Social enterprises for a strong economy and a fairer society

There are two problems at the heart of Britain’s economy: that of driving fair, sustainable growth and that of boosting productivity. The focus has been, for too long, on the latter. We need a shift to investing in, buying from and supporting social enterprises.

We need an economy where businesses create decent work and the where the dividends of growth and prosperity are more equally shared. Check out your history books at the pages on Russia and France: if the rich get richer and the poor get poorer we can head, ultimately, into violent revolution.

The proceeds of growth are, too often, not shared fairly and this leaves many workers dispirited. Too many businesses are focused on minimising their tax bill, rather than contributing a fair share to fund public services. The largest social enterprises and co-operatives in the UK pay more in tax than Amazon, Facebook, Apple, Ebay and Starbucks combined.

Our local economic policy is fixated on productivity. It is a thorny problem: it takes us five days to produce something that Germans do in four. The reasons for this are vexed and no-one seems to be able to put their finger on what might be the problem and how to solve it.

We need a radical shift in the way we think about business and a move to a more socially enterprising economy. This is golden opportunity for the region to create productive, inclusive prosperity. Social enterprises not only create jobs and wealth, they do so more fairly and more innovatively than standard businesses and they also tackle social and environmental problems at the same time.

So, what are social enterprises? Simply put a social enterprise is a business with a good cause at its heart that dedicates its work and its profits towards achieving this good cause. My nine-year-old daughter described them as ‘businesses that help people’ which I thought pretty much nailed it. Nationally famous social enterprises include The Big Issue and Divine Chocolate. But did you know that there are social enterprise banks, book shops and bakeries? There are sport shops, florists, pharmaceutical companies and toilet paper makers. There are also gin, wine, whisky and beer producing social enterprises! Pretty much all sectors of the economy have a social enterprise in them somewhere. Although maybe not in the arms and tobacco industries.

Social enterprises can take many forms. They can be co-operatives, community businesses, trading charities, community interest companies or a myriad of other hybrid ethical structures. This can cause problems of definition but all are united by a common feature:  that of using business to tackle social or environmental problems.

Here in the South West we are blessed with some world leading social enterprises. We have The Eden Project and Jamie Oliver’s Fifteen Restaurant in Cornwall. The University of Plymouth was the world’s first accredited social enterprise university and Plymouth was the UK’s first ‘Social Enterprise City’ - a virtual brand that has led to over £6 million of investment into the city in the last three years. Livewell Southwest operates across large parts of Devon and is one of the largest health and social care social enterprises in the UK. Plymouth Energy Community, which raised over £3 million to put solar panels on schools and Plymouth’s Life Centre, has revolutionised the way we look at local energy generation, investment and community ownership.

Across Devon and Somerset there are well over a thousand social enterprises. Their combined turnover is £1.5 billion per year and they employ close to 33,000 people. That’s big - and small - business but, despite being a significant part of the economy that is better for all of us, it is still marginal in government policy making.

So back to why investing in social enterprise is an answer to solving the knotty problem of a fairer economy. Here are some killer facts. Social enterprises are more likely to innovate and are more profitable than standard businesses. Social enterprises are more likely to be led by women. They are starting up at a faster rate and are operating in the most disadvantaged parts of the region: where we most need businesses to work to create productive growth. Critically, social enterprises are also much more likely to pay more fairly: over three quarters of social enterprises report paying the living wage to their employees.

Social enterprise shows us that we can create a vision of a better world driven by business. And this is a pro-business and an unashamedly ‘for profit’ agenda. The more profit we make the more good things we can do with it.

It is social enterprises that are building the inclusive, prosperous, productive economy we need to rejuvenate our high streets, treat workers and pay women fairly and tackle deep rooted social and environmental issues.

Business can make us noble or be a tool for oppression and control. Increasing unfairness can lead to deep societal problems. We need to enhance and protect our environment whilst creating decent jobs. I think social enterprises can create solutions and offer an alternative, compelling vision. One based on business.

Refine/define: Why talking about what is a social enterprise is still important

“So you’re a social enterprise, eh? What does that mean then?” How many times have you been asked that question? How many times have you answered it but still aren’t convinced that they questioner has ‘got it’ or believes it?

The debate about the definition of social enterprise may well seem jaded and old news to those of us within the social enterprise community but it seems that a large proportion of the general public didn’t even realize there had been a debate going on. So the aforementioned question comes up time and time again. If we want to establish new audiences for social enterprise and push the concept into a wider public consciousness it is vitally important to maintain a public dialogue about ‘what is a social enterprise’.

No one really seems to question you in the same way if your business is a charity or Fairtrade or eco-friendly. There is an automatic assumption these are ‘good’ things. People know what these terms mean. They come with a nice badge, logo or number that tells the public they’ve been checked out and do indeed do what they say on the tin. If only there was a similar thing available to social enterprises…

Enter the Social Enterprise Mark. The Mark is the social enterprise equivalent of the Fairtrade logo or the Charity Commission number. The Social Enterprise Mark provides:

*A clear definition of what constitutes a social enterprise
*An instantly recognisable ‘stamp of approval’ to show that your business has been independently assessed and meets criteria to justifiably call itself a social enterprise
*A national community of like-minded ethical businesses for social enterprises to engage with
*A range of other benefits around marketing and support.

There is growing interest in the Social Enterprise Mark, particularly among large organisations like universities.Plymouth University is the first social enterprise university and has held the Mark since 2012. Another university is set to join. Many of the large health spin-outs also hold the Mark. These organizations provide services to huge numbers of people and have strong roles in public life in their respective towns, cities and areas. I would like to see more large healthcare providers really engage with the public around understanding that they are receiving great services from a local social enterprise. The Mark could help them do this.

As the social enterprise sector, and public awareness of it, continues to grow, so I hope that the Social Enterprise Mark will continue to flow into public consciousness and eventually become as recognizable as the Fairtrade logo. The Mark will evolve, I am sure, and we need an ongoing dialogue about what it means to be a social enterprise both within and outside the sector.

With the introduction of the Social Value Act in 2013 there is a requirement for social value and impact to be given more weight within commissioning of services. Consumers are looking to purchase ethical goods and for businesses to behave better. Surely then, the time is right for the Social Enterprise Mark to become a stamp of social value so that commissioners and customers alike will recognize social enterprises and be able to make more informed choices about the goods and services they buy and use.

I believe that social enterprises are better for the economy and for society. We need to articulate more clear what 'better' looks like of course. Social enterprises create wealth and jobs and also deliver environmental and social value. The Mark can be the guarantee that proves this.