Social enterprise is only hope for poor

Social enterprise is only hope for poor 


Laurence Demarco
Regeneration & Renewal
11.08.06



Over the last 50 years, the UK has undergone profound change. Successive governments have sought, as a priority, to create a favourable environment for business and there have been advances in wealth unimaginable in the 1950s. But spectacular economic growth has its downsides.


The relentless pressure of technological advances has brought with it environmental and climate damage that our best science can’t even monitor.


The demands of keeping up with our accelerating economy mean that, in many homes, both adults need to work, bringing new strains to family life.


Traditional aspects of society, like participating in elections, are in decline and the public realm of equity and trust has become degraded.


But the change most disruptive to the cohesion of our society is increasing inequality: the gap between rich and poor has widened, with the benefits of sustained growth not being evenly shared among the population. As the Power inquiry reported this year: ‘There are permanently marginalised groups in society which live in permanent poverty, with low educational attainment, poor working and living conditions and a multiplicity of other deprivations associated with life on low or very low incomes.’


This poverty has become concentrated into particular areas of severe deprivation: those who can, leave; those who can’t – often outside formal work, – become increasingly marginalised. The private sector avoids these areas because the customers have no money. There are an estimated 3,000 neighbourhoods in the UK which are in effect ‘no-go areas’ for private investment.


One of the world’s leading social entrepreneurs Muhamud Yunus has said: ‘We cannot combat poverty with the orthodoxy of capitalism practiced today, but I argue that we can create a powerful alternative: a social consciousness-driven private sector, created by social entrepreneurs. The future of the world lies in the hands of these market-based social entrepreneurs.’


In the UK’s poorest communities, market mechanisms don’t work and public sector ‘partnerships’ only scratch the surface; it is only third sector activity that has any meaningful contact with citizens. Community-based social entrepreneurs and the businesses they create are our best chance of getting investment to the heart of our most discouraged communities.


The transfer of underused capital assets – land and property – to community owned development vehicles would activate a wave of enterprise and wealth creation where it is most needed.