Social enterprise takes centre stage in Scotland

Posted in: General News

Source: The Guardian / British Council

Social enterprise has a long and proud history in Scotland but the results of the country’s first comprehensive sector census (pdf) show that it is thriving today as never before.

We asked Gerry Higgins, the CEO of Glasgow-based CEIS and a founder of the Social Enterprise World Forum, to draw on his 30 years of experience in explaining some of the most striking findings.

What has the census told you about social enterprise in your country?

Social enterprises have been shown to be active in almost every part of the economy, from the creative industries to sustainable tourism.

Despite the historical roots of social enterprise, many of those active today have only emerged over the last decade and the pace of new enterprise formation appears to be accelerating each year.

As Jonathan Coburn of Social Value Lab has noted, “the overall scale of the social enterprise sector has come as a surprise to many; in terms of the number of social enterprises operating, their employment and economic contribution. The figures suggest a much larger sector than previously thought and one that appears to be growing fast.”

A large part of the social enterprise community in Scotland has grown under the radar over many years. It comprises small and micro enterprises strongly rooted in a single place – villages, towns or neighbourhoods – that manage important amenities and services such as community buildings, childcare and so on.

22% of Scottish social enterprises are based in the highlands and islands, which are home to only 9% of the population. What accounts for this?

In these areas social enterprise has become the natural way of doing business and the cornerstone of community life and wellbeing. It is critical to the region.

This also reflects 50 years of support from Highlands and Islands Enterprise (HIE), an agency that recognised the significance of social enterprise as a sustainable economic model long before others.

HIE understands that in communities with challenges of remoteness and distance from markets, the social and community enterprise sector has intrinsic importance. In these communities, the connections between businesses and communities are so close and there is an innate sense of people “doing things for themselves” which drives a vibrant social economy.

The social enterprise business model is an active choice for many of the region’s most innovative entrepreneurs and receives direct support, tailored products and services, account management and capital investment from HIE. The agency also provides support so that the leadership, innovation and the business dimensions of the sector can be strengthened.

60% of social enterprises are led by women and more than 70% report that more than half their employees are female. Why are they so much more inclusive than traditional businesses?

Gender equality is a longstanding problem in the commercial sector. For instance, only 9% of executive directorships in FTSE100 companies are held by women (pdf). In Scotland and elsewhere however, social enterprise appears not to have a glass ceiling preventing female professionals to progress to leadership levels. Or as the Social Enterprise UK 2013 sector survey noted, “social enterprise is the natural home of the female entrepreneur.”

The high participation rate of women in the sector may be partially due to the fact that social enterprises tend not to match commercial sector pay levels but often offer a greater range of secondary benefits. Flexible working is commonplace and many have family friendly working conditions which is a critical factor for many female employees.

Whether gender equality leads to democratic workplaces or vice versa, the traditions and values of social enterprise result in more participative and less hierarchical workplaces than in the commercial sector. These workplaces are based on equality, openness and fairness and this leads to better productivity and lower turnover as employees are engaged and motivated.

How and why has the Scottish government supported the sector?

The Scottish government has supported social enterprise over the last decade, with political leadership from the current deputy first minister and cabinet secretary for finance and the economy, John Swinney.

It has worked with the sector to develop an ecosystem for social enterprise, investing in business support, social investment, entrepreneurship development, leadership and education, opening markets and internationalisation. There are a range of reasons for this support.

The census points to a sector that has shown resilience in the face of economic recession and with employment now returning to pre-recession levels, jobs created in social enterprises are more likely to have balance in terms of equality, gender and pay.

Less cohesive economies don’t do as well because parts of society aren’t benefiting. Therefore one of the key roles of social enterprise is to provide pathways to employment for a wide range of people, especially those who need support.

The economy is expected to grow in the next decade but if the gap between rich and poor widens in this period, the national economic strategy will have failed.

Social enterprise bridges economic and social pillars and has a unique opportunity to assist the national economy to create opportunities where conventional businesses will not. After a decade of sector and government collaboration, work is now underway to co-produce a social enterprise strategy to reflect the potential and contribution of the sector through to 2025.

What do you hope the census will achieve?

Having this wealth of evidence at our disposal, the next stage is to continue to build a collective response, within government and across those organisations that represent and support the sector.

It enables us to set priorities and make informed choices about where we must invest to grow the sector. It also enables us to tell a convincing story about the sector and its potential, which is essential if we are to broaden the sources of support and finance available.

Download Social Enterprise in Scotland: Census 2015 here.

Content on this page was paid for and provided by the British Council, sponsor of the international social enterprise hub