Trend AnalysisOther Social Sciences
Social Entrepreneurship and Impact Measurement: Dynamic Capabilities for Social Value Creation
Social entrepreneurs navigate the dual imperative of financial viability and social mission. Recent research on dynamic capabilities, value creation pedagogy, and partnership-based impact measurement reveals how social enterprises create, sustain, and demonstrate social value.
By Sean K.S. Shin
This blog summarizes research trends based on published paper abstracts. Specific numbers or findings may contain inaccuracies. For scholarly rigor, always consult the original papers cited in each post.
Social entrepreneurship occupies a unique position in the economy: using market-based approaches to address social problems that neither government nor traditional business adequately serves. From microfinance institutions serving the unbanked to social enterprises providing employment for marginalized populations, social entrepreneurs create value that markets alone do not produce.
But the dual mission creates tension. Commercial pressures push toward revenue maximization; social mission pulls toward impact maximization. Understanding how social enterprises manage this tension---and how they create, measure, and communicate social value---is essential for supporting a sector that addresses society's most intractable problems.
Why It Matters
Social entrepreneurship has emerged as a major force in addressing the UN Sustainable Development Goals. Impact investors are directing over $1 trillion toward enterprises that generate measurable social alongside financial returns. But without robust frameworks for understanding and measuring social value creation, the field risks mission drift, impact washing, and misallocation of resources.
The Research Landscape
Social Value Creation Framework
Urmanaviciene (2025) examines social value creation in the context of social entrepreneurship, analyzing how social enterprises generate income while addressing complex social issues. The analysis identifies three modes of value creation: direct (services to beneficiaries), indirect (market transformation), and systemic (policy influence and social norm change).
Dynamic Capabilities
Myyrylainen and Brusila-Meltovaara (2025) apply dynamic capabilities theory to social entrepreneurship through case study analysis. Dynamic capabilities---the ability to sense opportunities, seize them, and transform organizational resources---operate differently in social enterprises because the "opportunity" involves social problems rather than market gaps. Their research reveals how individual social entrepreneurs' values shape organizational capability development.
Education Through Practice
Mukesh and Kenny (2024), with 5 citations, demonstrate social entrepreneurship education through value creation extracurricular activity. Their "value for value" approach engages students in creating real social value, finding that experiential learning produces deeper understanding of social enterprise dynamics than traditional classroom instruction.
Partnership Impact Measurement
Martinez-Valladares (2025) examines partnerships promoting social entrepreneurship through the case of "Yo emprendo," analyzing how collaborative relationships between universities, government, and social enterprises enable impact measurement capabilities that individual organizations cannot achieve alone.
Social Value Creation Modes
<
| Mode | Mechanism | Example | Measurability |
|---|
| Direct service | Providing goods/services to beneficiaries | Job training for unemployed | Moderate (outcomes trackable) |
| Market transformation | Changing industry practices | Fair trade supply chains | Difficult (attribution) |
| Systemic change | Policy influence, norm shifting | B-Corp movement | Very difficult (long-term) |
| Knowledge creation | Research, education, advocacy | Social enterprise incubators | Moderate (outputs) |
What To Watch
The emergence of "blended value" accounting---frameworks that integrate financial, social, and environmental value into a single reporting system---could transform how social enterprises communicate their impact. The International Sustainability Standards Board (ISSB) and EU's Corporate Sustainability Reporting Directive (CSRD) are creating standardized impact reporting requirements that may eventually extend to social enterprises, not just corporations.
Social entrepreneurship occupies a unique position in the economy: using market-based approaches to address social problems that neither government nor traditional business adequately serves. From microfinance institutions serving the unbanked to social enterprises providing employment for marginalized populations, social entrepreneurs create value that markets alone do not produce.
But the dual mission creates tension. Commercial pressures push toward revenue maximization; social mission pulls toward impact maximization. Understanding how social enterprises manage this tension---and how they create, measure, and communicate social value---is essential for supporting a sector that addresses society's most intractable problems.
