Thomas Jefferson High School for Science and Technology
1st Place, Virginia
Entrepreneurs and Our Future
Change. It is a simple word, but a powerful idea. Our nation is in a constant state of flux where change is constantly pushing us towards new horizons and goals. Entrepreneurs are the individuals who drive this change, coming up with new ideas to spur the world onward into uncharted territory. Business entrepreneurs are the classic entrepreneurs, people who start their own companies to fill an unmet need in society. Social entrepreneurs, on the other hand, use the same business principles but in the pursuit of social improvements (“What is a Social Entrepreneur?”). Both types are very important to our modern day society. However, while social entrepreneurs will continue to be vital for alerting the public to societal issues, only socially motivated business entrepreneurs will have the power to implement change to improve life in the United States over the next decade.
It is true that social entrepreneurs have always been, and will continue to be, extremely important for bringing issues into the public eye. Social activists like Susan B Anthony and John Muir were incredibly important in the women’s rights and conservation movements, respectively. Only individuals such as these, with incredible passion and leadership skills, are able to form movements to educate society about major issues. Education is the first step to reform, and social entrepreneurs are the most important people in the education process.
Despite the importance of social entrepreneurs, however, they simply cannot muster the necessary amount of power to put change into practice. When it comes to improving life in the United States, there are three options: implementing change on a citizen-by-citizen level, passing reform legislature, or utilizing the economy. Social entrepreneurs are gifted leaders who can rally other concerned individuals around their cause. The strength in social and environmental movements therefore lies in the number and organization of the people involved. History demonstrates that most movements led by social entrepreneurs use the first two methods to generate change: encouraging every individual to do their part, or petitioning the government to support their cause through public policy. Yet in our modern day society, neither avenue is adequately effective. First, the sheer scale of American society today greatly reduces the probability that a majority of people will act on an issue. How can you prod every American to stop buying products that use palm oil and cause massive deforestation? Even if you spread the message to everyone in the nation, only a small percentage would care enough to change their actions, citing apathy towards the rainforests or difficulty in finding alternatives. Second, our government has become largely ineffective in solving our problems. The current political gridlock in Washington, DC makes passing any policy innovation a struggle. It is extremely unlikely in our current state of affairs that a bipartisan majority can be brought together to affect public policy regarding a major issue. What solution remains? Economics.
Social entrepreneurs are often able to amass a huge amount of people power; what they lack, however, is the money to back it up. Since their inception as official legal entities 60 years ago (Hall 32), non-profit charitable organizations have become the cornerstone for social entrepreneurship efforts. These organizations are tax exempt and pull in tax-deductible donations from a variety of philanthropic givers, allowing them to pursue their societal missions. However, the major downfall of nonprofit organizations is their reliance on donors. Organizations can be doing incredible work to benefit society, but without the ongoing support of their donors, they will flounder. This challenge severely limits their growth and abilities. Finally, in come the businessmen.
Business entrepreneurs have both the power and the will to rapidly improve life in the US. While social entrepreneurs can identify problems, business entrepreneurs are able to use economic means to create solutions. One of the major tenets of our nation’s political philosophy is our faith in capitalism, and we highly value business competition and a free market system. Businesses have continually advanced America throughout history while also serving the purposes of their entrepreneurs: they sent railroads across the nation, made automobiles available to everyone, and created the personal computer, among a plethora of other contributions. We can thank the Human Genome Project for setting the baseline for personal genomics, but now business entrepreneurs are bringing this powerful technology to the masses through personalized medicine. Plus, socially and environmentally responsible products sell. Whole Foods, Chipotle, Starbucks, and TOMS Shoes are all examples of companies that are known for their positive impact, and gain a public relations boost as a result. The examples are endless, but the basic principle is the same: when business entrepreneurs find a new niche or area for improvement in society, they pursue it, and America prospers as a result.
A number of business practices are escalating the ability of business entrepreneurs to positively impact society. One of the biggest trends in recent business practices has been the shift towards the “triple bottom line,” a phrase coined by John Elkington in 1994 ("Triple Bottom Line."). Rather than focusing solely on bringing value to shareholders, entrepreneurs who subscribe to the triple bottom line ideology focus on people, planet, and profit, considering impacts to society and the environment to a relatively equal extent as wealth. Not all entrepreneurs with this belief act overtly; one study found that out of 200 for-profit “social ventures,” only 40% explicitly marketed their social objectives to customers, the other 60% preferring to pursue social and environmental change internally (C Clark 15). Until recently, the legal system did not recognize this practice. Now, however, a proliferation of business labels are springing up that emphasize this principle, the two most notable of which are L3C’s and B corporations (Pink 23). Low-Profit Limited Liability Companies, or L3C’s, are a cross between non-profit and for-profit organizations. The primary goal of an LC3 is to promote educational or charitable causes, but they are also permitted to produce profit ("Low-Profit Limited Liability Company."). B corporations (or benefit corporations) are more business focused, but must meet third party standards for their commitment to creating “a material positive impact on society and the environment” (W Clark). Pieces of legislation to create these two new legal classes are being introduced in states across the country as more organizations fall under these labels, and the explosion of businesses subscribing to the triple bottom line ideology is cause for optimism about the power of business entrepreneurs to positively impact society.
