Industrial strategy is back in vogue. Theresa May’s goal of an economy that works for everyone is underpinned by a more strategic and active role for the state, stepping in to repair broken markets and nurture industries. Over the last 15 years, we have seen how social entrepreneurs can address market failure and deliver dynamic and inclusive growth. It is vital that the industrial strategy now fully recognises and embraces the contribution of social entrepreneurs in delivering economic success, vibrant places and resilient communities.
In a 2013 speech, Theresa May boiled down her vision of industrial strategy into five elements, all of which can be applied to social entrepreneurship and its contribution to an inclusive economy:
- Designing policy around industries that are of strategic value to the economy. Social enterprises are disproportionately active in the most deprived communities; have a more inclusive and diverse leadership than business as a whole; employ nearly a million people, with a particular focus on employing people who are distant from the labour market; and contribute £24bn to the economy. This strategic importance is starting to be recognised by government – the Ministers responsible for industry and civil society respectively recently held a joint meeting with social economy leaders to discuss the sector’s contribution to the industrial strategy and an inclusive economy – and it is critical that we build on this.
- Building skills in line with industrial need. Skills frameworks have not caught up with our changing economy. Around half of people aged 18-30 intend to start a business, and a quarter of these would choose to make it a social enterprise. If government is serious about building an entrepreneurial economy, it must actively nurture the skills of socially motivated entrepreneurs, and make it easier for people to pursue an entrepreneurial career. It is encouraging that government has backed a new apprenticeship in entrepreneurship and social entrepreneurship, which will go live in 2017.
- Identifying geographical clusters of industry. Social entrepreneurs operate all over the country, but taking a place-based approach can be helpful in galvanising action. For example, the Oxfordshire Social Entrepreneurship Partnership shows how universities, the private sector, social enterprises, local authorities and others can collaborate on innovation and ecosystem-building. It is critical that Local Enterprise Partnerships see social entrepreneurship as a way to deliver economic as well as social value, and that social entrepreneurs have a place in LEPs’ governance.
- Making the most of public procurement. As well as calling out bad business practice, central and local government could use procurement levers far more effectively to tilt the playing field in favour of business models that have social justice, sustainability and impact at their core. The Social Value Act should be strengthened and public procurement used as a tool for directing resources to where they can best contribute to an inclusive economy.
- Campaign to support entrepreneurs. The 2015 Conservative manifesto included a commitment to “give more people the power and support to start their own social enterprise”, but government has not explained how this will be done. Over a quarter of businesses seeking mainstream business support have a particularly social, environmental or community objective. The Mission-Led Business Review, due to publish its findings shortly, is an opportunity to embrace the current appetite for purposeful business, and nudge entrepreneurs to build social impact into their business models. This positive approach should be at the heart of what Chair of the Prime Minister’s Policy Board George Freeman MP calls 21st century responsible capitalism.
For the industrial strategy to take full account of the role that social entrepreneurs can play in delivering an inclusive economy, connections must be made across government. The cross-departmental remit of the new Government Inclusive Economy Unit is a good sign. It is also promising that Greg Clark MP and other BEIS Ministers have pledged to invite social entrepreneurs to the table as the industrial strategy is developed. Building social entrepreneurship into its delivery is the natural and exciting next step.
UnLtd is one of many civil society organisations submitting evidence to the Commission, our Call To Evidence is open until 31st December 2016.
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