Where Social Enterprise Sits?

Where Social Enterprise Sits?
Charles Leadbeater

29.11.07


One way of defining where social enterprise sits in the economy is this table with a continuum from mainly profitdriven, mainstream business at one end to purely voluntary, and non-market solutions at the other.


On the left-hand side of the grid below, profit is the main driving force, but brings social benefits in its wake as an unintended consequence.


On the right-hand side, in the voluntary, gift economy, profit plays no role as an incentive and social benefits are the deliberate and intentional goal of the activity.


In between are systems that work with a mix of motives, means and incentives.


Social enterprise increasingly shares common ground with more socially responsible mainstream businesses that sell fair trade products for example. Even mainstream, profit-maximising companies – private equity funds – are increasingly highlighting their social credentials and reinvesting in social entrepreneurs. The Gates and Skoll Foundations in the US are among the most ambitious and inventive funders of social enterprise. Mainstream businesses create products and services with a social value. The public sector increasingly relies on social enterprises as suppliers and the social enterprise sector
in turn relies on voluntary contributions as a form of subsidy. Social enterprises sustain themselves within the market, but often they do so by relying on non-market resources and motives.


Public policy to shape the role of social enterprise in social innovation would have to work on the overlaps and relations between these sectors rather than treat them in isolation. All these sectors can in different ways make a contribution to social innovation and social enterprise development.


 
Mainstream business
Socially responsible business
Social Enterprise
Public Service
Voluntarism

Inputs, finance
Financial and
Financial and
Ethical investment
Tax and
Donations, charity,

and resources
commodity
commodity markets
and fair trade
borrowing, public
giving

 
markets
 
sources
employment
 

 
 
 
 
 
 

Processes and
Value chain,
Greater attention
Heavily biased
Public service
Volunteering into

work
lean production,
to supply chain
towards social
value chains
social projects

 
just-in-time
management
inclusion and
combined with
 

 
 
for ethical and
environmental
contracting out
 

 
 
environmental issues
objectives
 
 

 
 
 
 
 
 

Outputs,
Consumer
Some green and fair
Green, fair trade
Access to public
Gift, given away,

consumer
markets selling
trade branding
and social inclusion
services, politically
no charge

markets
on price, quality
 
central to brands
determined nontraded,
 

 
and brand
 
 
limited
 

 
 
 
 
co. payment
 

 
 
 
 
 
 

Social value
Business
Business can be
Social goals are
Government
Giving culture

claim
generates jobs
done in a more
primary, business
essential to
underpins efforts

 
and profits, pays
socially responsible
is a way to achieve
provides nonmarket
at public good

 
taxes, allows
way – meeting
them – meeting
public
creation in all

 
philanthropy
social goals builds a
business goals
goods at scale
sectors, new

 
provides useful
better business
creates more social
which neither
wave of voluntary

 
goods and
 
impact
voluntary sector
solutions

 
services…
 
 
nor business can
 

 
 
 
 
 
 


 


To read the full paper, download it here  http://www.cabinetoffice.gov.uk/upload/assets/www.cabinetoffice.gov.uk/third_sector/social_enterprise_innovation.pdf