The European Policies on Social Enterprises and the Catalonian Case

My aim in this second blog entry will be to offer a general overview of the most recent European policies on social enterprises and to go a little bit deeper on the approaches and understandings of social enterprises through a review of research carried out in Catalonia.

As I said in the previous blog post, even though policies oriented to the ‘Third Sector’ go back to the late 1980s, the core document, which most of current European policies regarding social entrepreneurship are based on, is the Social Business Initiative published in 2011. Since 2011, as the main European Commission web page related to social entrepreneurship observes (Supporting entrepreneurs and the self-employed – Social entrepreneurship), diverse policies and measures have been implemented and several initiatives have been carried out. Among them, significant contributions in the form of mappings and comparative projects, smaller reports focused on specific countries made in 2014, and further extensions carried out in 2016.

Image: Compilation of covers of different documents produced by the European Union about Social entrepreneurship.

After a non-systematic review of many of these documents it could be said that one of the core problems (which has theoretical, methodological, analytical and policy implementation consequences) has to do with the incommensurable diversity and richness that the concept of social enterprise tries to gather. The diversity and rhizomatic nature (Deleuze & Guattari, 2005, p.3) of the initiatives that “social entrepreneurship” tries to sum up in Europe has to do with the goals and philosophies of each initiative, its structure, organization and institutionalization level. But more importantly, this diversity is related to the ways in which the different Welfare States have been developed during the 20^th century in Europe (Sping-Andersen, 1990). More precisely, the current multiplicity of forms that these activities show is directly related to the ways in which the productive systems (including cities and neighbourhoods), their working regimes, and their associated welfare systems, have been reshaped in the last thirty years. From this point of view, as I’ll argue, the different austerity measures implemented in the European States after the Global Financial Crisis would be the latest “update” of this trend (Lorey, 2015; Kelly and Pike, 2017; Alonso and Fernández Rodríguez, 2018).

Social enterprises in the European Union

European countries with specific legal forms or statutes for social enterprises. Image retrieved from: A map of social enterprises and their eco-systems in Europe. p. 4.

To begin with, and broadening the definition of social entrepreneurship that I suggested in the last blog post, the European Commission uses the term to account for the following types of business*:

• Those for who the social or societal objective of the common good is the reason for the commercial activity, often in the form of a high level of social innovation
• Those whose profits are mainly reinvested to achieve this social objective
• Those where the method of organisation or the ownership system reflects the enterprise’s mission, using democratic or participatory principles or focusing on social justice

*For a more academic (and complex) operationalization of the notion that reflects the diverse understandings of social enterprises in Europe, it is worth reading the first part of the report: “Social enterprises and their eco-systems: developments in Europe” (Borzaga, & Galer, 2016: 8-13).

In the EU there are multiple legal forms that a social enterprise can adopt. They can operate as cooperatives; as private companies limited by guarantee (which some of them are mutual); and many of them are non-profit-distributing organisations (including provident societies, associations, voluntary organisations, charities and foundations). Operating in fields such as work integration, personal social services, local development of disadvantaged areas and collectives, environmental protection, arts, sports, culture preservation, etc., the concept covers a really wide “social field”. In the 20^th century this space, at least in western industrialized countries, has been occupied by the church (or philanthropic collectives close to it), the welfare state, trade unions and a whole range of associations, including governmental organizations, some social movements, and diverse collectives (Baglioni, 2017, p. 2329). To some extent, it could be said that one of the main features of this “social field” was being “outside” the market – even though it was an effect of the market development in the industrialized states frame, and it operated, in some cases, as a functional externalization zone, and/or a reproductive area for it. In this sense, the notion of social enterprises fostered by the European Commission, as it stresses the business aspect of these activities, redefines this field placing it in the semantic area of the market driven economy. The closing slogan of the promotional video about these European social entrepreneurship policies makes it clear: “Business with a human touch” — implying that the EU now takes for granted, as a departure point, that “all of them are business”.

Video retrieved from: http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=2649

Social Enterprises in Europe: tensions, limits, possibilities

Many social-enterprises are structured and obey certain logics of alternative economies —solidarity, sustainability, fair trade, etc.— or have their origins in social movements. The imperative to adopt enterprise forms of management and a clear business ethos on behalf of arguments such as efficiency, is relatively new (at least in some countries). For example, the European Commission shows its determination to supporting social economy through The Start-up and Scale-up Initiative, a political “tool” designed for promoting, developing and growing conventional for-profit start-ups and small and medium enterprises:

Image retrieved from: http://ec.europa.eu/growth/smes_en

In this sense, the main proposals of this initiative revolve around the objectives of removing barriers for start-ups to scale up in the single market; creating better opportunities for partnership, commercial opportunities and skills; facilitating access to finance, etc. Overall, and as it was pointed out previously, while these kinds of support oriented to the market might be helpful for the institutionalization of some social-enterprises, there is no doubt that they can also be quite problematic for others. Beyond the possible contradictions with the socially oriented goals that are central to their missions, social enterprises “have proved to be resilient [to the Global Financial Crisis]” precisely because of their small size, their community based nature, their self-managing ability as small organizations and, very importantly, the personal commitment of their participants (an engagement of the employees that every conventional enterprise or public institution desires to have). In this vein, the “Social enterprises and their eco-systems: developments in Europe” (Borzaga, & Galer, 2016) report stresses that:

Social enterprises’ success factors only partially coincide with those of mainstream enterprises (…) neither legal recognition nor access to finance are per se sufficient conditions for boosting social enterprise multiplication. (…) Key drivers boosting social enterprise’s development and scaling up include a wider recognition on the part of national governments and the definition of consistent public policies, including public procurement strategies that fully acknowledge the special nature of social enterprises (…) (pp.45-46)

In this sense, the problems and debates regarding the definition of social entrepreneurship remains wide open, up to the point that in some contexts there are initiatives that explicitly refuse to be categorized in that way (Borzaga, & Galera, 2016: 17; Molina et al. 2017: 22). These cases show us that the category is by no means neutral. Thus, these sort of resistances have to be understood in a context where the rise of the concept in certain countries (as a top-down landing concept) is directly related with long term precarisation processes and the neoliberal reorganization of the Welfare State through a myriad of austerity measures. The arguments for fostering social enterprises that are given in an early policy brief shared by the European Commission and the OECD point out the displacement sketched in the closure of my previous post:

Working with social enterprises and promoting their development can result in short and long-term gains for public budgets through reduced public expenditures and increased tax revenues compared with other methods of addressing social needs. (p. 3 and p.12)

In this context, it is interesting to quote an argument about consequences of the former proposal as it is developed in the Editorial of a recently published special issue on Social Enterprises and Welfare regimes in Europe*:

[The social enterprise sector] has promoted genuine innovations in terms of increased capacity to reach specific vulnerable groups, as well as in terms of capacity to deliver new services. However, such an innovation has often been pursued in combination with public action retrenchment, sometimes helping to justify it, with consequences on people’s lives (…) (Baglioni, 2017 p. 2337)

* For anyone interested in this kind of debates (and conflicts) this publication is an important work that covers different European states with contributions of independent researchers.

