When it comes to the macroeconomic perspective, there is still a persistent perception that a social enterprise is more like a charity than a “proper business”. Yet, there is a growing body of evidence and our personal experience which indicates that not only are social enterprises doing well, but they’re playing a vital role in economic growth.
The growth of the social economy is all down to the fact that businesses that have ‘a social purpose’ at the heart of their enterprise have proven to be the ones that are best equipped to meet today’s demand for sustainability and social change. Social enterprises have been shown to not only promote more inclusive growth by strengthening employability and skills, and creating jobs, but also to build a more diversified local economy by contributing to the wider institutional and economic transformation.
The Rise 0f Social Enterprises
At present, the UK is still lagging behind other countries in terms of its social enterprises, but their contribution is slowly becoming more recognised and appreciated. Quietly, and somewhat behind the scenes, social enterprise is revolutionising the economy, offering a brand-new way of doing business. Not only that, but social enterprises are achieving this by remaining true to their values and by allowing a more diverse array of business leaders to rise to the top.
Social enterprises today are worth around £60 billion to the UK’s economy, employing about two million people and representing around 3% of the country’s GDP (three times the size of the UK’s agricultural industry) and 5% of the UK’s employment, which is the same percentage of jobs as the UK’s creative industry sector. These figures just go to show how important social enterprises are becoming, and how they are slowly being included in the scope of economic strategies and policymaking.
A Contribution Driven by Social Purposes
Social enterprises are driven by responsibilities that extend far beyond the narrow scope of profit generation. As a sector, it makes a wider contribution to society outside its economic impact.
In what ways do social enterprises achieve this?
- Their businesses are more diverse, fairer and work towards serving their customers to the highest possible standard.
- Thanks to different incentives, they bring new thinking and innovation into the workplace.
- By focusing on society as a whole, they are proud of being rooted in their own communities, giving back to those that they serve on a daily basis.
The social enterprise economy currently contributes more in terms of tax than private organizations that have no social purpose. The top five co-operatives in the UK pay more in tax than Facebook, Amazon, Starbucks, Apple and eBay. More importantly, wider social economies are more likely to give back to their local communities. It’s been shown that customer-owned retailers will invest double their profit in their local area when compared to their competitors.
With all of this in mind, it’s clear that social enterprises are still an under-appreciated sector, but that is something that is changing. Now that the many contributions that they make are being acknowledged, the only way is up for social enterprise in the UK.