Our guest Policy Researcher, Benjamin Stein, explores the power of social enterprise in a polarised society.
It’s no secret that the UK is hopelessly divided right now as to what sort of society we want to create. Whether it is Corbynites versus Tories or Brexiteers set against Remainers, there isn’t a whole lot we agree on. Simply put, the public conversation has become volatile, and we need some respite.
Healthy debate requires finding common ground and ideals that both sides share, before any compromises over lingering disagreements can begin. Unfortunately, disregarding a universal distain for our politicians’ incompetence, at present we have little to work with.
Enter social enterprise. Now, this is no panacea, but in social enterprises we have something that might just appeal to both sides of the political spectrum.
For the left, you have businesses that encapsulate the sort of compassion and social justice you long for. Social enterprises directly contribute toward a fairer, more equal society.
What provides hope for many on the left, is that social enterprise can soften the sting of neoliberal economics. Despite having an undeniable impact on global wealth, neoliberalism is criticised for its role in proliferating inequality and incentivising ‘irresponsible’ corporate behaviour. Duncan Green, strategic adviser for Oxfam, says of many modern dilemmas: “institutional debt, toxic air and water…loss of livelihoods for communities, political bribery…can be traced to corporate lack of responsibility”.
Essentially, in a world of free markets, big business has found that cutting ethical corners can be rewarded handsomely. Compounding matters further, huge profits are often siphoned toward CEOs and shareholders, leaving our workforce harmfully undervalued.
To the rescue, most of social enterprises’ profits are reinvested towards a designated social cause.
These causes include anything from homelessness, environmental conservation, to providing decent jobs for disabled people. Divine Chocolate provides one heart-warming case of many. They have designated the greatest portion of their shares to the Kuapa Kokoo farmers of Ghana. Compassion hasn’t hindered their success either: the company’s annual sales hit £12.6 million in 2016.
Social enterprises’ pay structures are also MUCH fairer than their SME counterparts, and their boardrooms display far greater diversity: people from Black and Minority Ethnic communities, Disabled people and Women are all gaining impressive representation in social enterprises.
Sounds like a Corbynites’ dream, eh? Well there’s plenty out there for Tories, too.
A fundamental belief of right-wing ideology is that government must not be expected to solve all of society’s problems. Some problems are thought to be simply beyond government capabilities.
So, what’s not to like about individual citizens and local communities using their entrepreneurial spirit to tackle the likes of food wastage or air pollution? All the while, eradicating social harms with funds that don’t originate from grants or donations, but from selling desired products and services to willing buyers. The capitalist dream! Right?
Fair pay: intelligent post-Brexit economics
The good news keeps coming. Supporting social enterprises is looking more and more like an intelligent macro-economic strategy post-Brexit. According to the Social Enterprise Report 2017, social enterprises are out-performing mainstream SMEs in turnover growth, innovation, and start up rates.
Most importantly though, 41% of social enterprises created jobs in 2016, almost doubling the effort of standard SMEs (22%). With the ever-looming threat of seismic job losses following our departure from the EU, here’s one Brexiteers and Remainers can appreciate together. After all, even the most argumentative among us struggle to poke holes in fairly-paid job creation.
Public awareness, spending power and quality
So there have we it, all pretty rosy right? Not quite, like any industry, social enterprises face many a battle. The biggest of these is public ignorance.
I like to think my friends and I are a relatively educated group, most of us have at least one degree; and yet, when speaking to them about this blog post, none had much to say on social enterprises. I’d be lying if I said I’d been hugely clued up, myself!
Recent research finds similar conclusions. Despite ‘UnLtd’ finding that 73% of consumers are more likely to buy from bands that prioritise purpose over profit, for most people ‘social enterprise’ means very little. To the lay-person, the term social enterprise doesn’t do enough to imply its definition.
And amongst those that can define it, social enterprises are unfairly associated with lower quality service. Mona Shah of Harry Specters, a company employing autistic people to make chocolates, deplores how “people think it’s a charity and equate that with a rubbish product…People…skip the part that says we have won 22 awards in four years”.
Therefore, for those of us in the know, it is our responsibility to get the word out and do what we can to help. For me, it starts with this blog post. It could be anything though, from spreading the word to a friend, buying the latest ‘Big Issue’ or getting your Christmas presents from a social enterprise. Tesco’s well-known motto comes to mind.
There are many brilliant reasons to throw our weight behind social enterprises right now. Our desire to see our communities enhanced is one, intelligent economics is most certainly another. But, if for nothing else, during such polarising times, in social enterprise we can finally find something that we can all agree on.
Benjamin Stein has an MA in Human Rights and Development and a BA in Politics from Swansea University. He writes on politics, charity and structural injustice. Ben's LinkedIn profile.