Overall, the conclusions of the Spanish report  Social enterprises and their eco-systems: A European mapping report, also written by independent academics, sums up quite effectively the main debates that are taking place around the growth of social-entrepreneurship both in Spain and in Europe:

The main discussion topics revolve around the position of social enterprises in relation to the social economy, the level of constraint on profit distribution, the source of funding to be considered a social enterprise, the need to create a social enterprise label and the economic role of these organisations. In all, these issues point toward the wider debate of whether social enterprises can best be understood as an innovative institutional tool for a new system of social welfare or as an excuse to justify the withdrawal of public authorities from the provision of certain services. (p. 50)

Social Enterprises in Catalonia

To further develop the idea that these grammars of enterprise have a “local vocabulary” or a “local dialect”, I will review some interesting empirical research centred on the social enterprises carried out in Catalonia (Spain) by a research group of the Autonomous University of Barcelona titled: Social entrepreneurship: local embeddedness, social networking sites and theoretical development.

To start with it has to be taken in to consideration that in Catalonia, as is the case in the Basque country, there is a strong tradition of co-operativism and social movements that somehow have operated as the substrate for the contemporary emergence and “success” of social entrepreneurship. Without that background it is difficult to understand the current configuration of the field of social and alternative economies in Catalonia.

According to the most significant works published out of this research (Valenzuela-García et al., 2015; Molina et al, 2017 —this one in English), one of the main events that explains the emergence of the concept of social entrepreneurship in Spain around 2010 has to do with the transformation of the Saving Banks (Cajas de Ahorros) into ordinary commercial banks. Saving banks were, historically, public, non-profit, financial institutions owned by the provincial governments and controlled by local political representatives. The original aim of Saving Banks was to encourage thrift among the very poor and the emerging working class, and their profits were reinvested in diverse social programs and welfare projects. In the last decades of the 20^th century, thanks to the incentives of the governments, they evolved up to the point to compete with commercial banks, and in 2008 they still represented half of the Spanish financial sector. Even though they were not exempt from instances of corruption and complaints about dubious administration, they administered significant budgets for all kinds of social expenditures. Through direct and indirect public funding these financial institutions enabled and fostered areas of activity that were occupied by organizations from the “social economy” and the “third sector economy” (Valenzuela-García et al., 2015, pp. 182). After the GFC, the vacuum left after the disappearance and/or privatization of these Saving Banks (and the consequent extinction of the programs they were funding), has been partially occupied by foundations of conventional commercial banks and multinational companies under the framework of responsible banking (Molina et al, 2017, pp. 6). These foundations, supported by local administration and in collaboration with different business schools, started to develop programs to foster social-entrepreneurship by offering access to financing, counselling, training, and networks to “promising” social ventures. The intervention of these agents made social-entrepreneurship appear as a “new” space —a new grammar— where most of the organizations, cooperatives, associations and collectives had to move, redefine themselves, and “compete” in order to maintain their activities (Valenzuela-García et al., 2015, pp. 182). These developments, alongside extreme austerity measures imposed in Spain, have seen many citizens forge new solidarity and alternative economy initiatives, making this generic analytical space of “social economy” even bigger and more diverse.

Interestingly, as a strategy to better tackle all this complexity, the authors of the research conceptualized that space, following Fligstein and MacAdam (2011), as an unsettled Strategic Action Field (SAF) (Molina et al, 2017, pp. 19). In this field banks and multinational companies, foundations, business schools and public administrations alike promote the label of “social entrepreneurship” through diverse incentives. At the same time other groups claiming the same social/environmental goals contest their market-oriented definition of the field (Molina et al, 2017, p.1). The authors of the research stress that the former agents have enabled and stabilized a prescriptive and tautological definition of social entrepreneurship that defines that a social enterprise is any kind of profit or non-profit venture with social objectives (Valenzuela-García et al., 2015, pp. 181). In addition, the concept seems also to fulfil a marketing strategy by associating banks and their foundations with positive social and environmental values precisely in times of a deep discredit and financial downturn (Molina et al, 2017, pp. 20).

In this scenario, as has been done in the Art-Based Social Enterprises Project, the research group made a mapping of the Catalonian social-enterprises that is represented in the image below:

Map of the social/environmental organizations/initiatives in Catalonia. Image elaborated from their database and retrieved from Molina et al (2017, pp. 10)

After completing a complex, mixed method fieldwork (in which together with ethnographies, in depth interviews and social network analyses, they built up a database of more than three hundred social-enterprises), they established an analytical continuum with two extremes. On one side they locate the market oriented social enterprises which more or less fits with the “official” definition of the social entrepreneurship. On the other side they locate the exchange-oriented initiatives that in some cases reject the category of social enterprises. Along this continuum they elaborate a significant analytical typology composed of “the displaced”, “the converted”, “the chosen” and the “challengers” (Valenzuela-García et al., 2015, pp. 183).

The first category represents professionals and other people who used to work as social workers or had a background in integration services. Regardless of their “genuine” commitment to social and environmental values, they seem to have moved to this field adopting the label of social entrepreneurship as a self-employment strategy in response to unemployment, to present themselves well in public spaces, as well as for applying to new funding programs. “The converted” type brings together those non-profit organizations which have transformed to operate as commercial business after the reduction or disappearance of the public funding they used to be supported by. Both “types” have chosen this label due to the positive image associated with it, and because it emphasizes the collective nature of the ventures —in accordance with the strong cooperative tradition in Catalonia (Molina et al, 2017, pp. 22). Those categorized as “chosen” represent those initiatives that fit well with the “official” market-oriented definition of social enterprise. These types have been acknowledged by public institutions and agencies and have received awards and funding that have boosted enormously their capacity of action. In other words, the “chosen” are mainly the ventures that are presented by the media as paradigmatic examples of successful social enterprises. Finally, at the other end of the continuum are “the challengers”, a large, complex range of collaborative initiatives close to anti-market and anti-capitalist philosophies. In developing similar projects, and showing the same post-materialistic values (Inglehart, 1977, 1989) of the other types, they reject the use of the term “social entrepreneurship” in the sense that, among other things, they do not agree with the presence of actors such as banks or foundations in the field (Molina et al, 2017, p. 22).

