Social enterprise is coming

Sapling growing in handful of soil.

Everyone likes to think that they are living in the most exciting period in history – scientific marvels, giant technological advances, changes which redefine modernity. For me, whilst I may be persuaded to concede that the stretch of time from the mid-80s to our current twitter-era is not one of the apexes of historical significance, I am much less willing to concede that in the history of and rise of social enterprise, I am now in the right place at the right time witnessing something great.

I work for Social Enterprise UK (SEUK) – the national body representing social enterprises (think, Jamie Oliver’s Fifteen, Divine Chocolate and The Big Issue to name a few) – of which there are an estimated 68,000, contributing £24 billion to the economy, and most importantly, achieve fantastic social and environmental goals through doing good business.

The UK setting the standard for social enterprise

The UK is widely recognised as a trailblazer in social enterprise – SEUK used to host the odd two or three international delegations a year, we now host two or three a month. These delegations range from government departments to civil society organisations and universities, all wanting to learn from the UK’s experience with social enterprise.

More people are setting up social enterprises than ever before – in a national survey conducted in 2011, 14% of social enterprises stated they were two years old or younger. This is more than three times the percentage of traditional small and medium-sized enterprises (SMEs) where only 4% of them were two years old or younger. At SEUK, we are bombarded with queries about how to set up a social enterprise, so we created a guide specifically to address this, available free to download from our website.

This impressive start up figure, depicting a youthful and growing sector, is driven by various factors. The past decade has seen huge changes in consumer expectations, wanting greater transparency and integrity from the business they buy from (hello, horse meat scandal!) And more than that, a desire to make a positive impact from something as simple as a purchase – fair trade coffee, chocolate and bananas are just the tip of the iceberg.

CSR and the recession

In a recession, the world of those in need and those successfully getting by are pushed closer together; people are drawn to social enterprise as a vehicle to meet societal needs, but crucially, in a sustainable way and not relying on handouts. It is clear that this approach to business resonates with young people, who are often at the forefront of the movement, setting up and working in social enterprises that engage their generation and tackle problems such as youth unemployment and crime. Setting up a social enterprise gives people the opportunity to work hard for themselves and their communities – 39% of social enterprises work in 20% of the UK’s most deprived communities and create more jobs relative to turnover than mainstream SMEs. Social enterprises are also much more likely to be run by women and black and minority ethnic groups than traditional businesses.

Big business has sat up and taken note of all things social enterprise and are moving their CSR efforts away from classic philanthropy to more innovative, or dare I say, more enterprising ways of investing into their communities and society. All of the ‘Big 4’ audit firms have launched social enterprise support programmes in the last year.

The unique position that social enterprises hold in the UK economy has not gone unnoticed by Government which has come out strongly to support the growth of the sector. Initiatives such as Big Society Capital, the world’s first wholesale social investment bank investing £600m into the social enterprise sector has sent a clear positive signal encouraging more social entrepreneurs to take action.

There has never been a better time to set up a social enterprise, joining a growing sector where society profits and that the rest of the business sector is playing catch-up with.