Wednesday, June 10, 2009

Social Entrepreneurship

This evening, I received an invitation to speak at a conference next April. Aside from thinking to myself--Gosh, that is a long time away--I have been thinking about the organization. I spoke at this organization's conference once before. I will probably accept the invitation again. The organization is called Unite for Sight ( I want to spend a little time thinking about social entrepreneurship.

A lot of the comments on my blog (at least on FB) have essentially been questions of whether we should leave things to private industry (or private charity) or regulate through the government. Social entrepreneurship is an interesting "in between".

Social entrepreneurship is using either charity or government dollars (most often charity) in ways that do not involve purchases to provide goods and services once. Rather, it represents money that is spent to build up capacity in a market. In the case of Unite for Sight, it is spending a money to provide incentives to develop the supply side of the market for some vision care services. For vision screening. For glasses--both for distance and for reading glasses. The key is that a market has not developed on its own but can exist. Resources need to be made available to bring the market into being to begin with.

Total "free marketeers" may still say--if the market is not developing on its own then we should just let things be. However, there are real limitations to markets operating efficiently all over the world. In the case of the mostly developing countries in which Unite for Sight and other similar organizations operate, there are failures in the market for credit to start businesses that charity can help to alleviate--but then will not be expected to continue providing. There are also failures in the provision of education for running facilities that charity can overcome.

We should consider for developing countries whether there are small market failures that small amounts of one time investment might help to alleviate and bring a private, self-sustaining market into being. If those who give money to charity want to make a sustainable difference, this type of intervention may be better than other similar interventions.

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