I am well aware of the hidden challenges facing organizations in this space. Problems related to donor funding cycles, poor ethics, and governance, talent mismanagement as well as impact measurement and reporting are way more prevalent in the sector than many would admit.

Personally, I believe that there is a dire need to shift the focus of social entrepreneurship movement away from semantics and surface-level definitions (eg. social enterprise vs. social entrepreneurship), and towards the role of values and principles in business.

Bill Drayton, the founder of Ashoka, defines social entrepreneurs by their core ambition or motive: "to solve a social problem that they know deeply well and that affects a real person or group of people." You are not a social entrepreneur because you feel like it, or because someone defines you as such. One of the biggest challenges facing social entrepreneurs, and one that gives a clue to the true promise of social entrepreneurship, is the issue of talent management. Social enterprises struggle to find, attract, and retain top talent even as the demand for meaningful and purposeful work continues to spike.

While the "social enterprise" brand identity sends the right signals to the talent market, many companies/organizations in this space have no idea how to turn that brand collateral into a high-performance team/organizational culture. This in turn leads to burnout, disengagement, and ultimately high staff turnover.

In other words, social entrepreneurs may (and often do) put their users/customers/beneficiaries first, but fail to do the same for their employees. Ironically, this is the one thing the tech industry does way better than everybody else. Obviously, it is difficult to invest in your team when donors want 90% of their funding to go directly to the beneficiaries. And this is where social entrepreneurs get stuck: You start with donor funding, often won through a startup competition, and before you know it you are building an organization/company that THEY want - not the one that YOU envisioned!

To experience the full promise of social entrepreneurship, which I'd describe as the value of “people first,” we have to embrace a values-based approach to entrepreneurship.

As the Kenya Youth Report indicates, the majority of Kenyan youth prefer to go into Entrepreneurship, but a whopping 35% said they would easily take or give a bribe in order to survive.

The writing is on the wall: “There is no doubt (that) we have a huge reservoir of corrupt or corruptible youth in this country.” Alex Awiti, Director of the East African Institute. “And they have a penchant for impunity.”

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