Position Papers

The Key Ingredients of Social Change

Social Capital, Social Entrepreneurship and Social Engineering
The Key Ingredients of Social Change

The term social capital re-entered the social sciences lexicon in the 1980s. According to Sociologist James Coleman, the concept is used to mean the ability of people to work together in groups. More broadly, it deals with any instance in which people cooperate for common ends as a result of their shared visions and values. In today’s world, many people now regard social capital as the fundamental ingredient in both economic development and political stability. Since the last two decades, debates on the issue of social capital have been dominated by how the concept fits into the broader aspects of the development agenda pursued by nations of the world. At a time in which the scourge of poverty, malnutrition and hunger, and the spread of disease have created a crisis unparalleled in the modern world, there is an increasing urgency for leaders and peoples of the world’s nations to seek for veritable ways and means of curtailing the unfolding and spreading of this human tragedy.

As the twentieth century was winding up, a new appreciation of the importance of incorporating cultural factors into economic growth and development models arose. Values and norms increasingly became part of the models of economic life. International financial institutions began to push for the application of a set of economic principles and theories by which development was to be freed and extricated from the dead hands of the state, many of which were run by military and totalitarian regimes in many parts of the world. This new dominant approach, known as the ‘Washington Consensus’ achieved varying degrees of success across Europe, Asia and America.

In areas where the new approach failed, the popular charge was directed against its drive towards excessively liberalization of economic life. However, it has been noted that the basic reason accounting for the unsuccessful application of the new set of economic policies was one of omission rather than of commission. It was not the case that the approach was misdirected; it was rather a case of its incompleteness. According to Fukuyama’s argument, “one of the ways in which it was incomplete was its failure to take account of social capital.”

Today, social capital is the key issue on the front line of the successful implementation of development agenda. Economists, management experts, politicians, key policy makers and opinion formers are ever more realizing that it is not the case that liberalization does not work, but that economic policies are not just enough to induce real and sustainable development. In the words of Francis Fukuyama, “Economic policy of any sort must be carried out by a state; one that is limited in scope but strong in its ability to enforce the rule of law, competent and transparent in the formulation of policy, and legitimate enough to have the authority to make painful economic decisions. The development agenda, in other words, cannot abstract from politics or from political institutions.”

Although many people agree to the fact that sustainable institutions are needed for development, there are those who still doubt the critical place of social capital in this arithmetic. “In the past, cultural explanations for poverty or underdevelopment have been abused because what was lacking was not the right values, but rather the right set of institutions, such as the rule of law or a system of commercial courts, allowing growth to occur. Institutions can be changed, whereas cultural values are much more difficult to manipulate through policy; hence, appeal to cultural factors often seemed like a counsel of despair.”

The cleavage between culture and institution is what social capital bridges. Institution-building itself requires social capital. Obviously, not every society is capable of building state institutions and bureaucratic structures that can match one another in terms of transparency, efficiency and professionalism. But is has become true today, especially in Asia, that societies that in which large numbers of people are accustomed to working together and cooperating in large organizations are much more likely to develop strong, durable, efficient and reliable state institutions. The whole point is that these people share a number of common values and visions and are thus united in working together on the basis of such shared values to propel development and to act as checks to excessive government interference in the general organization of their political, social and economic life.

Social capital is critical for any successful social change to be effected. Since it is what permits individuals to band together to defend their interests and organize to support collective needs, it helps to consolidate the structures of civil society and well-equips individuals and institutions to confront the challenges of development. It also supports institutions and the rule of law and is a vital underpinning of democracy which is the source of legitimacy for the political and economic framework in which human capital and material development increasingly takes place.

According to Francis Fukuyama, “social capital is shared norms or values that promote social cooperation, instantiated in actual social relationships.” Social capital is related to culture as a form of creative expression of the totality of a people’s way of life and worldviews. It thus plays a functional role in the society since it is the means by which individuals and groups of individuals cooperate and communicate in a variety of activities. It strongly implies a concept of trust which is the bedrock of any relationship among people. Trust is the strongest social asset of social capital.

