Social Entrepreneurship and UBI

Social Entrepreneurship and UBI

  • mdo  Admin
  •   Articles
  •   August 12, 2021

Experienced entrepreneurs want to create a profitable business to the point where it can hire, train, and support careers. They have a sense of how microeconomics affects macroeconomics, and vice versa. Social Entrepreneurs are a rare type of entrepreneur that focus on social good, and they want to change the world for the better. The goal of a Social Entrepreneur is to start an enterprise that solves social problems and effects social change while still maintaining a profit. To tackle societies big issues, the world will need a lot more Social Enterprises.

But the entrepreneurial world has changed, often employers opt for temporary gig workers and software automations as cost saving techniques. The Gig Economy is growing worldwide. Today there is a lot of risk to starting a Social Enterprise.

To face some major societal challenges head-on, a shift toward a more socially-conscious form of Capitalism is necessary.

What if there is a way to reduce the risk of starting a Social Enterprise, and also create better, more meaningful, socially-conscious jobs?

Instead of adapting the economy with a Federal Job Guarantee or "Full Employment" where the government manages a job for every person who doesn’t already have one, why not opt for something much more streamlined and realistic: A cash payment every month distributed to every adult American citizen as a foundational income floor. This idea is part of a larger concept called Universal Basic Income, or UBI.

With UBI, risk would be reduced and innovation would be boosted as previous studies done to test UBI have shown. In India, for example, entrepreneurship was boosted: “basic income grants led to small-scale investments — more and better seeds, sewing machines, establishment of little shops, repairs to equipment…”'s%20experiment.pdf —A large portion of this cash would then be cycled back into the economy through consumer spending. This cycle fosters an environment for entrepreneurialism and from that comes job growth through the multiplier effect. What is a multiplier effect? It's an economic term referring to how an increase in one economic activity can cause an increase throughout many other related economic activities.

In a 2017 report exploring the impact of basic income on social entrepreneurship, it was stated that “social businesses create 126 jobs for every 94 jobs that a regular business creates.” meaning that Social Enterprises lead to more jobs (socially-conscious jobs) overall.

“A basic income can provide seed capital for individuals to purchase materials and assets needed to start their own enterprises and become entrepreneurs.” — A UBI would reduce “the risk they face should they decide to become entrepreneurs.” UBI also has the potential to change how Social Entrepreneurs crowd-fundraise, as prior basic income studies have shown that recipients tend to pool their income.

It's not just about lowering risk and spurring job creation, UBI has the potential to change the initial incentives for entrepreneurial projects, to steer the initial incentives more towards social entrepreneurship. UBI would spur on new and innovative social-entrepreneurial enterprise because it offers the freedom of extra time (and by extension motivation) for innovation.

This is critical because before a company can become a company and hire employees and contribute to the market cycle, there must be entrepreneurial motivation.

The threat of starvation or destitution is a powerful initial motivator for some entrepreneurs, leading them to focus on what they know that can bring in an income without considering if it is good or bad for society as a whole. This may also lead to the wrong type of initial motivation and the wrong kind of entrepreneurial spirit and company culture especially among technology startups. Those who do not face such dire wealth-starting-points have less understanding and foresight of the longer-term consequences of their new entrepreneurial ventures. This can lead to the wrong types of innovations that are actually seen as "safe-bets" from venture firms especially in places like Silicon Valley.

With a foundational income floor through Universal Basic Income the right type of initial incentive and motivation to begin a new entrepreneurial venture will be encouraged by avoiding the threat of destitution as a primary motivator for profit-seeking entrepreneurialism.

Besides implementing a UBI policy, Social-entrepreneurship needs to be far more encouraged through federal awareness raising (public service announcements), federal provisions of financial incentives, incubation, and provisions of grants.

The Digital Currency Empowerment Network (DIGICEN.ORG) works to advocate for Digital Economic Inclusion through Universal Basic Income, CBDCs, Digital Literacy, Internet Access, and Democracy Tech. DIGICEN defines Digital Economic Inclusion as ensuring everyone has access to the variety of tools necessary to participate in the economy and society, while encouraging democratic participation and social entrepreneurship. These necessary tools include: a foundational income floor, such as a Universal Basic Income (UBI); freedom to use the CBDC; access to internet-enabled devices and apps (Universal Access); and access to Democracy Technology, such as Voting Helper Apps. Digital Economic Inclusion cannot work without a commitment to diversity and a commitment to helping diverse groups have equitable access.

entrepreneur economics economy gig economy startup social enterprise social entrepreneur ubi basic income study findings motivation entrepreneurial motivation venture capital incentives silicon valley

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