Social Entrepreneurship and Regional Economic Development: A Conceptual Framework

Social entrepreneurship seeks improvement in social conditions by creating value; however, much of that value is in the form of externalities to the social entrepreneurship project. Thus, while social benefit may exceed social cost, market value is less than market cost. Un-subsidized, privately funded, social projects will not be undertaken. This study develops a conceptual framework linking economic development of a region and social entrepreneurship. We separate the social value into two parts: That which can be internalized by the social organization, and that which is external to the social organization. The externalized portion is dependent on the value to a "community." Under certain circumstances, part of the external value generated by the social entrepreneurship project may be recoupable. The conceptual framework is applied to a proposed national historic automotive museum as an example of how social entrepreneurship and economic development can be linked. The conceptual framework justifies, under certain conditions, a public-private partnership for social entrepreneurial projects. In addition, the conceptual framework will work best where a community has a clear and generally accepted set of values and mission. Thus, two strategies are proposed: (1) A social entrepreneurship strategy to improve economic development of a region and, (2) An economic development strategy that incorporates social entrepreneurship.