The authors develop these ideas with more detail, care and accuracy than I’m doing here and I strongly recommend reading their research. Among all the complexities, controversies and problems that revolve around the “landing” of the concept of social-entrepreneurship in Catalonia, it is worth noting how, depending on the background, interests, values and objectives of each agent in the field, this global grammar of social-entrepreneurship acquires different accents, diverse meanings, uses and purposes:

(…) in this complex societal transformation, “social entrepreneurs” are primarily those individuals who are awarded as such by homonymous funding programs. This is mostly an urban phenomenon, whose dwellers are facing profound societal changes, to which they are reacting with initiatives more suited to their values, education, and material conditions of life in a market economy. Possibly, we are facing a global trend. On the other hand, other people with the same social/environmental concerns, and the same capacity to mobilize resources for “changing the world,” are comfortably installed either in the cooperative or in anti-market sectors (Molina et al, 2017, pp. 22).

A number of opportunities present themselves in thinking about the social enterprise field, its emergence in contexts where global social, economic and political disruptions and change play out in different ways in different places, in different histories and different presents. These opportunities include what we can learn from recognising, listening to, and paying close attention to these different vocabularies, these different accents, these different voices. I will explore a number of these possibilities in my final post.

Bibliography:

ALONSO, L. E. & FERNÁNDEZ RODRÍGUEZ, C. J. 2018. Poder y sacrificio. Los nuevos discursos de la empresa, Madrid, Siglo XXI.

BAGLINONI, S. 2017. A Remedy for All Sins? Introducing a Special Issue on Social Enterprises and Welfare Regimes in Europe. Voluntas: International Journal of Voluntary and Nonprofit Organization, 28 (6), 2325-2338.

BORZAGA, C. & GALER, G. 2016. Social Enterprises and their eco-systems: developments in Europe. Directorate-General for Employment, Social Affairs and Inclusion, Brussels, European Commission.

DELEUZE, G., & GUATTARI, F. 2004. A thousand plateaus: Capitalism and schizophrenia. University of Minnesota Press, London.

ESPING-ANDERSEN, G. 1990. The three worlds of welfare capitalism, Cambridge, Polity Press.

FLIGSTEIN, N., & MCADAM, D. 2011. Towards a general theory of strategic action fields. Sociological Theory, 29(1), 1–26.

INGLEHART, R. (1977). The silent revolution. Princeton: Princeton University Press.

INGLEHART, R. (1989). Culture Shift in Advanced Industrial Society. Princeton: Princeton University Press.

KELLY, P., & PIKE, J. (Eds.). 2017. Neo-Liberalism and Austerity. The Moral Economies of Young People’s Health and Well-being, London, Palgrave-Macmillan.

LOREY, I. 2015. State of Insecurity : Government of the precarious, London, Verso.

MOLINA, J. L., VALENZUELA-GARCÍA, H., LUBBERS, M. J., ESCRIBANO, P. & LOBATO, M. M. 2017. “The Cowl Does Make The Monk”: Understanding the Emergence of Social Entrepreneurship in Times of Downturn. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, Special Issue, 1-24.

VALENZUELA-GARCÍA, H., MOLINA, J. L., LUBBERS, M. J. & LOBATO, M. M. 2015. Empresas sociales en Cataluña. ¿Cambio de paradigma o estrategia de clase media? Otra Economía,, 9, 177-186.

Call for participants: Australian Social Enterprise Project, RMIT and Melbourne University

Are you a stakeholder/manager/coordinator/teacher in an Australian Social Enterprise? Do you run programs that have an arts (fashion, dance, visual arts, creative writing, crafts, drama) component? We invite you to participate in our research project funded by the Australian Research Council.

Participation will involve a one-on-one interview of approximately 1 hour  (or less) in length with a member of the project team (listed in the above flyer).

The purpose of the research is to understand how social enterprises engaged in arts activities manage education, training and work transitions, and support the health and well-being of young people.

Please contact Perri Campbell for further information at Perri.Campbell@rmit.edu.au

 

 

Finding Australia’s Social Enterprise Sector – FASES

Social enterprises are organisations that:

• Are led by an economic, social, cultural, or environmental mission consistent with a public or community benefit;
• Trade to fulfil their mission;
• Derive a substantial portion of their income from trade;
• and Reinvest the majority of their profit/surplus in the fulfilment of their mission (Barraket et al, 2016a: 3).

In this post we have a look at the Social Traders and Swinburne University reports on the ‘Finding Australia’s Social Enterprise Sector’ (FASES) research project. As we mentioned in our previous post there are a number of factors that support and limit the growth of the social enterprise (SE) sector in Australia, and the development and impact of SEs. The following summary from the 2016 FASES report provides a good snapshot of what’s going on in the Australian SE sector: 

Overall findings

(Barraket et al, 2016b: 9).

In their 2010 FASES report Barraket et al (2010: 8) argued that little was known about Australia’s Social Enterprise Sector due in part to a lack of self-identifying among SEs; not all SEs operating as such labelled themselves as such. They said:

… it is clear that the language of social enterprise does not yet have distinct meaning for many civil society organisations and businesses in this country; more than 150 organisations commenced the survey and were filtered out on the basis that they were either not for profits that did not trade or profit maximising businesses that were not led by public or community benefit (Barraket et al, 2010: 36).

SEs also take many different forms and operate under different legal structures which means they are not always visible in the same ways as businesses in the private sector. Since 2010 the FASES project has identified a number of key facts and defining qualities illuminating the SE sector.

According to the 2010 and 2016 Full Reports (Barraket et al, 2010: 3 and Barraket et al, 2016a: 3) there are more than 20,000 SE operating in Australia with diverse missions and beneficiaries. The most popular mission identified in the report was:

… creating meaningful employment opportunities for people from a specific group, and developing new solutions to social, cultural, economic or environmental problems.

Interestingly, this is different from the 2010 report findings which identified ‘creating opportunities for people to participate in their community’ as the most popular mission (Barraket et al, 2016a: 5). The growing interest in employment is no surprise given the growing unemployment rate in Australia, which particularly affects young people. The Trading Economics website reports a decrease in the youth unemployment rate between May and April of 2017, however young people are enduring the unwanted effects and consequences of a lack of employment options and meaningful full time work.

Almost one-third of Australian young people are unemployed or underemployed, the highest level in 40 years, according to a report released on Monday.

The rate of underemployment – now at 18% – has become an entrenched feature of the youth labour market, according to the Generation Stalled report, commissioned by the Brotherhood of St Laurence (Davidson, 2017 March).

