Consumer power: the future of social enterprises

01 Feb 2012 Voices

Peter Holbrook explains why he wants to more actively engage consumers with social enterprise.

Peter Holbrook explains why he wants to more actively engage consumers with social enterprise.

The UK’s social enterprise sector continues to grow, both in size and stature. Successive governments have given it their backing, and the private sector is increasingly keen to forge partnerships to help them give back to society, often through their corporate responsibility activities. The next step is to light the touch paper of consumer power – this is what will secure the future of the movement.

While we’ve travelled some distance when it comes to doing business with consumers – our recent ‘State of Social Enterprise’ survey revealed that the most common main source of income for social enterprises is trading with the general public – there is still much to be done to help ordinary people understand, and buy from, social enterprise.

Campaigning

Consumers aren’t our only target. Our recent ‘Society Profits’ campaign also aims to help uncover ‘hidden social enterprises’ that exist across the UK – businesses out there which demonstrate a commitment to social enterprise values, but don’t yet know they are part of a vibrant and growing sector.

Getting them on board will create a larger and more powerful social enterprise market for consumers to choose from. This in turn will put increasing pressure on mainstream business to address its own values and look more seriously at its contribution to society.

Through campaigning, the telling of the human stories of those behind social enterprises, the tangible difference they’re making to people’s lives and the communities in which they’re operating, we will seek to get people interested in the movement and what it has to offer our society. The social enterprise movement is developing quickly because the status quo isn’t working – people want an alternative.

Issues of definition are contentious within the sector and confusing to those outside it. As the national body for social enterprise we know we must be clear, but pragmatic, when it comes to defining social enterprise. We need to be transparent about the basic concept of social enterprise – what it is, what it isn’t, and how people will know one when they see one. There’s a danger that it might be too early to impose a legal definition because it could halt the movement’s growth.

However, we believe that social enterprises should have a clear social mission set out in their governing documents; generate the majority of their income through trade; reinvest the majority of their profits; be autonomous, accountable and majority-owned; and be controlled in the interests of their social mission.

In some circumstances an asset lock is critical – most notably when it comes to the transfer of public services and public assets which should be protected from the risk of sale in the future. This is vital to protect social enterprise from accusations of privatisation by the back door as it seeks to take advantage of government backing for an increased role for the sector in the delivery of public services.

Expansion

The Public Services (Social Value) Bill is making good parliamentary progress. If enacted, it would signal a further expansion of the role of social enterprises in public sector markets. Currently the government spends more than £236bn procuring goods and services – making sure it does so with social value in mind could be enough to radically alter the economy.

We’ve been working closely with Chris White MP, and believe his bill is a critically important piece of legislation which, if passed, would help bring about social and economic recovery, and connect public spending with the real needs of communities.

However, the public sector makes up just one part of our economy. It’s important to be clear that social enterprise also has the potential to change private sector markets and behaviour.

We want to see social value given due weight across all parts of the business environment. Only then will we be able to reconnect businesses with creating long-term social, community and environmental value, and ensure that future economic growth serves people, and not the other way around.

Peter Holbrook is chief executive of Social Enterprise UK

 

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