This chapter has discussed some of the theoretical issues with studying social entrepreneur- ship, by proposing a working framework for evaluating SEVs in terms of value generation, capture and sharing. It has proposed conceptualising value creation as human develop- ment can help reconcile the economic and social objectives of SEVs. The approach con- textualises theories of entrepreneurship and development, and helps specify some specific ways that SEVs might improve their beneficiaries’ lives, and potentially improve wellbe- ing, by meeting unmet needs. This framework acknowledges ventures must capture some value from their activities. Often SEVs create value by selling a good or service that solves a positive or negative externality by increasing the social surplus at a different equilibrium point to the market one. But there are ventures which forgo value capture, because their purpose is to provide public goods, or services whose costs and benefits cannot be easily monetised.
Whether ventures create non-market value can be measured by applying Sen and Nuss- baum’s human capabilities frameworks. Human capabilities frameworks can help to un- derstand ventures’ human development goals. Whether ventures have achieved these goals can then be empirically tested, by examining not only whether ventures improve their beneficiaries’ capabilities in an absolute sense, but also by evaluating how well different functionings may reinforce each other. Using this approach, it should be possible to mea- sure the effects of SEVs in terms of outcomes, rather than financial performance and easily quantifiable outputs.
The potential for productive, unproductive and destructive effects, at different institu- tional levels, across time, illustrates how the outcomes of social entrepreneurship can be complex. Innovations in social relations, or in providing new or different products to solve market failures, might be effective at the local level, but ineffective at higher levels, or vice versa. The potential for unproductive or destructive effects also serves as a warning that not all entrepreneurial outcomes may be positive. Even if an initiative improves certain in- dividuals or communities’ wellbeing, perhaps in the short-term, unproductive outcomes might still occur, if, for example, the initiative fails to improve overall outcomes at a na- tional level over time. It is also possible ventures could set change processes in motion for which it is difficult to detect clear outcomes over a certain time frame.
The framework of how SEVs create value shows how value generation, value capture and value sharing can work together to help a venture to fulfil its mission. In particular, the framework helps to bring together the processes and outcomes of social entrepreneur- ship, and may pinpoint how SEVs are performing at value creation. Moreover, for the purposes of evaluation, it can help to focus attention on whether social entrepreneurship produces socially beneficial returns, as well as returns for the venture and its supporters. The question, then, is what kind of value do educational SEVs intend to create? The small literature which has studied different kinds of educational SEVs can help to understand the outcomes educational social entrepreneurs are likely to pursue, and how they might do so.
4
Evaluating educational social
entrepreneurship ventures
4.1 Introduction
Education is one important way people can develop and extend their capabilities, and
learn how to adapt to a changing world (Leadbeater,2016, pp. 26–29). It can also pro-
duce broader economic and social benefits. While schooling can be exclusive, compulsory education is usually thought of as a public good, since families might under-invest in their children’s education if they had to pay the full cost. Further, the benefits of compulsory education can be shared by all members of society. The main way educational social en- trepreneurs are likely to produce economic and social benefits is by helping children who may not have had the opportunity, because of their circumstances, to access an education which can help them to grow in their character and develop the capabilities to function and participate in the world.
complex influence of socio-economic status over educational and life outcomes. For exam- ple, the OECD’s Programme for International Student Assessment (PISA) has found that socio-economic status can account for between 13 and 18% of the variation in academic achievement in New Zealand, whereas the OECD average has been between 13 and 15% (May et al.,2013, p. 39; New Zealand Ministry of Education,2017c, p. 46). The chief com- ponents of socio-economic status, income, parental education and parental occupation, are each significant predictors of literacy (Buckingham, Wheldall, & Beaman-Wheldall,
2013; Clifton & Cook,2012). Gaps between the literacy of higher and lower socio-economic status pupils are likely to emerge before children even start school (Clifton & Cook,2012, p. 33). Poor quality home environments, in which children may lack the resources and/or support of their parents, contribute to the risk that pupils with low socio-economic back- grounds will struggle with literacy (Buckingham, Beaman, & Wheldall,2014). Neverthe- less, high quality early childhood education, and school education in the early-years, can play a critical role in stopping these children from falling further behind and, hopefully, accelerating their progress (Blanden & Macmillan,2014; Heckman & Raut,2016).
The wider economic and social rewards of education also matter. In terms of economic
growth, the New Zealand Treasury has estimated from a2009study by Hanushek and
Woessmann that an increase of 25 points in New Zealand pupils’ performance at PISA
would increase New Zealand’s GDP by between 3 and 15% (New Zealand Treasury,2012,
p. 2). Further, using data from the OECD’s Programme for the International Assessment of Adult Competencies (PIAAC), Hanushek, Schwerdt, Wiederhold, and Woessmann
(2015) have found that, on average, a one-standard deviation improvement in numeracy
skills is associated with an 18% wage increase among prime-age workers. Research of the effects of early childhood education shows that the early investment in education, through pre-school, can significantly improve the cognitive and non-cognitive skills which enhance earnings and school outcomes (Heckman & Masterov,2007; Heckman, Pinto, & Savelyev,
2013; Heckman, Stixrud, & Urzua,2006; Lundberg,2017). There is also an argument that investing in skills development can strengthen social cohesion, by encouraging more in- clusive economic growth (OECD,2016, p. 8). In addition, a better-skilled workforce can manage the transition to new jobs in developing markets.
This evidence suggests there are opportunities for social entrepreneurs in education. This chapter explores how some educational SEVs have responded to these opportuni- ties, and may have created value, as suggested by the framework developed in chapter 3. It
first examines what the value proposition of an educational SEV is by examining the phe- nomenon of educational social entrepreneurship. Previous research which has examined how educational SEVs have sought to achieve their goals, and what they have done to help improve educational outcomes for children, is then discussed to illustrate how these ven- tures generate and share value, and some implications for value capture. The role of value networks, in distributing value, can also be seen. Particular attention is given to the issues surrounding the United States charter school model and an incubator for educational en- trepreneurs, ‘Schools 4.0’. An issue which may distinguish educational SEVs from other SEVs is that their margins are likely to be slim. An implication is educational SEVs may face a set of opportunities and constraints more like non-profit organisations which, as Agafonow (2015) has suggested, means they prioritise value creation at the cost of value capture. Some propositions are then proposed to evaluate New Zealand’s PSKH sponsors as examples of educational SEVs.