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Money & Finance Opinion

What Happened in Public Education BSE (Before Social Entrepreneurship)?

February 13, 2008 3 min read

This is the third in series addressing the questions implied by Alexander Russo’s statement:

“Social entrepreneurship is everywhere these days…. And of course it’s a big buzzword in certain education circles as well. I still don’t know what it means.”

From my last posting, we have a simple definition of the original – commercial – entrepreneur:

One who is able to begin and sustain a (business) entity that organizes supply to satisfy a previously unmet demand and, when necessary, to dissolve it effectively and efficiently.

The definition contains three ideas: Organizing supply to satisfy a previously unmet demand; beginning and sustaining an entity; and the power to close it down – or keep it going. The first goes to individual creativity at the conceptual level; the second, one’s management initiative; the third, personal control. In the business setting, the third implies legal ownership based on personal investment.

How do we relate this to a “social” setting, like public education?
If we cut through all the political science, education and business school writing on social value and non-financial measures of return on investment, and stick to these basics, the similarities and differences between commercial and social entrepreneurship are obvious. Whether the field of play is the general economy or public education, there is a great deal of room to satisfy previously unmet demands. It is possible for individuals interested in the public education “space” to form entities within the traditional system, or outside of it. Third, unless the entity formed is a business, it is virtually impossible for the individual with the conceptual and management talent to control that entity, or to see her investment of cash or sweat reflected in a legally recognizable ownership stake.

The first two elements of the definition were regularly satisfied in public education long before someone added “social” to entrepreneurship. Public education not only had lots of problems and scores of customers with unmet needs, all sorts of entities were created to satisfy these demands. For at least the last 50 years there have been public education programs aimed at particular students or kinds of students; laboratory schools; specialized schools; and those “islands of excellence” - “regular” schools transformed by dynamic principals.

Were the people who created these entities “entrepreneurs”? They must have had entrepreneurial personalities or qualities, and they did things entrepreneurs do. But based on the definition above, they were not entrepreneurs, because the decision to keep the enterprise going or shut down was not theirs. That power rested with the superintendent and school board. They weren’t pegged as entrepreneurs, social or otherwise, by the foundations providing the grant financing - innovators maybe.

Similarly, there were a handful of publishing firms providing materials to public education, and demand for their goods evolved. Presumably there were people in those companies with entrepreneurial personalities doing innovative things. But these firms had a hammer lock on sales, and the term intrapreneur wasn’t coined until 1983, or popularized until 1985.
Up until roughly the 1990s, a market structure based on a monopoly provider of public schools, an oligopoly of publishers, and no student performance requirements, more or less prevented the emergence of commercial or social entrepreneurship in public education. In effect, with favorable market rules, the dominant institutions had the power to prevent potential rivals from becoming real threats, and used it.

Next:
The state-based “standards and accountability” and charter school movements led to legislation opening up just enough space for commercial entrepreneurship in public education. Did that space - plus a whole lot of philanthropy borne of the “New Economy” - allow for something comparable in the social sphere?

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