Many business entrepreneurs go above and beyond their own companies to affect positive change, resulting in an entirely new generation of technophilanthropists invested in improving society using the wealth of their business careers. Peter Diamandis and Steven Kotler, in their book Abundance: the Future is Better than You Think, make a convincing case for the new generation of philanthropists (132-139). Wealthy young business entrepreneurs have become the financial foundation for the efforts of social entrepreneurs worldwide by investing in practical, self-sustaining solutions. Without these former or current business owners, social entrepreneurs would lose their cash flow to implement change. With economic geniuses like Bill Gates of Microsoft and Pierre Omidyar of eBay, however, social entrepreneurs are able to create long-term organizations that work in smarter ways to fix issues. Rockefeller and Carnegie may have been philanthropists in their older years, but these new game-changers are richer even younger in their lives, leaving more time for making huge impacts in society.
There are numerous examples of successes achieved by social entrepreneurs, but ultimately it is the business entrepreneurs who develop lasting solutions to problems. Social entrepreneur Kim Wasserman and the Little Village Environmental Justice Organization successfully campaigned to shut down two extremely dirty coal-fired power plants near her community in Chicago in 2012. Wasserman’s passion and commitment has made her a worldwide environmental leader and a recipient of the 2013 Goldman Environmental Prize ("Kimberly Wasserman."). Other efforts such as the Sierra Club’s Beyond Coal Campaign are doing the same thing in cities across America (“Beyond Coal.”). However, without new, clean methods of electricity generation, shutting down coal plants means shutting off the power for much of America. This is where business entrepreneurs come into play. Through innovative technologies and business models like Lyndon Rive’s SolarCity ("Solar Panels, Solar Power..."), business owners are exploiting the market for clean energy solutions, thereby generating profit while pursuing societal and environmental impact. The transmission, storage, and use of our energy are all areas requiring vast improvements in efficiency, and business entrepreneurs are leading the wave.
American entrepreneurs have always been innovators and game-changers, and will continue to be as we move into the future. When the choice arises, however, it will be business entrepreneurs who make the most difference. Their economic methods of improving society are much more effective than the best social entrepreneurship techniques, and their commitment to solving social and environmental issues is only growing. As a nation, we should remain optimistic about our future, with the knowledge that business entrepreneurs will continue to improve our lives and build a better world.
"Beyond Coal." Sierra Club National. Sierra Club, 2013. Web. 06 Nov. 2013.
Clark, Catherine H., and Selen Ucak. For-Profit Social Entrepreneur Report. Rep. Research Initiative on Social Entrepreneurship, Mar. 2006. Web. 6 Nov. 2013.
Clark, William H., Jr., and Larry Vranka. "Benefit Corporation White Paper." Benefit Corporation Information Center. B Lab, 18 Jan. 2013. Web. 06 Nov. 2013.
Diamandis, Peter H., and Steven Kotler. Abundance: The Future Is Better than You Think. New York: Free, 2012. Print.
Hall, Peter D. A Historical Overview of Philanthropy, Voluntary Associations, and Nonprofit Organizations in the United States, 1600–2000. Rep. Harvard University, 2006. Web. 6 Nov. 2013.
"Kimberly Wasserman." The Goldman Environmental Prize. Goldman Prize, 2013. Web. 6 Nov. 2013.
"Low-Profit Limited Liability Company." Corporations: Starting an LLC. Vermont Secretary of State, n.d. Web. 06 Nov. 2013.
Pink, Daniel H. Drive: The Surprising Truth about What Motivates Us. New York, NY: Riverhead, 2009. Print.
"Solar Panels, Solar Power Energy Systems & Energy Efficiency." Solar City. Solar City, 2013. Web. 6 Nov. 2013.
"Triple Bottom Line." The Economist. The Economist Newspaper, 17 Nov. 2009. Web. 06 Nov. 2013.
"What Is a Social Entrepreneur?" Ashoka. Ashoka, n.d. Web. 06 Nov. 2013.