Last week, TSRC and NCVO held a fascinating event where we explored the evidence behind the idea of the Big Society. As part of the TSRC’s social enterprise programme, I was thinking about how our work adds to some of the debates and how we can shed more light on this elusive concept.
Social enterprise activity can play a pivotal role in the pursuit of its core agendas related to active community engagement, localism, changes in public service delivery and the pursuit of social objectives by business. However, there remain fundamental gaps in our understanding of the potentialities and constraints of different types of social enterprises to take forward these roles. TSRC research is therefore focused upon three overarching questions: What can SEs do? What are the different types and approaches? How do they scale up?
What are social enterprises?
A multitude of definitions abound, but there is a general consensus that social enterprises engage in trading to help meet their social purpose. At TSRC, we do not aim to define social enterprise one way or another- we believe that is a political process for social enterprises and other stakeholders to lead on. However, there is certainly confusion, which adds to the confusion surrounding the Big Society concept.
What we know about current scale
Different types of social enterprise have different attributes that contribute to different elements of the Big Society agenda. Research demonstrates that social enterprises are able to generate close community support and understand local needs, build ‘social capital’, innovate, and find ways to deliver where state and market cannot (community shops, pubs and transport, for example). There are further claims made about their ability to deliver public services, as well as encourage greater participation by citizens. A misreading of this research has led some to claim that all social enterprises meet all of these criteria.
We also know that the scale of social enterprise activity varies according to definition. The frequently quoted figure of 62,000 social enterprises tells on only part of the story. It under-reports those in the third sector and includes a large proportion (89%) that many consider to be part of the private sector. This raises issues of the role of smaller businesses in the Big Society agenda.
Lastly, we know that there are variations by geography and age. Analysis shows a greater prevalence in London and the South West, and that older people are more likely to be involved in setting up and running social enterprises.
What we know about growth and social impact measurement
Growth through diversification and scaling up is demonstrated in recent work on understanding growth in particular sectors and requires an understanding of how this is initiated and financed. Middlesex University and London Early Years Foundation are also collaborating to examine scaling up through growth outside of the organisation such as through franchising, licensing, training and open networks for sharing good practice.
We know that measuring social value (e.g. through the use of social return on investment) is not common, and used predominantly as a marketing exercise rather than to maximise learning.
Finance in the form of loans and equity is required by some organisations, but on its own will not allow social enterprise to grow.
With this knowledge, what we need to know now is.....
- Where can we find untapped resources of social entrepreneurs in communities and the public sector?
- The Big Society agenda includes elements of encouraging spin outs from the public sector and communities having the right to run services, but how will the public perceive the concept of social enterprise as it becomes associated with a growing range of public service reforms related to efficiencies?
- If there is a growing interest in encouraging public service delivery by social enterprises, how can the public sector get the best out social enterprise’s innovative potential without co-opting it or crowding it out?
- If there is a desire to create a greater role for, and growth in scale of, social enterprise activity in the Big Society, how will social enterprises, commissioners and their investors consider risk in a changing economy and public service spending market place?