The Concept of Shared Value in Social and Community Entrepreneurship

Social and community entrepreneurship has gained significant attention in recent years as a means to address social and environmental issues while also creating economic value. This approach to entrepreneurship goes beyond traditional profit-driven models and focuses on creating positive impact for both the community and the business. One key concept that has emerged in this field is shared value, which is the idea that businesses can create value for themselves while also creating value for society.

Defining Social and Community Entrepreneurship

Before delving into the concept of shared value, it is important to understand what social and community entrepreneurship actually means. Social entrepreneurship refers to the use of entrepreneurial principles and practices to create innovative solutions to social problems.

This can include addressing issues such as poverty, inequality, and environmental degradation. Community entrepreneurship, on the other hand, focuses on creating economic opportunities within a specific community or group of people. Both social and community entrepreneurship share a common goal of creating positive impact, whether it be on a societal or local level. These approaches recognize that traditional business models often neglect the well-being of communities and the environment, and aim to fill this gap by incorporating social and environmental considerations into their operations.

The Emergence of Shared Value

The concept of shared value was first introduced by Michael Porter and Mark Kramer in their 2011 Harvard Business Review article, "Creating Shared Value." They argued that businesses have a responsibility to not only create economic value for shareholders, but also to address societal needs and challenges. This idea challenged the traditional notion that businesses should solely focus on maximizing profits. Shared value is based on the belief that businesses can create economic value by addressing social issues.

This can be achieved through various means such as developing new products or services that meet societal needs, improving supply chain practices to benefit local communities, or investing in employee training and development to create more skilled and productive workers.

The Three Principles of Shared Value

In their article, Porter and Kramer outlined three key principles of shared value that businesses should follow in order to create positive impact:
  1. Reconceiving products and markets: This involves identifying unmet societal needs and developing products or services that address these needs. For example, a company may develop affordable and nutritious food options for low-income communities.
  2. Redefining productivity in the value chain: This principle focuses on improving the efficiency and sustainability of a company's operations. This can include reducing waste, using renewable energy sources, or implementing fair labor practices.
  3. Enabling local cluster development: By investing in the development of local communities, businesses can create economic opportunities for both themselves and the community. This can include providing training and education programs, supporting local suppliers, or creating jobs in the community.

The Benefits of Shared Value

The concept of shared value has several benefits for both businesses and society as a whole.

For businesses, it can lead to increased innovation, improved brand reputation, and enhanced employee engagement. By addressing societal needs, businesses can also tap into new markets and attract socially conscious consumers. For society, shared value can lead to improved living standards, reduced inequality, and a more sustainable environment. By incorporating social and environmental considerations into their operations, businesses can help address pressing issues such as poverty, access to education and healthcare, and climate change.

Examples of Shared Value in Action

Many companies have already embraced the concept of shared value and are successfully creating positive impact while also generating economic value. One notable example is Nestlé's Creating Shared Value initiative, which focuses on addressing global issues such as nutrition, water scarcity, and rural development.

Through this initiative, Nestlé has developed products and programs that aim to improve the health and well-being of individuals and communities while also driving business growth. Another example is Unilever's Sustainable Living Plan, which aims to improve the health and well-being of 1 billion people, reduce the company's environmental footprint, and enhance livelihoods for millions of people by 2020. This plan has not only helped Unilever create shared value, but it has also led to increased sales and cost savings for the company.

Challenges and Criticisms

While the concept of shared value has gained widespread recognition, it is not without its challenges and criticisms. Some argue that businesses may use shared value as a marketing tool to improve their image without actually creating meaningful impact. Others argue that shared value may not be applicable to all industries or businesses, as some may not have the resources or capabilities to address societal needs. Additionally, there is a concern that shared value may divert attention away from the role of government in addressing social issues.

While businesses can certainly play a significant role in creating positive impact, it is ultimately the responsibility of governments to address systemic issues and create policies that promote social and environmental well-being.

The Future of Shared Value

The concept of shared value is still relatively new, but it has already made a significant impact in the world of social and community entrepreneurship. As businesses continue to recognize their role in creating positive impact, we can expect to see more companies adopting shared value principles in their operations. However, it is important for businesses to approach shared value with sincerity and a genuine commitment to creating positive impact. By doing so, they can not only contribute to a better world, but also drive long-term success for their business.


The concept of shared value is a powerful tool for businesses to create positive impact while also driving economic growth. By reconceiving products and markets, redefining productivity in the value chain, and enabling local cluster development, businesses can create value for both themselves and society.

While there are challenges and criticisms surrounding this concept, it has the potential to shape the future of social and community entrepreneurship and create a more sustainable and equitable world.

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