Development of social enterprises could be the making of Scotland

Development of social enterprises could be the making of Scotland

By Robert Crawford
Sunday Herald

If, as is hoped, the Executive is serious about introducing some new economic policy thinking, they could do a lot worse than look at the opportunities to provide services offered by social enterprise organisations (SEOs).

These are businesses which are run on a profitable basis, but do so to provide benefits for society. They take many forms, and while they are certainly not new, they are growing rapidly. Some work nationally, while others are purely local.

They embrace all sectors of the economy from financial services such as credit unions to tourism. For example, there is at least one very successful and award-winning boarding house in Edinburgh run by disabled people.
Data gathered last year estimated that there may be as many as 3000 operating across Scotland. About 35% of them are active in rural areas. Their collective turnover is assumed to be well in excess of £1 billion. By any standards these businesses have a contribution to make and the Executive should do all it can to facilitate their growth.

To its credit its predecessor in government launched a consultation document at the end of last year which sought to highlight the significance of SEOs to the economy. The new administration would be wise to dust it down and have a serious look at the opportunities discussed therein. These include employment growth for disadvantaged groups, and as a way of tackling the seemingly intractable NEET young people not in education, employment or training issue which is showing no signs of abating and where there appears to be a policy vacuum.

In my time at Glasgow Caledonian University, I have met with several SEO chief executives and have been impressed by their entrepreneurialism which is matched by their commitment to making a contribution to social progress. One of them was telling me about a terrific procurement model for HEIs higher education institutions which offers real savings to the latter as well as recycling the profits back into scholarships for poor overseas students.

This is far from atypical. In fact, many SEO managers I’ve met have a track record in building and then selling on their own businesses and want to use the experience to benefit society.

There is no shortage of ways the Executive and the public sector could consider tapping into SEOs and in so doing realise significant socio-economic gain. Here are just a few examples: local authority services such as street cleaning, gardening and refuse collection might all be undertaken by SEOs in more tax efficient and productive ways than are carried out at present.

A significant number of SEOs are already working in sustainable development and environmental schemes. Why not extend the scope of these by incentivising SEOs to share best practice and grow their businesses across the country?

If there is one area which SEOs know particularly well, it is working with highly disadvantaged groups in helping prepare them for gainful employment, yet this is one of the most difficult issues for mainstream public sector agencies to deal with. Why not pass across more of this work to bodies with a great track record in actually delivering?.

SEOs are, I’m convinced, a resource of significant potential to Scotland. They are driven by the profit-motive, but have a clear social agenda. The range of their activities is remarkable, embracing virtually every sector one can think of. Most have sound management, often forged in demanding private sector milieus and in many cases they are succeeding where the public sector has failed to make much progress.

I recently heard John McClelland, chairman of the Scottish Funding Council and author of the eponymous report on public sector procurement, extol the virtues of SEOs as potential suppliers to government and its agencies. He is right. The Executive could do a lot worse than to significantly invest in their growth and to encourage all parts of the public sector to open up their procurement processes to them, as McClelland argues.

I’m looking forward to some radical and innovative economic development policy-making from our new government. Facilitating and supporting SEO growth would be a good place to start.

Robert Crawford is executive director of business development and commercialisation, Glasgow Caledonian University