And…

A lack of full-time job prospects and an increasingly tense world has left a generation of Australia’s young people feeling bleak about their future (Clarke, 2017 February).

SEs reflect social and economic concerns as they operate mostly in local and regional markets with the aim of fulfilling missions that resonate at local and regional levels. There are fewer SEs that operate in international markets or aim to address international issues (Barraket et al, 2016a: 4). This finding was reflected in our own modest search of Arts based social enterprises in Australia. We found that when SEs do focus their attention on international issues, they often adopt a ‘Fair Trade’ ethic and source or support the import of handcrafted goods to be sold in Australia. Rarely were there programs (i.e. Transitional Labour Market Programs) attached to these SEs.

Similarly to 2010, and mirroring the mainstream economy, the sector includes small, medium and large enterprises, with the majority in our sample being small. The 2016 study again finds social enterprises are involved in all forms of economic production, including retail, wholesale, and manufacturing. However, they operate primarily within the service economy, with 68% of the sample providing services for a fee (Barraket et al, 2016a: 4).

In 2010 organisations participating in the FASES research project were asked to report on their income and expenditure (for the 2007-2008 financial year). The reported annual turnover ranged from zero to $68 million (with a total reported turnover within the sample of 168 organisations of $477 193 850). In 2016 that annual turnover ranged from zero to $199 million (from a sample of 189 enterprises) (Barraket et ala, 2016: 22).

In terms of growth and development opportunities, the FASES 2016 data shows a growth in ‘new entrants to the field, with 33.8% of the study’s sample being between two and five years old’. While development opportunities lie in: ‘social procurement; quasi-market development; and opportunities to grow impacts through supply chain development’ (Barraket et al, 2016a: 3). These modes of development are supported by the Victorian Social Enterprise Strategy which gives particular attention to social procurement and the ways in which SEs can contribute to and fit into the market economy. We discussed our concerns with this trend in earlier posts…

Finally, they identified a number external and internal factors constraining the growth of social business and impact in Australia. Limiting external factors include:

1. a patchy ecosystem for social enterprise start-up and growth, including limited geographic spread of intermediaries and insufficient opportunities for peer to peer learning and development;
2. the continuing piecemeal awareness of and support for social enterprise development by Australian governments;
3. and, limited public awareness of social enterprises and their work.
4. the lack of suitable funding for SEs at different stages of development (Barraket et al, 2016a: 5).

In terms of internal constraints the 2016 report identified:

1. organisational governance as both a key enabler and a key inhibitor
   of social enterprise performance.
2. Accessing suitably skilled staff and adapting workforce profiles as
   organisations grew and changed was also identified as a problem (Barraket et al, 2016a: 4).

These barriers have consequences for the Impact social enterprises make, that is the effectiveness of their work and how they are able to carry out their mission.

 

Supporting the Potential of Social Enterprises 

The 2016 report analysis suggests a number of ways in which the SES can be supported in pursuit of their missions and social impact. These following recommendations are informed by workshops with SEs:

1. Policy development

When asked about how the SE sector in Australia could be supported and the role of the government, more than 80% of respondents thought that government policy support would create new opportunities and generate growth. Activating SE though ‘traditional procurement laws of government’ was suggested (Barraket et al, 2016b: 15).

2. Building a more cohesive ecosystem

Better support during the start up phase was called for which would include: greater availability of intermediaries; more opportunities for peer-to-peer learning; cohesive and continuing support from the Australian Government; greater public awareness of social enterprises and their work (Barraket et al, 2016b: 16).

3. Developing appropriate and accessible forms of finance

Many respondents called for better, more suitable financial support at different stages of development. Because of their location some SEs are not able to access funding, particularly those outside metropolitan areas.

(Barraket et al, 2016a: 9)

The right financial support at the right time can make a big difference (Barraket et al, 2016b: 17).

… philanthropy appears to be playing a proportionately more significant – albeit still relatively small – role in financially supporting social enterprises, particularly those in start-up development since 2010. This may suggest a growing awareness of social enterprise by philanthropy, and the extension of some partnerships between philanthropy and not for profit organisations that are now exploring social enterprise as an option for increasing their impacts or improving their financial viability (Barraket et al, 2016a: 32).

4. Impact measurement tools

While impact measurement is largely regarded as a contested and complex issues for SEs, Barraket et al (2016: 18) suggest that more accessible, comparable and affordable impact measurement tools are needed to help articulate the social impact of SEs (Barraket et al, 2016b: 18).

Additional survey research suggests the costs of undertaking impact measurement are prohibitive for many social enterprises (Barraket et al, 2016a: 31).

Continuing lack of convention around measuring social impacts, and lack of  availability of affordable options to do this work, was a frequently cited constraint on social enterprises both understanding and extending their positive impacts; practice in this regard appears to have remained stable over the last two waves of FASES.

Major opportunities identified for increasing social (or environmental) impacts of social enterprises included ethical supply chain development – including between social enterprises – and replication or, less frequently cited, scaling up of social enterprises (Barraket et al, 2016a: 32).

 

References

Barraket, J., M. O. Collyer,  and Anderson, H. (2010) ‘Finding Australia’s Social
Enterprise Sector: Final Report’, Social Traders and the Australian Centre for Philanthropy and Nonprofit Studies June, 2010. Available from: http://www.socialtraders.com.au/about-social-enterprise/fases-and-other-research/social-enterprise-in-australia/

Barraket, J., Mason, C., and Blain, B. (2016a) ‘Finding Australia’s Social Enterprise
Sector 2016: Final Report’, Social Traders and the Centre for Social Impact Swinburne June, 2016. Available from: http://www.socialtraders.com.au/about-social-enterprise/fases-and-other-research/social-enterprise-in-australia/

Barraket, J., Mason, C., and Blain, B. (2016b) ‘Finding Australia’s Social Enterprise
Sector 2016: Analysis’, Social Traders and the Centre for Social Impact Swinburne June, 2016. Available from: http://www.socialtraders.com.au/about-social-enterprise/fases-and-other-research/social-enterprise-in-australia/

Clarke, C. (2017) ‘Millennial survey shows youth feeling aggrieved, frustrated by the way country is being run’, ABC News, 8 February 2017. Available from: http://www.abc.net.au/news/2017-02-08/millennials-worried-about-the-future/8250250

Davidson, H. (2017) ‘Third of Australian youth have no job or are underemployed, report finds’, The Guardian, March 2017. Available from: https://www.theguardian.com/business/2017/mar/27/third-of-australian-youth-have-no-job-or-are-underemployed-report-finds

Finding arts based social enterprises in Australia

QArt Studio

Many social enterprises (SEs) in Australia have been cataloged by Social Traders (est. 2008) who are a social enterprise development organisation. Social Traders describe themselves as:

Australia’s leading social enterprise development organisation, we work to break the cycle of disadvantage and build resilience in Australian communities.  We believe business can do good and that social enterprise generates benefit by creating employment, providing access to services and strengthening local communities.  Using our expert knowledge and partnerships we help organisations of all shapes and sizes find better ways to achieve and contribute to sustainable social impact and change.

