The history of social enterprise

The term “social entrepreneurship” dates back to 1953. Back then, the word did not refer to entrepreneurs whose primary mission was social. Nor did such social enterprises exist, or hardly exist at all. They would not emerge in a big way until the 1990s and grow into a major international movement.

Ordinary entrepreneurs take social responsibility (1950s-70s)

Howard Bowen was the first to use the term “social entrepreneurship. In his book Social Responsibilities of the Businessman (1953), he described “social entrepreneurship” as the commitment of entrepreneurs to their employees and society. That commitment would not be exceptional until the 1980s. A family business like Phillips thought it quite normal to also create all kinds of facilities for employees and the community, such as housing, schools and sports clubs.

Companies primarily pursue higher shareholder value (1980s)

In the 1980s, more and more companies followed a less social norm. Their mission was now to make their shares worth as much money as possible. To do this, among other things, they limited their spending on society and environmental protection; that was something the government and the middle class could care about. Meanwhile, the Club of Rome published The Limits to Growth, the first major step in public awareness that the earth is exhaustible. Many companies had little regard for that at first.

Social enterprise gets world-improving position (1990s)

Thanks in part to Harvard professor Greg Drees, the development of social entrepreneurship took a step forward. He framed social enterprise not so much as an alternative to maximizing shareholder value. Rather, he saw it as a means to improve the world. In solving major social issues, such as poverty and inequality, he believed social enterprises could often be more effective than social activists and charities.

The international movement around social enterprise is growing (00s)

More and more people began to see social enterprise as a means of improving the world. And more and more social enterprises saw the light of day. A growing international movement emerged around social entrepreneurship, which aims to make the ecosystem as favorable as possible for social entrepreneurs. This movement is now visible in almost all countries, including the Netherlands, and since 2011 has received a boost through the Social Business Initiative of the European Union.

Social entrepreneurship takes off in the Netherlands (years 10)

The Netherlands is a late-bloomer: the term “social enterprise” only became widely known here after the launch of Social Enterprise NL in 2012. General recognition came through a study by the Social Economic Council in 2015; by now it has become a very normal term. The social enterprise sector is on the map and growing by 10 percent a year according to both research firm McKinsey as the Social Enterprise Monitor.

The coming years

According to McKinsey, social entrepreneurship is now entering a phase of professionalization and will reach a form of maturity before 2025. The prerequisite is the further development of the ecosystem in which social entrepreneurs work: there needs to be a standard way of measuring impact; the sector needs to become more attractive to professional management and talented entrepreneurs; investors need to look at more innovative investment opportunities, and governments need to implement national and local incentive policies. We work on this every day, and we see very good results. PWC also sees these developments, according to their 2018 report.