NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, October 18, 2013

Gauging the impact of a social entrepreneurship is not a hard science, but there are clear signs of when such an effort is on the right track.

The highest level of impact can be based on whether the entrepreneur changed a system, said Simon Stumpf, regional representative of Ashoka East Africa. A small operation in organic fertilizer or microhydro might not look as efficient as it could be, but an entrepreneur may have worked to get power purchase agreements so others can sell power to grid, for example.

Successful impact, then, is “if you are tackling barriers such that other people can follow behind you,” Stumpf said, pointing to M-PESA of Kenya — a mobile phone-based financial service — as an example of a smart enterprise that has made life easier for an entire country.

There are still more questions than answers surrounding the field — from how to start and how to balance a for-profit business model with social cause to how to measure impact. The very nature of entrepreneurship means seeking to solve a yet unanswered question and navigating uncertainty along the way.