Should the creation of low income jobs be considered as Social Entrepreneurship?
By: Dillon Berjani
Tags: Social Enterprise, Social Entrepreneurship, Uber, Entrepreneurship, Technology

Should the creation of low income jobs be considered as Social Entrepreneurship?

Research on entrepreneurship has undergone a transition from a traditional to a modern approach on entrepreneurship, which introduces more liberating ideas, other than the conventional views that classify entrepreneurial activities as a financial emancipation. Early research defined entrepreneurship as a strong-willed activity to initiate a profit-oriented business. As theory developed, researchers recognized the importance of social and societal aspects involved in entrepreneuring and started to bring entrepreneurship more in line with social and societal considerations.

However, theory on social entrepreneurship limits change potential of entrepreneurship given that it intends a particular approach of social change. Through their literature, scholars argue that social entrepreneurs and social businesses have limited change potential. When researchers or practitioners talk about social entrepreneurship, they usually talk about improving the lives of minorities or people in developing countries or green energy solutions that tackle environmental issues.

However, not only social entrepreneurs contribute to tackling social needs. A new wave of researchers argue that all entrepreneurial initiatives generate socio-economic value, and should be studied and understood accordingly. As the discussion on the change potential of entrepreneurship continues, I would like to suggest an expansion of the general understanding of social entrepreneurship.

As an illustrative case I would like to argue whether or not the creation of low jobs should be considered as social entrepreneurship, given the concern that technology could produce a social disruption by creating scarcity for this particular class within the workforce.

The emerge of technology has precipitated a similar scenario to the industrial revolution as it initiated a social disruption by increasing severely the gap between low and high income class.

Given that workers at the bottom of the labor force structure or low-wage jobs will be most immediately affected by technological displacement, researchers urge for the need to start thinking about compensating them for this social disruption caused by automation.

There is far-reaching concern that new technology will fundamentally alter the future of work by displacing traditional jobs. While some argue that technological development will generate more jobs than it destroys, others claim that that technology is destroying jobs faster than it is creating them. According to the World Economic Forum, 7 out of the 10 emerging roles by 2022 are jobs that require a high technological affiliation. These include Data analyst and Data Scientists, AI and Machine learning specialists or Big Data specialists. Among others, roles that are declining until 2022 include jobs such as Accounting and bookkeeping, Assembly and factory workers and postal service workers.

As stated by Andrew McAfee, a principal research scientist at MIT, emerging technologies have made their way from science fiction movies into the mainstream economy and will encounter millions of truck drivers and call center agents around the world. In the United States, while GDP has risen in the last years, median income has not, while inequality has grown. As a result of great productivity, although technology companies offer disruptive solutions, they do not create jobs. Whatsapp only employs approximately 50 people, although it counts over one billion active monthly users.

Although controversial, Uber is a factual example of a high-tech company that has been producing low income jobs in the recent years. Uber is used in this case as it is a hot topic and up-to-date. Various other cases from the sharing economy and beyond could be used upon further research in order to illustrate the above mentioned ideas. According to Uber, in 2017, the company “contracted” around 2.7 million drivers in the world, which are low to middle income jobs depending on whether drivers choose Uber as their main source of income or as a supplementary income source. Research further suggests that total employment expanded in cities where the Uber platform was adopted and that there are no evidence of adverse employment impacts on traditional taxi drivers, as their number also increased by 10%, according to the research.

Uber is not classified as a social enterprise if we stick to definitions on social entrepreneurship suggested by researchers. To be classified as a social enterprise, theory suggests that a company needs to prioritize meeting social needs. Generally, this definition is too limiting, given the change potential of business entrepreneurs in general. Uber illustrates a case of a company that is expected to prioritize profit. The company is sensitive to economic matrices as revenues, net income or the trend of monthly active users, that it needs to monitor, to satisfy investors. Being backed by numerous investors makes Uber an economic driven company that yet has an socio-economic impact in the cities where it deploys its platform by offering a solution to the scarcity of low income jobs. The case of Uber illustrates how a company that not necessarily falls within the current definition of social entrepreneurship can have an impact where it is operating.

Given the scarcity of low income jobs in the future, as suggested by research, precipitated by emerging technologies, and the precarious definition on social entrepreneurship, the case of Uber should initiate a discussion, peculiarly among scholars, in order to expand their definition on social entrepreneurship as it limits change potential of entrepreneurs.