At an organizational level, the creation of social capital is not all that different from the creation of human capital: it is done through education, and therefore requires investments in training and an institutional infrastructure within which the training can take place. Unlike conventional human capital, which involves the transmission of certain specific skills and knowledge, social capital requires the inculcation of shared norms and values, and it is often brought about through habit, shared experience, and leadership.

Social capital include shared values like trust, collaboration, synergy, team work,

On the other hand, social entrepreneurship is a term that has grown in popularity and usage in recent times. It was introduced two centuries ago by the French Economist Jean-Baptiste Say to mean the “shift in economic resources out of an area of lower and into an area of higher productivity and greater yield.” Many leading universities in Europe and America today are opening their doors to prospective students who now wish to offer courses on social entrepreneurship- an idea which has gained prominence and reputation as an established vocation and a mainstream area of inquiry. Journalists, philanthropists, social workers and development consultants are constantly invoking the term while many business and management experts are becoming familiar with its wide-ranging concerns today. Etymologically, the word entrepreneur comes from the French language and it means “one who takes into hand.” Thus, a social entrepreneur is a person who takes into hand major social issues or crisis with a relentless passion to tackle them. In a world of terrorist attacks, corporate scandals, ineffective governance and big social and ecological crises, it is important to find people who are inspiring vectors of positive change.

Today, government appears increasingly helpless against the ever converging concentration of power in corporate hands that seem to provide effective and efficient service in a swift and reliable fas

hion than government is accustomed to providing. The citizen sector is thus growing in the provision of necessary social services, leadership, innovation and energy. This growing trend is also changing the structure of society and how society addresses social problems. This obviously has implications for business and government. For business, it provides opportunities for collaboration with sophisticated and increasingly effective citizen groups. For government, social entrepreneurs are providing a stream of field tested new ideas and much needed competition. It is today providing individuals with fresh cutting edge ideas for social change, entrepreneurial spirit and strong ethical fibre.

Social entrepreneurs are social innovators. They are people who radically alter the way things are done in the society and how society responds to the magnitude of social problems that today’s world is increasingly being faced with. As propellers of broad and breathtaking social change, social entrepreneurs have a profound effect on society. Social entrepreneurs, according to David Bornstein, are “transformative forces: people with new ideas to address major problems, who are relentless in the pursuit of their visions, people who simply will not take ‘no’ for an answer, who will not give up until they have spread their ideas as far as they possibly can.”

For Joseph Schumpeter, the entrepreneur is a source of “creative destruction” necessary for major social and economic advances. Old ways and patterns of doing things have to be creatively destroyed to give way for newer ideas, fresher insights, stimulating approaches and innovative impulses that pave the way for leaps in productivity and waves of change. Social entrepreneurs advance systemic change to counteract the spread of problems.

Around the world today, humanity appears to be clueless to the vast problems of inadequate education, failures in healthcare systems, poverty and hunger, the spread of disease, high crime rate, terrorism, environmental disasters, declining trust in political institutions, corruption and large scale financial fraud, poor leadership and inept governance. Leaders of governments, technocrats, global financial institutions and international bodies on their part seem to be bogged down by this upsurge of events which have created many more crises unparalleled in the modern world. As these problems continue to task the ingenuity of generations of the world’s leading scholars and agonize the consciences of moralists, individuals and groups who inspire hope that change is possible and work towards it are a welcome delight. As Bornstein argues, “It takes creative individuals with fixed determination and indomitable will to propel the innovation that society needs to tackle its toughest problems” and this change often starts from a single individual who takes the initiative and creativity to act on that vision.

I have chosen to look at the social entrepreneur as that person who utilizes social capital and harmonizes it with social engineering to effect social change. The fact is that there are restless people today seeking to deal with problems that are not being coped with effectively by existing institutions. These people who are at the lead of cutting edge research, ideas and scholarship recognize the fact that if things must change, they have to be done in ways that are different and entirely new from how they are currently being done. They are propelled by new ideas to escape old formats in order to invent new forms of organizations that stand the test of time.

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