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There’s a quiet tension that lives at the heart of social entrepreneurship. On one hand, these ventures are out to solve real problems: hunger, unemployment, education gaps, climate injustice. On the other, they still need to survive in markets built for profit. The question hangs in the air: can social enterprises actually compete?

To answer that, it helps to move away from the old economics textbook idea of competition where firms chase market share and race to the lowest price. Instead, think of competition as a living process, where organizations constantly adapt, learn, and find smarter ways to create value. That’s the view of the Resource Advantage Theory, a more contemporary way of understanding how businesses thrive. And it fits social enterprises surprisingly well.

The theory starts from a simple but profound assumption: not all organizations have or can easily get the same resources. Some have better technology. Others have stronger relationships, deeper knowledge, or more trust. These differences, when used well, become a source of advantage.

Now, social enterprises often look under-resourced in traditional terms — smaller budgets, lean teams, no deep-pocketed investors. But what they lack in capital, they often make up for in credibility, community ties, and moral legitimacy. These are resources too. And according to the Resource Advantage Theory, resources like these can be powerful especially because they’re hard to imitate.

Take, for instance, a social enterprise that trains rural women in sustainable agriculture. Its strength isn’t just in its business model, but in its trust capital the years of relationship-building, the local insights, the empathy. A big agribusiness might have the funds, but it can’t simply replicate that kind of embeddedness.

So yes, social enterprises compete. But they don’t compete in the same way. Their advantage comes from how they combine their social mission with their market logic mobilizing networks, purpose, and authenticity as strategic tools. They turn purpose into performance.

Of course, it’s not always neat. Balancing impact and income can feel like walking a tightrope. Some social enterprises overemphasize their mission and struggle to scale; others chase revenue and lose their soul. But when they find that equilibrium — when social value itself becomes the source of their market edge that’s where the magic happens.

So, can social enterprises compete?

Absolutely. Just not by the old rules. They compete by rewriting what “advantage” even means and by proving that doing good can, in fact, be a winning strategy.