Our vision is a world where the market is used to deliver sustainable social outcomes. We achieve this by empowering social enterprises to transform communities throughout Australia.

Social Traders have participated in large scale research projects with Professor Jo Barraket, including the Finding Australia’s Social Enterprise Sector (FASES) project (2010) – the first CENSUS of social enterprise in Australia. They recently released FASES 2016.

In 2009 Social Traders partnered with the Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) at Queensland University of Technology to define social enterprise and, for the first time in Australia, to identify and map the social enterprise sector: its scope, its variety of forms, its reasons for trading, its financial dimensions, and the individuals and communities social enterprises aim to benefit.

Led by Associate Professor Jo Barraket, Australia’s leading social enterprise academic, FASES produced its first report in June 2010. Since then the findings of this research have been downloaded over 15,000 times, and have played a critical role in supporting social enterprise development in Australia.

Social Traders’ online directory of almost 5,000 Australian SEs is called the ‘Social Enterprise Finder’. The aim of the SE finder is to connect buyers with SEs:

… The Finder enables consumers and procurement officers to easily locate and support businesses that benefit the community.

For social enterprise operators, The Finder is the gateway for entering the buyer markets that Social Traders is actively developing in the consumer, corporate and government sectors. It is also a free resource for raising awareness and increasing sales.

Upon registration, social enterprises are certified, which verifies that they exist for a social purpose, they earn the majority of their income through trade and they reinvest the majority of their profit in their social mission.

Certified social enterprises may be entered onto the Finder and subsequently invited to become part of Social Traders’ supplier network.

Using the Social Traders ‘Social Enterprise Finder’ we have compiled a list of arts based social enterprises that offer programs to young people in Melbourne, Sydney and Brisbane. The data base allows you to search each State by specific categories. We searched 5 different categories including: Arts and Culture; Clothing and Personal Services; Education and Training; Employment; Media and Communications; Printing and Publishing. SEs relevant to our project showed up mainly in the two first search categories: Arts and Culture; Clothing and Personal Services. The SEs we identified in these categories also showed up again in other category searches, particularly Education and Training, and Employment.

Throughout our search we found that:

• Across the three States the Media and Communications search category showed many radio stations offering volunteering opportunities, but this was not necessarily linked to education and training. There were community organisations in this category, but none had a youth/arts focus with an attached training or educational program. 
• We identified many social enterprise service organisations and businesses that aim to secure funding for SEs and assist with branding and advertising opportunities (see for instance, Futurekind). These are Social Enterprise intermediaries and don’t necessarily run training/education/work programs.

Victoria

• Victoria had the most Arts Based Social Enterprises, followed by Sydney then Queensland. This fits with FASES findings which shows a strong concentration of SEs in Victoria:

  

  ‘Social enterprise locations’ (Barraket et al, 2016: 14).

• The Arts and Culture category revealed the most ABSEs (8), while the Education and Training category showed 5 ABSEs.
• Within the Printing and Publishing category the only ABSE was a creativity and literacy organisation called 100 Story Building. The rest were either commercial or charitable organisations that do not run training and education programs but donate proceeds to different causes, or develop their product in sustainable conditions.

New South Wales:

• No ABSEs with training and education programs showed up in the Employment search category.
• The Media and Communications category showed mostly radio stations along with a couple of universities (i.e. University of Newcastle). Some radio stations considered themselves community organisations and offered opportunities for volunteers.
• Employment and training programs offered business skills training and skills thought to increase individuals ‘employability’, for instance processing mail and operating machinery.

Queensland

• A search of the Employment category showed no arts based youth programs, but lots of hospitality training programs and employment/workforce service providers, service programs for differently abled people, and community organisations.
• There were no ABSEs in the Media and Communications or Printing and Publishing categories.
• Once again, Printing and Publishing showed mostly commercial or charitable organisations that do not run programs but donate proceeds to different causes, or their product in manufactured sustainably.

Although many ABSEs were categorised under ‘Arts’ this does not necessarily mean that they involve participation in creative processes. A SE may be thought of as creative if it is selling art products which have been sourced from countries around the world.

Many social enterprises stated that their mission was to turn people’s lives around whether this was through the program they offered or the business they operated. Many SEs do not offer particular education and training programs but train people on the job, this is the case for stores that stock ethically produced products (i.e. Just Earth) or recycled clothing. Or, for instance, Fitted for Work (via the Conscious Closet Organisation) train women to work in their shop and sell clothes, while offering the service of preparing women for work with mentoring and work appropriate clothes (and more…).

Many SEs are hopeful that their business model will become the norm in the years to come, and that their participation in the SE sector will alter the way people think about the production and consumption of goods and services. This logic of being a ‘change maker’ is expressed differently by different SEs – some focus on making a change in people’s lives, others focus on the broader project of social change. (In coming posts we will discuss the logic of SEs with the ideas of program logic and theory of change).

As we’ve mentioned in earlier posts  SE strategy documents produced recently by Victoria and Scotland strongly support the idea of growing SEs and pushing business toward ‘doing good’ or being good global citizens. The Social Enterprise Finder shows many Social Enterprises using different models to achieve their social missions, from dance and art studios offering programs and opportunities to perform and sell art works, to community radio stations and shops selling hand made ethical and fairtrade products.

Since the creation of the Social Enterprise Finder Barraket et al (2016) have identified 20,000 SEs in Australia. The recent report ‘Finding Australia’s Social Enterprise Sector’ is  joint authored by Jo Barraket, Chris Mason and Blake Blain (Swinburne University) and Social Traders. The report identifies major constraints on the development of the SE field, including:

A number of issues related to public policy and regulation were cited as barriers to
social enterprises growing and/or fulfilling their potential. Local government was
viewed as having a particular role to play in market development for social enterprise, and state and federal governments in providing enabling regulation, supporting organisational development, and stimulating innovation in policy design (2016b: 13).

We will pick up on these issues in our next post when we discuss the FASES 2016 report and analysis documents.

