[MUSIC] So if government, business and the non-profit sector all had their distinctive styles of solving public problems, you might ask well, what makes social entrepreneurs different? What makes their approach any different? I think what makes them different is that they are looking for, as I said before, something novel, something fresh. A new approach that says what if we re-conceptualize the problem? What if we take a different angle at it? They're trying to drive innovation and they're trying to work above and beyond the kind on sector limits that I've just described. So let's take one example. Let's go to Africa and look at Moladi. In Africa, there's a question of how can we provide not just affordable housing but durable housing that can be sustained even amidst storms and violent weather. A group of social entrepreneurs came up with the idea of what if we were to construct a house made out of plastic molds? Small squares that snap together. And now they're doing it all across Africa. They are building houses by taking molds, snapping them together, pouring concrete into these molds, inserting rebar, steel rebar to make the unit extremely strong. And they're generating housing at very low cost that can withstand enormous amounts of environmental stress. This is an idea that I don't think the business sector, the non-profit sector, or the government sector would naturally gravitate towards. It involves a fresh idea about what housing might look like. It involves the idea of a concrete poured house that can be reassembled, molds for which can be reassembled all over the place and replicated over and over again. So what's interesting, I think, about the social entrepreneurship approach to public problem solving is that it starts from a blank slate. It says we want to solve a problem, and then it says, how might we do it most effectively, most efficiently, most creatively. Now, social entrepreneurship has gotten a lot of play in recent years. A number of people have focused on it. There's a funding community now that's interested in providing financial support for this field. But let's take a couple of more definitions as we get started in this area. Social entrepreneurs, said Jeff Skoll the founder of eBay, social entrepreneurs are the practical dreamers who have the talent, and the skill and the vision to solve problems and to change the world. Social entrepreneurs have a unique approach that is both evolutionary and revolutionary, operating in free markets where success is measured not just in financial profit but also in the improvement of the quality of the people's lives. That definition is important because it gets this double bottom line. That there's both a mission dimension and a market dimension in many social entrepreneurship initiatives. Bill Gates has looked at this area and said, as I see it, there are two great forces in human nature, self-interest and caring for others. Capitalism harnesses self-interest in helpful sustainable ways but only on behalf of those who can pay. Philanthropy and government channel our caring to those who can't pay, but the resources run out before the needs are met. To provide for the poor, we need, he says, a system that draws in innovators and businesses in a far better way. I like to call it creative capitalism. That's Bill Gates' term for this domain. Finally one more. One of the leaders in this field is Mohammed Yunus the kind of progenitor of the whole micro finance movement and of Gramin bank. Yunus has look at it and said nonprofits alone have proven to be an inadequate response to social problems. Charity is a form of trickle down economics. If the trickle stops, so does the help for the needy. And in countries where the needs are greatest and the resources for charity are usually very small. The need to constantly raise funds from donors uses up the time and energy of non-profit leaders. Yunus says, we need to introduce another kind of business, social business. So he's struggling with a concept that he wants to introduce of social business that brings these two sectors together. Whether you call it creative capitalism, social business, social entrepreneurship, social innovation, we're talking about the same thing. Creative public problem-solving that spans boundaries and that breaks through existing ways of thinking. So, let's tighten this up. I have a way of thinking about social entrepreneurship that I'd like to share with you. And I basically put four constraints on this concept. I say something is social entrepreneurship if it exhibits one, the characteristic of innovation. There has to be something new for it to be social entrepreneurship. Second, it has to have financial sustainability. The idea cannot be simply to write grants forever and hope for the largess of others. Inside the financial model of the enterprise there has to be the concept of sustainability. Revenues have to be generated somehow to make the engine fire and go on its own. Third, all social entrepreneurs are creating social impact. If there's not a public benefit that's a accrued from this work, it's not social entrepreneurship. There has to be social impact. There has to be artifacts in the world of change. Finally, social entrepreneurs are ambitious. They are interested in scale. For an idea to be really social entrepreneurship, I think it has to exhibit the potential for scale and growth. It can't just be a local, small solution. Even though those can be very valuable, social entrepreneurs are aiming for broader and more wide-spread change. So if you take into consideration those four considerations and the definitions we worked on just before, you start to get the idea that social entrepreneurship is a fresh field. It's cutting across business, non profit and government. It's trying to find solutions in new ways. And that people in this field are bold, risk takers and fundamentally committed to innovation. [MUSIC]