Social enterprise plays a vital part in Scotland’s financial landscape
In today’s economic climate, with plummeting budgets and many areas of the public and private sector facing an uncertain future, social enterprise is more important than ever. Described as a business with a primarily social objective, social enterprises trade in all markets, selling goods and services to individual consumers, local authorities, government and private businesses. They exist to make a profit just like any private sector business, however, profits or surpluses are always reinvested in their social and environmental purposes.
With hundreds of social enterprises operating all over Britain, some high profile examples include The Big Issue magazine, The Wise Group, Divine Chocolate, Cornerstone, Edinburgh Bicycle Co-op, Glasgow Housing Association and the Homeless World Cup.
In March last year First Minister Alex Salmond pledged that Scotland would become an international hub for social enterprise, announcing a scheme to support global social business. He said: “The announcement of an annual programme to support global social enterprises, to be headquartered in Scotland, is a world first and a strong message of support for the third sector from Scottish ministers. Scotland is already the global headquarters for the Homeless World Cup and the International Network of Street Papers. The provision of a grant to encourage other enterprises to come to Scotland is a demonstration of our strong support for the work that international social enterprises carry out, both in Scotland and around the world.”
The Scottish Government said Scotland has played a leading role in developing the social enterprise model around the world. The programme announced by the First Minister is designed to encourage social enterprise with a genuine global reach to be based in Scotland. It features three key elements, including a headquarters grant of up to £20,000 per year, ministerial ambassadorial support and a referral to appropriate business development support.
Social Enterprise Scotland (SES) is an independent, Scottish, membership-led organisation, built and controlled by social enterprises. Duncan Thorp, parliamentary, policy and communications officer, said the organisation works to raise the profile of social enterprises among decision makers, whether that is at local or national level.
SES also organises the world’s biggest social enterprise event, the annual Social Enterprise Exchange, which is a trade fair and networking event and is taking place in Glasgow in March this year.
Thorp said people, pushed by the economic situation, are looking at different ways of working, which is leading to more thought around social enterprise. He said: “In terms of legislation, there are two big issues coming up. One is the Procurement Reform Bill and the other one is the Community Empowerment and Renewal Bill.
“With procurement, we’ve been talking about community benefit clauses for a long time and we want them to be made the norm in public sector contracts. Hopefully this is what the new Bill will do. When the public sector is considering contracts, they could use a community benefit clause and therefore employ a social enterprise and other third sector organisations. We are very pleased with this Bill and the potential it has and we want to ensure it is robust. Everyone talks about culture changes in [the] public sector and this is a big challenge but it is in their interest as well. If, for example, a council employs a social enterprise, it will have a wider social and economic impact on the community. It is not just about the on-paper costs, we are trying to get beyond that. We understand how difficult this is for public sector workers in the sense that they have budget challenges by department and it is hard for them to work with that and the bigger picture. We want community benefit clauses to be the norm, they should be used as a matter of course, there are exceptions to the rule but that should be the starting point.”
A major new initiative was launched recently to encourage and support social and public service innovation in Scotland. Social Innovation Scotland is a collaborative venture that has been formed as a partnership between the Hunter Centre for Entrepreneurship at Strathclyde University, Social Value Lab, and CEiS (Community Enterprise in Scotland). Having now become established as a not-for-profit centre, Social Innovation Scotland will embark on a programme of policy research, networking events, learning programmes, and collaborative challenges to help rethink the delivery of public services. Its particular emphasis is the role that communities and enterprising third sector organisations can play in supporting public service design and delivery.
Local Government Minister Derek MacKay said: “The Scottish Government is committed to reforming our public services to make sure they meet the needs of communities up and down the country and Social Innovation Scotland is a great example of how policy makers, social entrepreneurs and business leaders can join together to help inform the debate.”
The establishment of Social Innovation Scotland has been driven by the need to find more effective solutions to the pressing social challenges facing Scotland, and to address the associated pressures on its public services. Commenting on the focus of Social Innovation Scotland, Jonathan Coburn, founding director of Social Value Lab and Social Innovation Scotland, commented: “For me it’s about reshaping public services based on value rather than cost – radically redesigning services to deliver better outcomes with less resource. This is really tough, but the answers are already all out there. It’s often just a case of bringing together people from different backgrounds to look at these social challenges from new angles – local residents, third sector organisations, service designers, social entrepreneurs, business leaders, technologists, and frontline staff in our public services.”
Gerry Higgins, chief executive of CEiS and founder of the Social Enterprise World Forum, added: “There is [a] huge untapped reserve of ideas and learning from across the international community. This important initiative will help to systematically source and share new thinking from around the world. It will also help to reinforce Scotland’s international reputation as being at the forefront of social enterprise and social innovation.”
Run Native, the UK’s first social enterprise marketplace, is the innovative brainchild of Community Enterprise and has been up and running for about a month. It features social enterprises from all over the UK. For 25 years Community Enterprise has worked with community projects all over Scotland to help them grow into confident, creative, financially-viable organisations.
Douglas Westwater, executive director of Community Engagement, said: “A lot of the social enterprises we support have really fantastic products and services, all sorts of things from soap in Inverness to furniture in Edinburgh. The real problem they were having was selling them. Our marketing company was helping to a certain extent but lots of people were interested in online sales. Those two thought processes came together. We started to think that what was needed was a national online sales platform.
“Rather than people selling locally to a tiny audience, we wanted to increase the market for these people because they have very high quality products and the stories they are telling, the social change they’re bringing about by selling the products, is amazing. The growth in online sales is still high and the growth in ethical purchasing is increasing exponentially.
“The site went live about two weeks before Christmas and we’ve had a hugely positive response, every vendor on the site has made sales.
What is important to us, having gotten to know these organisations, is the huge human story behind them. The first thing people see is quality but we want customers to be buying into the story so they see the immediate difference their purchases make.”