The popularity of social enterprise—business with a social mission—is surging. MBA courses on the subject are oversubscribed and the number of social enterprises is growing around the world. But it’s hard enough to start a successful business; founding a social enterprise that must compete in the marketplace and create social impact is an even taller order.
The result of these two factors—the comparative disadvantage of social enterprises against businesses and the fact that social impact happens more through influencing others than through direct action—suggest that social enterprises themselves are likely to remain relatively small in financial terms.
Given that reality, how can social enterprises maximize their impact without having to achieve the financial scale that would make them major players in whole sectors of the economy? The answer lies in networks. Where one social enterprise may be limited in the impact it can have, a network of social enterprises can create opportunities for substantial financial scale and impact.
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