State of the UK Social Entrepreneurship

6/18/2018

The UK is viewed by many other countries as a pioneer of social enterprise and the associated practices of social investment and social value. Government statistics identify around 70,000 social enterprises in the UK, contributing £24 billion to the economy and employing nearly a million people.

In "The Future of Business (State of Social Enterprise Survey 2017)" report the Chair of Social Enterprise UK (the national body for social enterprises in the UK) – Lord Victor Adebowale summarizes that in the last ten years there has been a wave of start-up dynamism with a new generation of businesses choosing the social enterprise approach: “embedding a social purpose in their DNA, acting commercially, and reinvesting their profits to create a more positive change”. Lord Victor also highlights that the social enterprises’ landscape in 2017 looks very different compared to the year of 2007 – pre-2008 crash, pre-austerity, pre-Brexit – and concludes that social enterprises represent the future of how everyone should be doing business. More precisely - by having a sustainable business model with a clear social purpose, working and employing in the most challenging areas and doing so in an accountable, fair and inclusive way.

The report “Social Enterprise in the UK” by the British Council also confirms the significant evolution in the social enterprise sector in the UK such as changes in the government’s approaches, increase in the number of incubators, a new focus on social investment and an enhanced emphasis on measuring social value.

The Choice of Social Enterprise

It is pivotal to state that based on a national representative sample by the Global Entrepreneurship Monitor 4.2% of the UK adult working population is estimated to be actively involved in socially entrepreneurial start-up activities whereas the RBS Enterprise Tracker survey in association with UnLtd (the leading provider of support to social entrepreneurs in the UK offering the largest such network in the world) suggests a fifth (19%) of aspiring entrepreneurs would choose to start a social enterprise. That would be highly needed considering the top societal challenges in the UK are poverty and financial insecurity, aging population, youth unemployment and health inequality.

Innovation of the Social Enterprises

According to the SEFORÏS Country Report “The State of Social Entrepreneurship in the UK” - written by a consortium of 12 organisations from 10 countries including Belgium, China, Germany, Hungary, Portugal, Romania, Russia, Spain, Sweden, and the UK - social enterprises are more involved in innovative activities such as creating new or significantly improved products, services and processes, compared to commercial enterprises. The report identifies that the main driver for innovation among social enterprises in the UK is to achieve social and environmental goals such as increasing the quality of social impact, spreading social impact or reducing environmental impact.

Also, as revealed in the SEFORÏS report, UK social enterprises create and catalyse inclusion and innovation by addressing social issues embedded within their mission and operational model, by employing individuals experiencing barriers of entering the labour market, by attracting population segments less likely to participate in commercial entrepreneurship (e.g. disabled individuals), by being inclusive in their ownership, governance, management and innovation practices.

Author
Partner @BASET
Caban Capital

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