The rise of the social entrepreneur - China Dialogue
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The rise of the social entrepreneur

A new breed of business leader is pioneering new technology, value and business models, says John Elkington. Environmentalists are starting to view the market not as the enemy, but an effective listening device for understanding people’s needs.

At a time when the United States is in deepening trouble, not only with the continuing war in Iraq, but also the gathering recession and Wall Street in disarray in the wake of the sub-prime meltdown, it is worth remembering what made the country great. As I flew to Santa Barbara, in California, a few weeks back to take part in the first Wall Street Journal conference on the greening of capital markets, I recalled the 1969 Santa Barbara oil spill, which did so much to light the fuse of citizen action and modern environmentalism. I also reflected on how late the Journal was coming in to the game. Indeed, it is striking that such a great business newspaper has allowed itself to become not a leading but a lagging indicator of change. 

As leading CEOs like Jeffrey Immelt, of General Electric, and Lee Scott, of Wal-Mart, took the stage to discuss how they are increasingly trying to build sustainability considerations into their strategies, at least one Journal editor kept wading into the audience in an attempt to get the assembled business leaders to say that they thought all of this greening was misguided and a huge threat to shareholder value. It soon became clear that they didn’t think this way, no matter how much the Journal and the current US government might like to believe. And it also quickly became clear that they largely supported what the likes of Immelt and Scott are trying to do.

What makes America great is its capacity to ride the great waves of scientific, technological and economic change. On the flight to Santa Barbara, I read an extraordinary book on the life and work of the economist Joseph Schumpeter, who came up with the idea of “creative destruction”. I am increasingly persuaded that we are seeing a new wave of creative destruction hitting the developed world, partly driven by new technologies, but also by growing concerns around energy security and climate change.

These great waves of change are rarely driven by big, incumbent companies. Indeed, General Electric is a rare beast, since it was a major listed company in 1900 and still survives and thrives today. Most of the other companies that proudly headed the most successful business lists at the dawn of the twentieth century are long since gone. Instead, the people who drive the processes of change that periodically reshape the American mindset and economy are the scientists, technologists and entrepreneurs who have created companies like Intel, Apple, Microsoft, Amazon and Google. 

Like the industrial giants of a previous age – people like John D. Rockefeller, Andrew Carnegie and Henry Ford – some of the New Economy pioneers have become billionaires. More importantly, they have started to bring their new thinking about technology, value and business models to bear on new areas of enterprise as they begin to invest in the work of social and environmental entrepreneurs. The co-founder of eBay, Jeff Skoll, is one of these people, and he was very much in evidence in March at the fifth Skoll World Forum on social entrepreneurship, held at the Saïd Business School in Oxford. 

At one point, Skoll introduced former US vice-president Al Gore by recalling the foreword Gore had written in 1992 for a new edition of Rachel Carson’s paradigm-shifting book Silent Spring, published three decades earlier in 1962. At the time, Skoll noted, Carson was described as “hysterical” by the chemical industry and some of the scientific community. In very much the same way, many of the social and environmental entrepreneurs assembled in Oxford have been described as “crazy,” even by their family and friends, because they propose solutions to problems that most people see as insoluble.

These are the extraordinary people who we spotlight in our new book, The Power of Unreasonable People. With my co-author Pamela Hartigan, I believe that the focus is shifting from corporate citizenship strategies to a wider set of solutions that will require close partnerships between leading entrepreneurs, mainstream business and financial institutions, government agencies and the wider (and increasingly powerful) citizen sector.

During the forum, SustainAbility led two sessions focussing on how social and environmental entrepreneurs can build successful partnerships with major companies. These sessions were developed in collaboration with the Skoll Foundation, the International Business Leaders Forum (IBLF) and IDEO, the international design company. The sessions were so successful that there were queues to get in, with even some leading entrepreneurs unable to gain entry.

There were queues too for the session with former US president Jimmy Carter and the closing session with Al Gore. Though there was a strong sense, as Skoll Foundation president Sally Osberg put it, that there are no “silver bullets,” there was also an extraordinary degree of optimism about the potential to bring the world of the best social entrepreneurs to scale.

At the time of the insecticide abuses, which Rachel Carson spotlighted, and of the Santa Barbara oil spill, environmentalists and most other activists were anti-business, anti-profit and, fundamentally, anti-market. It is striking how the mood has shifted in recent decades. As one speaker put it, markets are “the best listening devices” we have for understanding people’s needs. Many of the world’s biggest social, economic and environmental challenges exist precisely because there are market failures: areas where the economy is both deaf and blind. 

The third year of our SustainAbility’s Skoll Foundation-funded work on entrepreneurial solutions will switch from the social entrepreneurs (covered in our 2007 survey, Growing Opportunity) and their counterparts inside companies (who we spotlight in a new report called The Social Intrapreneur) to the potential future markets for the sort of solutions that an increasingly populous and carbon-constrained world will demand.

John Elkington is a founding partner of Volans Ventures (www.volans.com) and founder & director at SustainAbility (www.sustainability.com). He is also co-author of The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World (Harvard Business Press, 2008).

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