The question that often comes to most people’s minds about helping the poor is usually which concept is more ideal, traditional aid or social entrepreneurship. Answers may varies from one person to the next, but I think social entrepreneurship is better than traditional aid because traditional aid is to alleviate the immediate suffering rather than improving social conditions. On the other hand, social entrepreneurship is comprise of social entrepreneurs who act as the change agent in a society. Social entrepreneurs identify the problems in the society and improve the systems, invent new approaches, and create social values. Social entrepreneurship provides social value by creating innovative ideas and mutual beneficially exchanges. Furthermore, traditional aid works within given structures in society while social entrepreneurship creates opportunities for social structural change.
Refugees are created after a devastated natural catastrophe. Traditional aid will always be needed when there is a disaster to help the victims get back on their feet. Development aid can be used in developing countries to improve their economic or social development, but evidence shows that traditional aid cannot transform a society and help people out of poverty. Africa is a good example of the failure of traditional aid. Africa has received about one trillion dollars in traditional aid from western countries in the last century and they are worse than ever before. Most of the African aids are spent without understanding of Africa’s needs. Today, Africa is full of abandoned projects. They abandon the projects because most projects are in the wrong place, the factories are far away from the fuel supply, and the roads are not maintained. The purpose of the aid was to increase economic growth and reduce poverty. The aid that Africa received from western countries did not contribute to economic growth or reduce growth. Instead, it slowed down the growth and economic development by encourage corruptions, civil wars, and inflations. Countries that are less dependent on aid are better off. For example, Botswana and other South African countries are not relying on aid as much as the rest of African countries, and they are showing positive signs of economic growth and reduction poverty. The traditional aid make the recipient more depend and undermine self-reliance. In contrast social entrepreneurships help economic growth and reduce poverty.
Social entrepreneurship recognizes a society’s problem and provides new ways to solve the problems. They create products and services that a society needs. Social entrepreneurship’s goal is to create social value rather than making profit. In the world of goods, social entrepreneurship creates social value by sourcing products from artisans in third world and provide a market access in the first world to provide additional economic opportunities. In the employment stage social value can also be created. They can employ people who are unable to work or cannot get a job because of disabilities. An example of this can be the YMCA who employed many disable people to give them work and create social values. Social entrepreneurship also seeks for innovative ideas to help a society. For example, Delight, a company that has created affordable light for people who are in remote rural areas that don’t have access to electricity. Furthermore, Dr. Thane Kreiner, our guess speaker, talks about bringing light to a small village and also building a plan to provide electricity for the village. This give the people in the village access to electricity and at the same time create jobs for the villagers. There are many benefits to this idea because it can improve the villager’s living conditions. They can spend more time working and help to increase productivity.
Critics say that it’s immoral for enterprises to make money from the poor people who are living off of less than a dollar a day. It’s true that social entrepreneurship will make money because without revenue they cannot operate the plantation, but at the same time it’s promoting economic growth. Plantations are built to generate electricity for a village, which means workers are needed to work at that plantation. Villagers can work and have money to spend. When people have money to spend, they become more self-reliant less dependent on others e.g. traditional aid. Social entrepreneurship works best in Africa. Social entrepreneur can provide the necessity goods and services such as electricity. Once living conditions are improved the economy will improve as well.
In the long run, traditional aid is not sustainable as social entrepreneurship. Traditional aid makes the recipient become more reliant on the donor. Social entrepreneurship gives a better solution by creating social values and improving the system. Creating social businesses with the goal of serving the poor helps encourage economic growth and reduce poverty. Social businesses create jobs while at the same time, gives people solutions to their problems.