References

Barraket, J., M. O. Collyer,  and Anderson, H. (2010) ‘Finding Australia’s Social
Enterprise Sector: Final Report’, Social Traders and the Australian Centre for Philanthropy and Nonprofit Studies June, 2010. Available from: http://www.socialtraders.com.au/about-social-enterprise/fases-and-other-research/social-enterprise-in-australia/

Barraket, J., Mason, C., and Blain, B. (2016) ‘Finding Australia’s Social Enterprise
Sector 2016: Final Report’, Social Traders and the Centre for Social Impact Swinburne June, 2016. Available from: http://www.socialtraders.com.au/about-social-enterprise/fases-and-other-research/social-enterprise-in-australia/

 

 

 

Scotland’s Social Enterprise Strategy and Moral Economies – Part 2

Good global citizens

… Many social enterprises are already good global citizens, collaborating internationally and supporting our international development efforts (SSES, 2016: 20).

What is a good global citizen? Well according to the SSES (2016) an organisation or a country or a social enterprise can each be a good global citizen. What is required?

Making distinctive contributions in addressing global challenges such as climate change, tackling inequality and promoting human rights, sharing knowledge and skills and technical expertise for global good (SSES, 2016: 19).

The Scottish Social Enterprise Strategy (SSES, 2016: 20) is not only designed to develop a local response to public service, community and global issues, it proposes a long-term commitment to being a better ‘global citizen’. The hope is that Scottish SEs will be designed and will operate in response to global issues, including: climate change, inequality, and human rights issues. This is documented in the International Framework and Internationalising Social Enterprise Strategy.

Global citizens – whether organisation, country or person – collaborate internationally and trade in overseas markets, boost inward investment and educational opportunities. These goals are ultimately working towards the United Nations Sustainable Development Goals (SSES, 2016: 20). If the social enterprise sector is visible on the world stage then this  will provide an opportunity to promote policy priorities like fighting climate change.

(Scottish Social Enterprise Strategy, 2016: 19).

The 10 year strategy is Scotland’s Vision for Social Enterprise developed in consultation with the SE community. The plan is that Social Enterprise will be:

• A growing movement

As it develops the sector will retain its strong community roots, independent orientation, and entrepreneurial character (SSES, 2016: 22).

• Become the norm

Become widely accepted as a more just, democratic and inclusive way of doing business… inspiring young people who will undertake the change toward the type of society we aspire to (SSES, 2016: 22).

• Become visible everywhere

Be found delivering goods and services in every economic sector… become seen as the epitome of ethical, transparent and responsible business behaviour (SSES, 2016: 22).

Much like the Victorian SES the Scottish Strategy is informed and framed by particular Priorities that are oriented towards market opportunities and outcomes and stimulating the social enterprise sector:

(Scottish Social Enterprise Strategy, 2016: 25).

This will be done through the points listed above, from 1a to 3c.

• Priority 1a. Local Development acknowledges that SE often start because ‘active citizens’ are addressing a local need. The plan is to provide greater support for such active citizens in social contexts there is a paucity of skills or knowledge in this area. So the strategy supports: community development; local strategies; support infrastructure; and equality groups.
• Strategic priority 1b highlights the usefulness and necessity of social entrepreneurs as ‘can-do’ people. Can-do people must be nurtured and to this end the strategy proposes seeding funds, the development of work spaces, and locating Intrapreneurs working in existing institutions like universities and large charities.

Social entrepreneurs – when they emerge – can feel isolated, unrecognised and unsupported. They also find unnecessary objects in their way when trying to get promising ideas off the ground. We must ensure that these can-do people get the encouragement and support they need’ (SSES, 2016; 29).

• 1c. At schools and universities students will be encouraged to become ‘can-do’ people by adopting an entrepreneurial attitude and imagining that they can affect change in the world through this type of thinking and action (See for instance, the Developing the Young Workforce strategy).
• One of the greatest ambitions of the SSES is to make social enterprise the norm, this means increasing recognition for SEs as defined in 1d:

We want more decision makers, influencers and supporters (in Scotland and internationally) to understand social enterprise, giving rise to further local action and more social enterprise activity (SSES, 2016: 31).

• 2a. The strategy regarding funding seeks to further monetise SEs and emphasises capital growth. Where there is investment, there is risk. ‘Responsive Finance’ will offer blended capital which means mixing loans and grants to distribute the financial risk between lender and entrepreneur. The result is that a greater burden will be placed on entrepreneurs to undertake extra training (or ‘Investment-Readiness’ training SSES, 2016:34) to be seen as a viable investment and allieviate the fears of investors.
• Priority 2b. recognises that business support should be tailored to different forms of business, from community enterprises to social enterprises, and address the needs of minority ethnic communities. This priority articulates a need for an ‘Advisor Network’ which would build links between social enterprise advisors or Intermediaries as they are known in Australia.
• 2c. focuses on Collaboration and how SEs can work together to benefit from shared resources, reduced costs, and access to new markets. This type of network building is to be facilitated by the development of networks, consortia and collaborative technologies.
• 2d. Leadership development involves training programs for ‘future leaders, empowered governance and international leadership’ (SSES, 2016: 37).
• 2e. Workforce development means supporting Work Integration Social Enterprises (WISEs) which:

Improve the employability and employment prospects of people furthest from the labour market

This includes finding creative ways to enable Social Firms to take on employees with higher support needs (including the use of targeted wage incentives) (SSES, 2016: 38).

WISE are similar to Transitional Labour Market Programs (TLMPs) which we discuss at length in this report on Action Learning and Social Enterprise in Australia.

• 2f. Is concerned with demonstrating the ‘Social Value’ of SEs and building their capability. This will mean measuring the impact of SEs or what they have been able to contribute to the market, the workplace, their supply chain, local economy and community and environment. This might also be a ‘balanced account’ of performance for those small SE organisations. Reporting requirements will be developed with funders, purchasers and regulators.
• 3a. Sets out goals to engage ‘Public markets’ so that more SEs are delivering a broader range of services through public sector engagement, collaborative commissioning and social procurement.
• 3b. Social enterprises will be more visible to consumers and tap into ethical consumption habits.

Public awareness and recognition of social enterprise remains low. Social enterprise products and services are not yet widely available or easily accessible to consumers… We will encourage and support the introduction of Buy Social as an internationally recognised third party certification programme to label social enterprise products and services (SSES, 2016: 43).

• 3c. The business market will be engaged with by tapping into what is viewed as a broader social enterprise community with the aim of increasing trade between SEs and businesses. The Sharing Economy and Corporate Supply Chains will provide models for sharing resources and circulating money within the social economy (SSES, 2016: 44).

 

Neo-Liberalism – it’s common sense!

