Why Many Social Problems are Entrepreneurial Problems

Monday, April 18, 2011

All problems that have unknown elements are entrepreneurial problems which means they require entrepreneurial management. However, although we often think of startups as being entrepreneurial, many social problems have elements that are unknown, which means they are entrepreneurial problems. Unfortunately, often people don’t recognize social problems as entrepreneurship problems. Instead they believe that because a solution works in one context, it will work when applied in another context. However a different context introduces “unknown” into the equation and transforms it from a traditional problem into an entrepreneurial problem.

Why Many Social Solutions Fail

Let me use an example to illustrate why many of our solutions to social problems fail because we overlook that we are facing an entrepreneurial problem. Infant mortality represents a persistent problem in developing economies. In these regions, often infants die for the simplest of reasons, including, not being able to keep pre-mature infants warm. In developed economies this is a known problem with a known solution: we use incubators to warm premature infants until they are self-sufficient. Given what we already know, the natural solution seemed to be to provide incubators to developing economies and so a group of generous philanthropists and physicians donated millions in incubators. What most people overlooked was that despite seeming like a known solution, the geographic, economic, and cultural distance introduced a significant number of unknowns into the equation. Specifically, in practice, in developing economies these incubators were often far from where they were needed or broke down beyond repair without the service network we take for granted in developed economies. Although well intentioned, the incubator program provides a classic reason why large firms, social entrepreneurs, and entrepreneurs fail-they overlook the unknown and act on their assumptions.

Source: Forbes (link opens in a new window)

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