Noting that the government has high expectations of social enterprise, Fiona Ramsay of Pilotlight Scotland asks: what can it deliver, and how will it rise to such a challenge?
In May, Jim Mather MSP, Minister for Enterprise, Energy and Tourism, addressed a gathering of almost 500 exhibitors and delegates at the S2S Social Enterprise Trade Fair in Dundee. In his speech he emphasised the critical role of social enterprise in helping the Scottish Government to ‘create a more successful country with opportunities for all to flourish.’ His view echoed that of Prime Minister, Gordon Brown, who pronounced at the Social Enterprise Coalition’s Voice 08 conference, that the social enterprise approach of ‘building social justice into business plans’ is crucial for Britain’s economic future.
It would seem that the government has high expectations of social enterprise, so exactly what can it deliver, and how will it rise to such a challenge?
The Scottish Social Enterprise Coalition defines social enterprise as ‘an organisation that trades in the market for a social purpose’. Cooperatives, trading arms of charities and social firms can all fall under the social enterprise umbrella. In Scotland, the potential for social enterprise is huge. At present it’s a relatively under-developed sector with around 3,000 organisations operating to deliver a social purpose throughout the nation. The turnover of these businesses has been calculated at £1 billion a year. They work in sectors as diverse as social care, recycling, retail, environmental services and skills training. It’s a sector which is experiencing rapid growth, there are currently over 55,000 social enterprises in the UK as a whole.
Social enterprises are businesses with primarily social objectives whose surpluses are principally reinvested in the business or in the community. They are businesses for which value is not just a financial concept. They add value to local communities, to employees and to the private and public sector. For example Community Connections, a Pilotlight partner organisation, runs a shop in the new Edinburgh Royal Infirmary in Craigmillar, one of Edinburgh’s most vulnerable communities. The building of the new hospital presented Community Connections with an opportunity to build links with the community and generate income at the same time. The shop sells gifts and also brokers a range of services offered by local businesses. The Pilotlight team are working with Janet Barnes, director of Community Connections, to help the shop be more successful, so that profits can be invested back into the charitable side of the organisation.
Social enterprises mean business, but they face the dual challenges of meeting social aims and developing a successful business that can compete in a commercial environment. Haven Products, a social firm that provides out-sourced solutions for non-core work for large companies, delivers a high quality service to the private sector at the same time as creating meaningful employment for people with disabilities. Managing director, David Whyte, stresses that it’s not enough to rely on the social conscience of its customers, ‘we must provide a real service…we do jobs that they need doing, and we do them as efficiently and as effectively as anyone else’.
The Scottish Government is looking to develop successful partnerships in order to facilitate local networking, unlock market opportunities and build business knowledge. Therefore the business advice and coaching which Pilotlight Scotland offers to the local community could not have come at a better time.
Sikh Sanjog, an Edinburgh based organisation working with Sikh women and children, recently launched a new social enterprise café to generate income to support other aspects of the organisation. Mary Hastie, director of Sikh Sanjog, sees this as the start of a new way of working. She hopes that the café can also develop a catering service, and become integral to the organisations aspirations to become a training centre. Her ideas and passion are plentiful but she requires business support to enable her to build capacity and sustainability within the organisation. Pilotlight Scotland is starting to help them focus on the business challenges that they face.
With business skills in place, financial performance can be monitored and evaluated. The social value plays an important role in influencing customers, supporters and investors but is more difficult to quantify. The Pilotlight model addresses this issue by encouraging organisations to assess their impact. At the end of each project, a full evaluation is carried out and shared with the Pilotlight team. Nationwide, a number of initiatives are being trialled in order to generate a widely recognisable means of measuring social value that can be simply and effectively communicated. This will be one of the key goals for social enterprises.
The success of social enterprise is important in Scotland because of the high level of social deprivation many of the communities face. One in five people lives in poverty and it is estimated that child poverty costs the government up to £2 billion in additional spending on public services and financial benefits. Poverty is related to a number of social disadvantages including drug misuse, unemployment and health problems. If social enterprise can form part of the solution in tackling disadvantage and creating a more prosperous Scotland, then it makes sense to create an environment, with successful evaluation strategies and productive partnerships, in which it can flourish. Let’s hope that the government can meet expectations to help create such an environment, so that social enterprise can, in turn, meet expectations to make a meaningful contribution to the Scottish economy. Pilotlight Scotland are looking forward to supporting the growth of this hugely important sector.
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More recently David has founded, ‘bootstrapped’ and sold two companies in the telecoms business and is embarking on his third. It is this experience of growing, and occasionally downsizing, his own organisations which David said was most useful in his work as a Pilotlighter with the UK Youth Parliament.
Sarah Brown had the following to say about her support for Pilotlight: