Why do scholars need to focus on the social impact of entrepreneurship apart from social entrepreneurship?
(posted on behalf of @Seham Ghalwash
Entrepreneurship should solve societal problems by bringing positive externalities that have societal implications. Accordingly, entrepreneurship creates both social and economic value. Indeed, entrepreneurship literature has provided an in-depth understanding of entrepreneurship and its contribution to economic growth across developed and developing countries. Yet, the literature overlooks how commercial entrepreneurship as a social multiplier solves societal challenges and still leverages unique opportunities that create economic wealth. There is a need to treat the social value of entrepreneurship as intentional action instead of seeing them as an unintended outcome of the commercial processes. Rethinking commercial entrepreneurship from a societal lens can provide new insights into entrepreneurship theory and practice within the societal context. @Shaker Zahra and Mike Wright address this research gap in their conceptual study published in the Journal of Management Studies entitled “Understanding the Social Role of Entrepreneurship.”
This study highlights the importance of examining the broader role of entrepreneurship, including social, environmental, and economic value, instead of only focusing on financial wealth. In a recent interview, Zahra says, “Well, this paper was born from another set of activities I was doing. I have written several papers on social entrepreneurship. One day, I was talking to Wright…, and I told him every time I investigate social entrepreneurship research, I feel we highlight the great (positive) contributions of entrepreneurship. So, we wrote another paper about the dark side of entrepreneurship, and from writing this paper, I said there is more to be said. What is the broader conversation about the social role of entrepreneurship? So, we started to work on this paper, and we tried to ask what the broader role of entrepreneurship is…”.
Zahra pointed out the novel approach and importance of their study, saying, “And as the study says in the first paragraph, almost every article written in the English language says that creating a business is a social activity, and that's a great social contribution because it can add wealth, it can create jobs, it can contribute to economic development… I don't doubt this at all. So, for me, that's almost an invitation for, you know, this is the great leader syndrome in which everything is right. I always look for the other side and say, OK, what's the counterbalancing thing?” Zahra continued his talk by explaining, “Entrepreneurs make contributions. But either because of their personality or circumstances, or their interaction, they do a lot of things that are also harmful. So, in the article, we talk a lot about some of these harms…What makes this study dear and near to my heart is the notion of the multiplier of entrepreneurship. We talk about each activity as, you know, a contribution to value creation. But we don’t investigate the other consequences; the derivative benefits from that. So, you create jobs. You also help pay taxes. You help improve the quality of life, and the school system is better. You know the community is better, and the quality of life in the community is better. The pool of labor force is better. So that's the kind of social multiplier I think is the contribution in my mind in terms of studying that social role of entrepreneurship”. Back in 2016, the proposal and discussion of this new line of thought created a buzz, as Zahra illustrated, “The notion of blended value or multiple created many reactions. The bottom line, we should recognize that not each venture will have to abide by this. But I think as a field, as a group of scholars, we should consider those multiple lines. There must be a saddle point or a balancing point between these. The truth is the economic system that we call capitalism does always not function well.
For this reason, the publication journey of this study was quite challenging, and Zahra told the story highlighting, “We developed the paper for the Academy of Management Perspectives, and it went through one round of review, and I was asked for a massive revision. And it was clear there was a serious ideological split in the article. So, we revised the paper massively, and we sent it back. It did not fly. The reviews got worse, and it became like, you know, this is like the debate about the role of business that is the result. So, we explored other options, I believe. And Mike was the one who was very good at navigating things. We submitted it to the Journal of Management Studies, and they thought it was fit for a point-counterpoint to start a debate”.
The review process was challenging, and the debate around the article after publication took some work. Zahra pointed out, “So anyway, it was a bumpy road. I think that was not the story. The story is what happened after publication. We went through the review; I got commentary from many people. Then I went to Strategic Management Society in Berlin, part of a session on social impact and how we define social impact. And I have never had that experience in my career, and I made a comment about how to capture the social impact of entrepreneurship, and some 20 people (many of whom were friends and frequent collaborators) raised their hands, and they were all taking extreme exception to this…”
Zahra concluded his talk by saying that we still need research that tackles entrepreneurship's social and environmental value. He said, “The field needs a more integrative, broader view. We are seeing all the issues about social justice, economic justice, and environmental justice. So, I feel that these are more of an invitation for us to think more broadly about blended value; by the way, you don't have to agree with any of these calls for social, economic justice, political, just to understand that the need for integration is greater than anything else right now. This is no way to undermine the importance of entrepreneurship in creating economic wealth and ensuring technological progress.”