What's the point of business anyway?

What’s the point of businesses? Maybe, job making? On the face of it, creating jobs – assuming half decent conditions and fair pay – is a good thing. How about ‘wealth’ creation? But, again, what is that for? A good life, wealth for oneself, one’s family and future generations maybe.

I think, through business, that we can earn a good living but also that businesses should help to create a better world and fairer society through their activities. Captains - usually male - of industry may bash their fists on their walnut inlaid board-room tables and fume that business is about making money and that only charities do good but I think it vital that businesses, as a hugely important part of our society, have a duty to contribute more to it.
 
When I founded my business, eight years ago, I never wanted to be one of those business owners who bluster and whine about red tape. Also, I definitely did not want to be one of those people who you regularly see moaning about any attempt to give workers, society or the environment a break. Other than the occasional phone-slamming fury at HMRC’s lack of assistance I think I’ve stuck pretty much to those principles. Another thing I try not to be is cynical. I want to be optimistic, trusting even. My friends think I’m an idealist.
 
Business is a profound force in the world. Businesses do create jobs and profits. Taxes on these profits – not those squirrelled away in private offshore tax havens – fund our hospitals, schools and public services. Owners gain wealth. This wealth is supposed to trickle down to benefit us all. ‘Trickle’ says it all. If it was a ‘cascade’ or a ‘gush-down’ we might feel less angry about corporate greed. Trickle down is defunct and morally bankrupt as a concept. Wealth ossifies at the top. Rich get richer, poor stay poor. Both sides of the political spectrum say they recognise this. The Conservatives say they want to build a fairer Britain that works for everyone. Labour talks about the many not the few.
 
A key question is: at what cost is that wealth made? We have seen countless scandals based on profiteering that is often criminal – financial mis-selling, horse meat in burgers, fake breast implants, Paradise Papers, Panama Papers, siphoning off pension funds. And huge damage done to people, the environment and animals in the name of profit and, by association, business. 

Attempts to address business behaviour are met with scepticism from one side and complaints of over regulatory bureaucracy on the other. Corporate and social responsibility is dismissed as ‘greenwash’. Even ‘purpose’ – that latest buzzword – can be viewed cynically without proper certification, governance and action.
 
So how might a business contribute more, whilst still doing the day job? I think that contributing more leads to doing the day job better, more productively and ultimately more profitably. Doing good is also good business.
 
Business could start by paying the real living wage. Costs will increase in the short-term but long-term stability and productivity can be increased. Businesses could improve work-place well-being. A happy, healthy workforce will be more productive. Businesses could offer flexible working – encouraging family friendly working patterns. They could spend more in their supply chains locally and socially rather than at the cheapest rate. They could minimise any gender pay gap. They could adopt a diversity confident approach to employment. National government could even incentivise these behaviours with tax breaks.

Business is a powerful force but pursuit of profit alone can be damaging. Examples of egregious executive behaviour abound. But so do instances of businesses doing better – Richer Sounds, John Lewis and Riverford have all shown what can be done with innovative ownership and pay structures; B&Q and Marks and Spencer with supply chains.
 
We cannot wait for the government - paralysed by Brexit and lobbied to death by corporate interests - to act. We need to take action and the power ourselves - our great businesses can go further. And this, in a way, is the true purpose of business: to give people the agency to create a better world.
 
We all want to get on: get a good job, feel like our life has meaning. Earn a good living and make the world a better place. Let’s put this into the heart of our businesses too.

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.