Cool Confusion


Why social enterprises shouldn’t be ignored

Social Enterprise UK’s 2015 state of social enterprise survey has some interesting findings:

  • Social enterprises are being created at a faster rate than small and medium sized enterprises (SMEs)
  • 52% increased their turnover in the last year (compared to 40% of SMEs)
  • Over 75% are profitable or at breakeven
  • 73% earn more than three quarters of their income from trading.
  • 59% introduced new products/services last year
  • 41% created jobs in the last year (compared with 22% of SMEs)
  • 59% employ at least 1 person who is disadvantaged in the labour market
  • 40% are led by women, 31% have Black Asian Minority Ethnic directors and 40% have a director with a disability
  • The average pay ratio between social enterprise CEOs and the lowest paid staff is 3.6:1 (for FTSE 100 companies it is 150:1)

In summary, these businesses are profitable, innovative, creating jobs, reflecting a diverse and inclusive leadership. All the more surprising, therefore, that they seem to be largely ignored by many Local Enterprise Partnerships, Local authority economic development departments, Chambers of Commerce and other business promotion agencies.

Is it that the concept of social enterprise is complex and hard to understand? Surely not; social enterprise is a simple concept – business with a social and/or environmental benefit. Or is it because social enterprise comes from the not for profit sector – a sector that is not widely recognised as making much of a contribution to the economy? Again, it is difficult to understand that that might be the reason – this is a sector that is a significant employer and runs services and programmes to increase employability skills of some of those with the lowest educational and skills attainment. So, the answer is that we have no idea why it is still so ignored. If anyone can offer a reason, we’d be grateful – although we have a sneaky suspicion it is a case of the old problem, namely sector ‘blindness’ which pigeonholes us into activity on the periphery, but not in the same league as other sectors.