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Is Social Entrepreneurship a Bad Fit for the US Economy? Harvard Business Review Says Maybe

Scott Cooney | Friday July 2nd, 2010 | 3 Comments

In a recent Harvard Business Review Article, Timothy Ogden made the case that the U.S. is out of touch with Social Entrepreneurship.  His basic premise?  Social innovations created by the rich, intended on helping the poor, are bound to fail. 

Ogden, citing such lackluster American-borne social enterprises as One Laptop Per Child, says that there’s an “unrecognized truth of social entrepreneurship and innovation.  The United States isn’t a leader; it’s a laggard.”   The article begins and ends with the story of one of the most successful, at least in a public relations way, cases of social entrepreneurship:  William Kamkwamba, a Malawian youth who built a functional wind turbine from trash using a decades old textbook, for less money than the average American 8th grader’s allowance. The conclusion from this and other related stories of successful social ventures from the developing world for the developing world is that a true understanding of need can be better attained by those in the who deal with scarcity and need in a way that Americans couldn’t hope to understand.

Not to take away from the incredible rise in green business in the U.S. and elsewhere, the article nevertheless makes a fairly credible case for a shifting of roles in the U.S.  Instead of training entrepreneurs, Ogden argues, the U.S. and other wealthy nations should be focused on being Venture Capitalists for true social innovators in poor countries.  Despite years of training programs like SCORE and the SBA, rates of failure among entrepreneurs in the U.S. have remained steady.

It’s an interesting argument.  With U.S. money and advising, combined with developing world innovation, a powerful force for positive change could likely be achieved.

Scott Cooney is the author of Build a Green Small Business:  Profitable Ways to Become an Ecopreneur (McGraw-Hill), and Principal of GreenBusinessOwner.com, a green business incubator and membership website.


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  • http://www.rebinder.com Brant Williams

    I got all excited to read this article, then was let down when I clicked through to the real piece. I find the Oxford editorial short-sighted and ignorant of platform-based innovation. Grameenphone is based in the US, run by George…a good guy, and American. Unitus (a US-based NGO) has provided the backbone strategy (and funding) to get hundreds of MFIs going – to the tune of 15MM loans being made through their system. Just because the lightbulb goes off on the ground (where the demand is), the structural and economic developmental systems are orders of magnitude more evolved in the US then most other places.

    The article makes a number of points…they just are wrong IMnotsohumbleO. If he had some cred – like he was at one point an entrepreneur himself or otherwise tried to innovate and take it to markets on the other side of the world – before pointing fingers from his lounger with leather-bound books and a room that smells of rich mahogany.

    At the end of the day, entrepreneurship is not making one thing, or even 4. It's the systems, capital and will to take that one thing, and distribute/sell 4 million of them to reach a better end.

    While fun and controversial, totally short sighted.

  • http://www.rebinder.com Brant Williams

    I apparently wrote Oxford and meant confused with Harvard. Sorry Great Britain – I should have known better. I do love the HBR, and many of Ogden's thoughts…just not these ;-)

  • http://www.divaentertains.com/birthday-favors.html Shine

    IMO, any initiative in helping the poor will never totally fail. It might not be successful but I’m sure it helped even at least 1 poor person and it’s worth the effort.