The Social Enterprise policy and strategy documents – Victorian and Scottish – lay out a number of rules and regulations for people thinking of starting up a social enterprise and those already operating one. These documents emphasise ‘capital’, ‘the market’, ‘profitability’, ‘finance’, ‘consumption’ and ‘value’. The idea is that what SEs are and what they can become is influenced and shaped by the preferences laid out by the Victorian and Scottish Government. International growth and profit are key goals. The problem is that a focus on growth and economic profit will often contradict SE missions, interfere with SE programs and inhibit the articulation of alternatives to what can be understood as neo-Liberal capitalist business models. The reason why such alternatives are desirable and necessary is a discussion we will pick up on in later posts.

In other spaces we have discussed capitalism, neo-liberalism and the ways in which they shape our everyday lives, from the food we eat and how we eat it to the ways we share in relationships with other people (See Kelly and Pike, 2017: 10-14). Neo-Liberal capitalism:

…signals the emergence, development and deployment of a range of political rationalities and governmental technologies (Rose and Miller 1992) that seek to make the ‘real’ knowable and governable through the behaviours and dispositions of autonomous, rational, choice-making, risk aware, prudent and enterprising individuals (Kelly and Pike, 2017: 12).

Today, the global logics of neo-Liberal capitalism structure our interactions, our working lives, or lives of work. Neo-liberalism shapes and attempts to produce competitive, individualistic, entrepreneurial people. In much of our work we draw on the legacy of Michel Foucault to imagine neo-Liberalism as: ‘an art of government, a mentality of rule. Here neo-Liberalism is much more than economic theory, or political discourse, or public policy’ (Kelly and Pike, 2017: 13). Neo-Liberalism shapes fields of possibilities, that is, the social environment in which we shape our identity, come to know ourselves and others. In our everyday lives we encounter ‘bundles of beliefs’ that appear to be common-sense: ‘ideas beyond question, assumptions so deep that the very fact that they are assumptions is only rarely bought to light’ (Hall, 2013: 8-9). Neo-Liberalism is a bundle of beliefs that rely on the widespread acceptance of ‘the market’, ‘the competitive individual’ (#boss), and the primacy/priority of the ‘private over the public’ (Kelly and Pike, 2017: 14).

There is growing concern with the ways in which a market logic, or neo-Liberal commonsense, has negative consequences for our well-being, our future and our relationships. There is an increasing awareness that, as Hall et al (2013: 14-15) say:

Commercialisation permeates everywhere, trumps everything. Once the imperatives of a “market culture” become entrenched, anything goes. Such is the power of the hegemonic common sense.

For instance, after the US led Global Financial Crisis of 2008 we witnessed mass protests and uprisings around the world (i.e. Occupy, the Indignados and the Arab Spring), which sought to challenge neo-Liberal commonsense that everything can and should be commodified, that the market and profit should be prioritised over all other aspects of life.

… This is where Social Enterprises come in to the picture. In the Victorian and Scottish SE strategies SEs are presented as models of ethical and moral community, social and commercial practice.

Yet, there is some irony here in that having developed such a picture of SEs, the Strategic documents propose a market logic to develop and mould the social enterprise sector. Of course SEs are not immune to the commonsense logic of neo-Liberal capitalism. This is not to say that they are inherently good or bad, but that they are shaped in relation to the prevailing trends of the market, of commercialisation, entrepreneurialism, competitive individiualism.

Moral Economies and Social Enterprise

It is in this context of neo-Liberal capitalism that we introduced the idea of ‘moral economies’ in an earlier blog post. Moral economies refer to the social, political and spatial dimensions of the choices we make, and the ways these spaces frame what it is that we should choose to do.

“Moral economy” is a concept, originally introduced by E P Thompson (1971) in a discussion of food riots in the “premodern” English economy of the eighteenth century, that, in a much wider sense than first imagined by Thompson, suggests a

kind of inquiry focusing on how economic activities of all kinds are influenced by moral dispositions, values and norms, and how in turn these are reinforced, shaped, compromised or overridden by economic pressures (Kelly and Pike, 2017: 18).

Broadly speaking, moral economies underpin the rules and boundaries we live by in our communities and societies.

The theory of moral economy assumes that economic activities are defined and legitimized by moral beliefs, values, and norms… In particular, agrarian communities are said to share a set of normative attitudes concerning the social relations that surround their local economies. Social networks and culturally legitimized dealings tend to prevail over market-efficient behavior, as they promote the survival of the community under the conditions of scarcity (Cieslik, 2016: 12).

Moral economies establish commonly agreed upon moral and ethical norms governing appropriate/preferred behaviour in relation to others – but this does not mean they are inherently just, equitable or fair. Moral economies are made up to assist the smooth functioning of people in groups, in society.

Just what counts as moral, as opposed to immoral, behaviour is contestable; some forms of moral economy, for example, that of the patriarchal household, might be deemed immoral, or as a domain disguised as benevolence and fairness (Sayer, 2004: 2).

Moral economies – and immoral economies – are intricately tied to the ‘ways in wich markets and associated economic phenomena both depend on and influence moral ethical sentiments, norms and behaviours and have ethical implications’ (Sayer, 2004: 2). In this sense, the concept allows us to examine:

• moral aspects of economic practices – the role of social enterprise ‘missions’;
• economic influences on morality – why these missions exist and to which fields can they be mapped and traced?;
• how economic organisation affects human well-being – how is young people’s well-being affected by their participation in social enterprise programs?.

Social enterprises have overt moral codes and undertake social missions which is one of the things that makes them different to other organisations. It is the moral dimensions of social enterprises. and how thses are constructed and communicated that interests us as we attempt to understand how young people participating in SE programs are encouraged to shape a sense of self and carve out a path into the future.

As we said in part one of our discussion of the SSES:

People might be able to imagine themselves as responsible for local community issues which SEs address, but these issues are often tied to broader, even global issues which exist outside the reach of many individuals as they go about their daily lives.

The Strategic documents encourage people to think of themselves as problem solvers, as the active citizens who should take up community and social issues as part of their personal and professional life journey and career (entrepreneurs, Guerrilla selves!). But, they should do it in a way that is financially profitable, that encourages other people to consume products and services (whether they are needed or not). The Strategic documents provide a detailed map of how existing SEs and attached moral economies should take economic factors into consideration, particularly:

• financial growth;
• global networking and collaboration;
• consumer habits;
• market and financial viability.

The Strategy or plan is to further sculpt social enterprises in the image of profitable business that engage with and sustain the neo-Liberal capitialist economic market. In this sense particular attitudes and dispositions are encouraged and praised, for example:

• Good global citizens;
• ‘Can-do’ people;
• Intrapreneurs;
• Social entrepreneurs.

