All Entrepreneurship Is Social

Article excerpt

Let's not overlook what traditional entrepreneurs contribute to society by carl schramm

OVER THE PAST decade or so, the term social entrepreneur has become a fashionable way of describing individuals and organizations that, in their attempts at large-scale change, blur the traditional boundaries between the for-profit and nonprofit sectors. Given the ceaseless appearance of innovations and new institutional forms, we should welcome a new term that allows us to think systematically about a still-emergent field.

One danger, however, is that the use of the modifier social will diminish the contributions of regular entrepreneurs - that is, people who create new companies and then grow them to scale. In the course of doing business as usual, these regular entrepreneurs create thousands of jobs, improve the quality of goods and services available to consumers, and ultimately raise standards of living. Indeed, the intertwined histories of business and health in the United States suggests that all entrepreneurship is social entrepreneurship. The pantheon of model social entrepreneurs should thus include names such as railroad baron Cornelius Vanderbilt, meatpacking magnate Gustavus Swift, and software tycoon Bill Gates.


Rsople tend to think that advancements in health care, for example, are the achievements of either government or the social sector. More recently, they note how the work of social entrepreneurs is improving population health, particularly in developing countries.

Yet the experience of the United States demonstrates that business entrepreneurs have done as much - if not more - for American health in the past century and a half as did medicine or public health. In the middle of the 19th century, most of the U.S. population was ridiculously poor by today's standards. Americans not only had low incomes, but also spent the bulk of their money on life's basics: food, clothing, and shelter. What they purchased, moreover, was of questionable quality. Because there was no refrigeration or ability to transport foods over long distances, most people subsisted on a kind of stew that, by all accounts, was simple and tasteless. A poor diet meant poor nutrition, which meant poor health.

Clothing was also neither plentiful nor desirable. With little production of new clothing, the average American wore the same clothes over and over again. And they seldom washed these clothes - or themselves - because they lacked indoor plumbing. This was not the only failing of American homes: They were often poorly ventilated, meaning that most people's lungs labored to breathe air made dirty by cooking and heating fires.

Because of these poor conditions, Americans' lives were short, and their deaths were usually caused by disease. Yet since 1850, life expectancy for Americans has risen remarkably quickly, from below 50 years to 78 years today. Likewise, annual mortality rates have plummeted, from around 23 deaths per 1,000 people in 1850 to eight in 2009, with infant mortality markedly falling. Meanwhile, infectious diseases have receded as a primary cause of death.

Many factors played a role in these changes, from improvements in sanitation to upticks in education. (The practice of medicine played a noticeably small role here and, in fact, probably did more harm than good for many years.) But one important factor is often overlooked: the increased consumption of higher-quality goods and services. As entrepreneurs invented and distributed these improved goods and services, they deserve considerable credit for the rise in Americans' health and longevity.


One innovation that fueled prosperity, well-being and further innovation was the American railroad system. The spread of railroads in the igth century permitted something nearly unprecedented in human history: conquest of the weather. Better movement of people and goods reduced the vulnerability of the population (especially in rural areas, which still dominated the country) to cyclical vagaries. …