Why It Matters
Social entrepreneurship has emerged as a major force in addressing the UN Sustainable Development Goals. Impact investors are directing over $1 trillion toward enterprises that generate measurable social alongside financial returns. But without robust frameworks for understanding and measuring social value creation, the field risks mission drift, impact washing, and misallocation of resources.
The Research Landscape
Social Value Creation Framework
Urmanaviciene (2025) examines social value creation in the context of social entrepreneurship, analyzing how social enterprises generate income while addressing complex social issues. The analysis identifies three modes of value creation: direct (services to beneficiaries), indirect (market transformation), and systemic (policy influence and social norm change).
Dynamic Capabilities
Myyrylainen and Brusila-Meltovaara (2025) apply dynamic capabilities theory to social entrepreneurship through case study analysis. Dynamic capabilities---the ability to sense opportunities, seize them, and transform organizational resources---operate differently in social enterprises because the "opportunity" involves social problems rather than market gaps. Their research reveals how individual social entrepreneurs' values shape organizational capability development.
Education Through Practice
Mukesh and Kenny (2024), with 5 citations, demonstrate social entrepreneurship education through value creation extracurricular activity. Their "value for value" approach engages students in creating real social value, finding that experiential learning produces deeper understanding of social enterprise dynamics than traditional classroom instruction.
Partnership Impact Measurement
Martinez-Valladares (2025) examines partnerships promoting social entrepreneurship through the case of "Yo emprendo," analyzing how collaborative relationships between universities, government, and social enterprises enable impact measurement capabilities that individual organizations cannot achieve alone.
Social Value Creation Modes
<
| Mode | Mechanism | Example | Measurability |
|---|
| Direct service | Providing goods/services to beneficiaries | Job training for unemployed | Moderate (outcomes trackable) |
| Market transformation | Changing industry practices | Fair trade supply chains | Difficult (attribution) |
| Systemic change | Policy influence, norm shifting | B-Corp movement | Very difficult (long-term) |
| Knowledge creation | Research, education, advocacy | Social enterprise incubators | Moderate (outputs) |
What To Watch
The emergence of "blended value" accounting---frameworks that integrate financial, social, and environmental value into a single reporting system---could transform how social enterprises communicate their impact. The International Sustainability Standards Board (ISSB) and EU's Corporate Sustainability Reporting Directive (CSRD) are creating standardized impact reporting requirements that may eventually extend to social enterprises, not just corporations.
References (8)
[1] Urmanaviciene, A. (2025). Social Value Creation in Social Entrepreneurship. Business Ethics and Leadership. ).27-40.2025.
[2] Myyrylainen, H., Torkkeli, L., & Brusila-Meltovaara, K. (2025). Dynamic Capabilities in Social Entrepreneurship. ECKM.
[3] Mukesh, H. V., Shetty, J., & Kenny, B. (2024). Social Entrepreneurship Education Through Value Creation. J. Social Entrepreneurship.
[4] Martinez-Valladares, M. (2025). Partnerships for social entrepreneurship impact. LEIRD.
Urmanaviciene, A. (2025). Social Value Creation in the Context of Social Entrepreneurship. Business Ethics and Leadership, 9(3), 27-40.
Myyrylรคinen, H., Torkkeli, L., & Brusila-Meltovaara, K. (2025). Dynamic Capabilities in Social Entrepreneurship: A Case Study on Social Value Creation. European Conference on Knowledge Management, 26(1), 686-694.
Mukesh, H. V., Shetty, J., Kenny, B., & McGuirk, H. (2024). Value for Value: Social Entrepreneurship Education Through Value Creation Extracurricular Activity. Journal of Social Entrepreneurship, 1-26.
Martรญnez-Valladares, M. (2025). Partnerships promoting social entrepreneurship: impact measurement case Yo emprendo. Proceedings of the 5th LACCEI International Multiconference on Entrepreneurship, Innovation and Regional Development (LEIRD 2025): "Entrepreneurship with Purpose: Social and Technological Innovation in the Age of AI".