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The Hybrid Middle Ground in Contemporary
Entrepreneurship: A Conceptual Discussion
with NYC-Based Clean Technology
Enterprises as Cases in Point
Bala Mulloth, PhD, Central European University Business School June 13, 2012
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Overview
Changing Sources of Innovation
Diverse Forms of Entrepreneurship
Social Entrepreneurship Overview
Social Venture Models
Overarching Representation of Contemporary Entrepreneurship
Research Approach
Illustrative Cases: The NYC Cleantech Sector
Observations + Discussion
Changing Sources of Innovation
Modern Innovation is a complex phenomenon:
Large scale industrial R&D
Government
High technology entrepreneurialism (Silicon Valley, etc)
Digital based innovation, e.g., ebusiness (Silicon Alley, etc)
User generated content and emerging networks of innovation (open source,
social networking platforms)
Innovation Is a Moving Target in the 21st Century
Rise of knowledge-intensive industries and high-value services
Increasing public-private partnerships to meet social needs of all kinds (social
innovation)
Deepened legacy of Schumpeter's (1934) concept of “creative destruction”
Growing expansion of the meaning and practice of entrepreneurship
Entrepreneurship is increasingly recognized as an important driver of economic
growth, productivity, innovation and employment (Timmons and Spinelli, 2009).
Growing expansion of the meaning and practice of
entrepreneurship.
Personal Reason: I wanted to best utilize my experience
working at the Entrepreneurship Centers at NYU-Poly
and it provided me a first hand experience to look
deeper into the field.
Diverse Forms of Entrepreneurship
Varying Types of Activities Prevalent in Entrepreneurship
Traditional business/commercial activities
Not-for-profit entrepreneurial activities focused on social outcomes
Activities focused on social problems that trigger entrepreneurial behavior
Rise of social entrepreneurial activities
Entry of discussion and solution of social problems into the sphere of business
(Seelos and Mair, 2004; Thompson, Alvy and Lees, 2001)
Is social entrepreneurship a special form of entrepreneurship?
“There appears to be plenty of evidence that social entrepreneurship exists,
particularly when measured by the rapidly increasing number of conferences,
case studies, and funders interested in the topic.”
- Paul Light, Paulette Goddard Professor of Public Service, NYUWagner
However, as a research topic, social entrepreneurship remains relatively
elusive from mainstream management literature.
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Social Entrepreneurship Overview
The definitions of social entrepreneurship may be traced back to writings on
non-profit organizations (Hansmann 1980; Young 1986), corporate social
responsibility (Kanter 1999; Wartick & Cochran 1985) and entrepreneurship
(Gartner 1985; Shane & Venkatraman 2000).
Significant Conflicts in Definitions
For some scholars, social entrepreneurship refers to the creation of
positive social change, regardless of the structures or processes
through which it is achieved (Tracery and Phillips, 2007). Success is
measured by the extent to which they achieve “social
transformation.”
A second strand in the literature focuses on generating “earned income”
in the pursuit of social outcomes (Boschee, 2001; Oster et al, 2004). From
this perspective, social entrepreneurship is concerned with enterprise for a
social purpose and involves building organizations that have the capacity
to be both commercially viable and socially constructive.
The literature in this field seems to be dividing and coming together at the
same time.
Social Entrepreneurship/Entrepreneurs Defined
Social entrepreneurs endeavor to be good as well as successful by
simultaneously achieving economic (profit), environmental, and social goals –
the so-called triple bottom line (Elkington, 1997).
Author Definition
Mair & Marti (2004) Social entrepreneurship is defined as the innovative use of
resources to explore and exploit opportunities that meet a social
need in a sustainable manner
Haugh, (2007) Social entrepreneurship combines the economic benefits of
entrepreneurship with the delivery of social and environmental
outcomes, and has the potential to assist the economic and social
development of individuals and societies around the world
Light (2006) A social entrepreneur is an individual, group, network,
organization, or alliance of organizations that seeks
sustainable, large-scale change through pattern-breaking ideas
in what and/or how governments, nonprofits, and businesses
do to address significant social problems.
A Few Salient Features
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Shifting the emphasis
Reducing the need for charity
Engaging people to take responsibility
Leading to sustainable improvements
Privatization of public services
Engaging in strategic approach
Social Enterprise – It Matters Because….
New Models of Opportunities and Innovation (Blended Value Approach)
New Models of Sustainability and Development
New Models of Scale and IMPACT
….. New Opportunities for Teaching and Learning
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A Few Recent Trends
Many of today's social entrepreneurs are blurring
boundaries between the nonprofit and for-profit
sectors, as they:
Search for more sustainable and systemic solutions to
social problems.
Explore ways to improve organizational effectiveness and
efficiency.
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Social Venture Models
Source: Academy for Entrepreneurial Leadership
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Overarching Representation of Contemporary
Entrepreneurship
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Research Approach
In-depth qualitative case study approach (Yin,1994; Eisenhardt , 1989;
Martin,2010)
Case study research in close interaction with practitioners who deal closely
with the organizations of study (Amabile et al.,2001; Leonard-Barton,1990;
Gibbert, Ruigrok and Wicki, 2008)
Qualitative Interview Question Methodology (Spardeley,1979; Seidman,1991;
Charmaz,2003)
Data collection and analysis in several phases (Strauss,1987; Charmaz,2003;
Thomas,1993)
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Illustrative Cases: The NYC Cleantech
Sector
Cleantech represents more than just a business opportunity. Becoming
involved in cleantech provides a chance to “do good” (Woetzel, 2009).
Companies included in study:
Verdant Power and Green Map Systems – both cleantech entrepreneurial
endeavors in NYC
Total population of companies belonging to an incubator exclusively devoted to
nurturing urban based clean technology companies, the New York City
Accelerator for a Clean and Renewable Economy (NYC ACRE) of NYU-Poly
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Portfolio Companies at NYC ACRE
Observations + Discussion
Drawing on Horwitch and Mulloth's comparative study of Verdant Power (VP)
and Green Map Systems (GMS), both of which are in the broadly defined
clean technology arena, and are also entrepreneurial endeavors, it can be
stated that attaining success in cleantech entrepreneurship requires
"balancing" social and commercial objectives (Horwitch and Mulloth, 2010).
The companies in NYC ACRE exhibited a combination of traditional for-profit
approaches as well as socially-driven approaches.
The companies in the accelerator appeared to reach the hybrid middle ground
very rapidly, almost from the beginning.
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Observations + Discussion
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Observations + Discussion
Organizations in the hybrid middle ground seek to:
Address the inadequacies of not-for-profit activities by proactively attempting to
commercialize their products and/or services; and at the same time,
To have an environmental and/or social impact.
The pace of evolution of the eight NYC ACRE cleantech firms were quite
different from that of Verdant Power or Green Maps System. The eight
incubator-nourished firms entered the hybrid middle at a very early stage of
their development.
The role of the incubator is to help these companies reach the hybrid middle
ground very rapidly, as in the case of NYC ACRE.
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Observations + Discussion
The hybrid middle ground emphasizes the "conflict" of balancing social and
commercial objectives:
Human resource allocation
Funding allocation
Organizational structure
Changing missions, and
Strategic orientation
Further advances in understanding the inherent "conflicts" will extend our
understanding of social entrepreneurship, which is growing and attracting
increasing numbers of individuals and groups.
Using a perspective that emphasizes the hybrid middle ground for both
research and practice will facilitate development of effective managerial
strategies for entrepreneurship and will assist those who undertake social
enterprises.
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