In Conversation

In conversation: Social enterprise

There are 55,000 social enterprises in the UK with a turnover of £27bn a year, but these two Fellows don’t believe the sector gets the profile or recognition it deserves. The Fellows are Jonathan Bland, chief executive of the Social Enterprise Coalition, the national organisation promoting social enterprise in the UK, and Andrew Robinson, a director of CCLA Investment Management Limited, a social enterprise that manages £5bn for 45,000 Third Sector organisations.
 
Jonathan Bland: It’s amazing to think that we now have cross party support for social enterprise, but there is still a massive job in raising awareness about what it actually means to the wider public. Many people still associate it with providing an income stream for voluntary organisations. Social enterprise is about a wide range of businesses harnessing the power of the market for the benefit of communities and individuals while being sustainable in financial terms.
 
Andrew Robinson: Thankfully, I think we have moved on from the perception that social enterprise is what people do if they can’t succeed at running a business in the mainstream economy. However, there are those who continue to trot out the Adam Smith quote about conducting a business for public good being “an affectation not very common among merchants”.
 
JB: I recently attended the Social Enterprise World Forum in Scotland and there were 400 people from 25 different countries, which demonstrates that social enterprise is a global movement. I sense a huge pent-up demand for people who do not want to split their lives into two parts where they make money in their corporate world and do good in their private life.
 
AR: I agree, but there are still some fundamental barriers. Social enterprises don’t appear very profitable, they seem incredibly complex and risky – so money from the capital markets is harder to access. Likewise, there are significant public sector prejudices and practices to overcome before they are to be seen to be a safe bet in terms of delivering public policy. But I think the Coalition has been doing a great job in trying to educate and increase awareness of their potential.
 
JB: Money is the motor for all business growth and I believe we can develop a vision for a more popular type of capitalism. I would describe it as a business revolution. Take the Cafédirect [Fairtrade pioneer] share issue: they raised £5m from investors and what was striking was that most of the investors were women, many of whom had never made an investment before. They were doing it because they wanted something meaningful for their children, but also because it would provide some wealth for them later in life.
 
AR: The Cafédirect story is very powerful. There are loads of others, too. The problem is they are all hidden in plain view. I believe before social enterprise will really take off in the UK there needs to be a better articulation of the underlying rationale about why it makes sense. We need compelling, accessible narratives. Too much energy is wasted – even at the RSA – discussing the future of business as usual and how we can make it more responsible. These are interesting discussions, but no fundamental change results. At the same time we have this emerging sector of hybrid social and economic enterprises that have huge potential to transform communities.
 
JB: I agree. For it to spread we need to connect with private consumers and make the proposition really meaningful for them. We can see that they respond by the popularity of Fairtrade products. I think there is also an opportunity around how government develops public service markets. Social enterprises can play a huge role in the way that we improve all kinds of services, such as health and social care.
 
AR: To underline that, I’d like to point out that the free market never has and never will take care of us all. Neither has charity, and the public sector is seriously struggling to cope. So the question is: how do we get this new way of working more embedded? It probably starts with those with enough humility to accept that the structures and assumptions we’ve inherited from the past need changing.
 
JB: For me, the challenge moving forward, and something I would like to invite Fellows to comment on, is: how do we take this from a debate about charities versus business and move it into what I have described as the business revolution? We need to expand the debate out of the political realm and take it to the heart of the business world, and into schools and universities so that social enterprise becomes a business model of choice for many people throughout the country and across the world.
 
If you have an interest in this subject area and would like to discuss it with other Fellows, email networks@rsa.org.uk.
 
For more on the Social Enterprise Coalition, visit www.socialenterprise.org.uk