Looking back, looking forward: David v Goliath in 2013?

Looking back, looking forward: David v Goliath in 2013?
The Guardian, by
Colin Crooks
20.12.12

A lot of money is chasing impact, and enterprise and impact are very different things. Enterprise is a way of doing things; it describes an activity and an approach. Impact just measures the ends; it is a much narrower measure.

For many enterprises measuring the impact will be enough. If for instance, the RNID can design a better hearing aid for sufferers and can raise the money to manufacture it on large scale that is clearly a tremendous outcome for all concerned: improved hearing for millions and income generation for a vital national charity.

But so much of the effectiveness of social enterprises is due to the way they do things and what motivates them. They engage with communities that others cannot touch and they tailor services with them to their specific needs. They take risks. They do so through a deep commitment to a place or involvement in a community. It simply isn’t realistic to try to bottle that sort of passion and recreate it.

The potential danger in this difference was exposed by SEUKs latest report: the Shadow State. It shows how a few very large companies have started to take over the running of public services. Already the report shows 25% of state services (£80bn worth) are now delivered by these large behemoths and that proportion is set to nearly double in the next year.

What is most galling about this is that they haven’t achieved that dominance through offering great value for money – as the "Shadow State" and as Locality’s "Diseconomies of Scale" report from September demonstrated. Nor have they done it through offering outstanding service as the disasters with G4S and the less well reported but no less shocking failure of Capita to run the Ministry of Justice’s language translation service show. No, this has been achieved through a sophisticated manipulation of a myopic, gullible and risk adverse government client and the constant ramping up of ever more complex tender conditions as barriers to competition. Each new condition designed to favour larger companies and to throttle innovation.

So in 2013 we will see the battle between scale (dressed up as impact) and social enterprise; large corporations with "social impact" departments backed by large investment funds against genuine social entrepreneurs using new legislation to promote social cohesion. Will the ever growing Goliath be beaten by the freshly empowered David?