Interview with Dr. Alexandra Mittermaier: “We are witnessing great solidarity”

Dr. Alexandra Mittermaier

Almost 23,000 people have actively participated in the #WirVersusVirus Hackathon sponsored by the German government. Around 1,500 projects were worked on. Initiatives like this fall into the category “Social Entrepreneurship”. Alexandra Mittermaier, who works at the Entrepreneurship Research Institute of the TUM School of Management, conducts research on this topic together with Prof. Holger Patzelt – and is currently observing a rapid increase in social organizations. We interviewed her.

Dr. Mittermaier, what exactly is “social entrepreneurship”?

Social Entrepreneurship has many facets. On the one hand, social entrepreneurs aim to create social value, on the other hand, they also pursue economic goals. Better said: Social entrepreneurs tackle a social problem, such as poverty among the elderly. They combine this problem, or rather the solution to this problem, with sustainable and viable business models. Their main concern is to create help for others to help themselves. Thus, the ideal goal of social entrepreneurs would be that at some point they would make themselves redundant with their organization by solving a specific social problem. In doing so, creative and innovative solutions are developed, just like in a commercial company. But in this case, profits are generated as means to create social value. Once the problem is solved, ideally the company makes itself redundant, and therefore no longer exists either.

The employer’s place of work also disappears. Are all social entrepreneurs altruists?

This is to some extent altruistic and the entrepreneurs, of course, have a prosocial goal. Yet there is certainly a vested interest in setting up their own organization, which they can live off as founders. The organization is profitable, which secures their own living. But the main part of these profits should not be distributed to stakeholders as in a commercial company, but should flow back into the organization and thus ensure a sustainable business model. This is one of the major differences to a commercial company.

According to your research, does “social entrepreneurship” increase in times of crisis? What is the reason for this?

Social entrepreneurship is a phenomenon that we have known for a long time and that needs to be present in order to solve social problems that arise from market failures or government deficits. But yes, especially in such times of crisis, when social problems are strongly present in the media, when there is suddenly a large increase in the number of people affected or when certain norms or regulations are fundamentally shaken, we see a rather rapid increase in organizations that emerge to help. These are created to tackle precisely such problems. But this does not necessarily mean that a social enterprise is emerging from all these organizations, initiatives and projects. That can happen, but it does not have to. As researchers, we look at what has to happen, what conditions are necessary for a social project to actually become a company.

Now, in the Covid-19 pandemic, there are many organizations that initially arise from the primary desire to help. But when these social entrepreneurs start their project, they usually do not have a business model yet.

You are currently researching how the crisis around Covid-19 affects “social entrepreneurship”. Do you already have initial insights?

It is still too early to talk about first insights – the project has been running for roughly two weeks. But first research and interviews reveal a number of interesting aspects. For example, we are trying to find out what role the founders’ own interest in creating such an organization plays for the long-term development of the organization. This could simply be the desire to work on such a project, to build a platform or to gain entrepreneurial experience.

But above all, we are currently witnessing great solidarity. Many people want to help those who are suffering and prevent the potential collapse of a society that suddenly seems to have fallen apart. The new organizations that are currently being set up want to help alleviate the problems of those who suffer as a result of the crisis – being health-related or economic. For example, communities are emerging that are committed to ensuring the preservation of their local shops and restaurants. In Munich, for example, there is the “Support your Local” initiative among many others.

For us in research it is extremely interesting to observe these initiatives over a longer period of time. This allows us to research the organizational processes that lead to such social enterprises from the very beginning – after all, these projects are no more than two or three weeks old.

Initially, these organizations start with funds from their own pockets or live on donations in the beginning. Then the next step would be to set up a business case and actually create a social enterprise. For us, it is exciting to find out how an emergent aid organization can transform into a social enterprise over time – and what it needs on a personal, organizational and societal level.

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