Again, we would stress that what our research is interested is in exploring the challenges and opportunities, the limits and possibilities, the intended and unintended consequences of attempts to make individuals, communities, social enterprises morally responsible for being ‘active’, ‘globally oriented’ entrepreneurs/enterprises in relation to problems and challenges that themselves emerge as a consequence of the global, competive logics of a neo-Liberal capitalism that seeks to privatise, commodify and monetise all aspects of our lives and the world in which we conduct our lives.

References

Cieslik, K. (2016) ‘Moral Economy Meets Social Enterprise Community-Based Green Energy Project in Rural Burundi’, World Development, Volume 83, July 2016, Pages 12–26. Available from: https://doi.org/10.1016/j.worlddev.2016.03.009

Hall, S. D, Massey , and M. Rustin, eds. (2014) After neoliberalism? The Kilburn Manifesto, Soundings. London: Lawrence & Wishart.

Kelly, P. and Pike, J. (2017) ‘Is Neo-Liberal Capitalism Eating Itself or Its Young? in Kelly, P. and Pike, J. eds. Neo-Liberalism and Austerity: The Moral Economies of Young People’s Health and Well-being, London: Palgrave Macmillan.

Sayer, A. (2004) Moral Economy. [Accessed 20 January, 2016]. Available from http://www.comp.lancs.ac.uk/sociology/papers/sayer-moral-economy.pdf.

Scotland’s Social Enterprise Strategy – Part 1

The social enterprise sector in Scotland delivers £1.68 billion to their economy each year, employs 100,000 people and there are plans to increase this number even further. The ‘Scottish Social Enterprise Strategy’ (what we will refer to as ‘SSES, 2016’) provides a long term 10 year plan to develop the sector via 3 year ‘Action Plans’.

The strategy begins by positioning SE as intrinsic to Scottish culture and the economy.

Social enterprise is also an important part of our national identity and international reputation (SSES, 2016: 16).

They say for instance, that more than 5000 SEs are currently operating in the country, three in five of these generate an annual turnover of less than £100,000, and two thirds of all SEs in Scotland sell directly to the public (SSES, 2016: 9).

The strategy is framed by the idea of an uncertain and ambiguous economic future in which, it is thought, SEs can provide sustainable, entrepreneurial solutions. Also on the social enterprise agenda is: fair work, place and regional cohesion, tackling inequality and human rights  as defined in the Fairer Scotland Action Plan (SSES, 2016: 15).

The world is increasingly volatile, complex and ambiguous. In response, the delivery of this long-term strategy must remain agile (SSES, 2016: 10).

Through this logic SEs are seen as agile, flexible and able to adapt to volatile markets which render traditional business models clunky and old fashioned. SEs are packaged as new, caring businesses that are able to address public needs and concerns. You can see below where social enterprise is positioned within Scotlands Economic Strategy as a mode of ‘inclusive growth’, alongside goals like ‘investment’, ‘innovation’ and ‘internationalism’.

The strategy is forward looking in that it identifies a range of political, social, economic and technological future trends which it is thought will influence social enterprise operations and opportunities:

The influences and trends presented have been identified as both relevant and plausible. They have informed our thinking on how best to help the sector adapt to the dynamic and challenging period ahead (SSES, 2016: 10).

Let’s look at these future trends and what they mean for social enterprises …

Technological trends: The SSES claims that as technology enables public scrutiny of SE activities, SEs will be encouraged to collect robust data, show good governance and social impact (pictured left). And as socially responsible products and practices increasingly become more familiar to the public, more hybrid businesses are likely to emerge in the sector. Here, SEs are presented as the ‘business of the people’ – trustworthy, grassroots, accountable, hi-tech, responsible and capable of social and economic impact (SSES, 2016: 12).

These ‘trends’ identified by the strategy can be thought of as framing mechanisms or ways of attributing particular meaning to SEs. SEs are identified as vehicles that can be mobilised to addresss a range of economic and social problems, from local community concerns to uncertain economic markets.

People might be able to imagine themselves as responsible for local community issues which SEs address, but these issues are often tied to broader, even global issues which exist outside the reach of many individuals as they go about their daily lives. This is an idea which we will pick up on in our discussions about ‘moral economies’ and social enterprises in later posts.

Political changes: First, ‘Enabling legislation’ is identified as something that will open up financial and funding possibilities for SEs, particularly in the areas of early learning and childcare, health and social care, land ownership, broadband and transport. SEs are encourged to capitalise on the opportunities that arise in these spaces.

Second, it is predicted that increasingly localised public services will need a personalised response. And this is where it is claimed that SEs can step in to offer these kinds of unique, customised services.

Finally, it is thought that change will come about from high levels of democratic participation:

High levels of democratic participation is likely over time to lead to power being devolved downwards. Locality planning, participatory budgeting, and community empowerment are symbolic of the shifts underway. Further work will be required to ensure services are locally organised, people powered, and enterprising (SSES, 2016: 11).

 

 

 

While Social trends (pictured below left) include: demographic change, persistent inequalities, the influence of young people, and ethical consumption. The responsibility of caring for an aging population and providing innovative solutuons for aging populations is attributed to SEs, as well as the responsibility of fighting entrenched social inequality.

Nothing less than social transformation is the expected impact of social entrepreneurialism and enterprise. The spirit of entrepreneurialism is tied to the ‘younger generation’ who are relied upon for ‘progressive values’ and ‘new expectations anout society, business and life’ (SSES, 2016: 11). And this point is expanded on in relation to schooling a little later in the strategy, where there are plans to develop an education system with entrepreneurship at the core to capitalise on the potential of Scotlands young workforce (SSES, 2016: 16).

Finally, it is thought that our own motivation as consumers to buy ethically produced and responsible products and services, is cited as a driver for social change. Social Enterprises are encouraged to leverage these political and social trends to grow the sector, unite communities and fight against socio-economic injustice (our team member Kim Humphrey is an expert in the dynamics of ‘ethical consumption’).

A desire to live better, more sustainable lives means consumers will increasingly make ethical choices. This may fuel growth of the sector, but only if social enterprises are more visible and able to supply consumer requirements (SSES, 2016: 11).

The Economic trends identified by the SSES provide the final piece of the puzzle (SSES, 2016: 12). Here, entrepreneurialism is something that can balance and revitalise the economy by creating a more diverse business base. And, in the economic trends section we see a reflection of the social trends mentioned above. The idea of ‘business with a purpose’, social impact and ‘collaboration’/partnership taps into social trends of moral or ethical consumption (see Kim Humphrey’s Excess: Anti-Consumerism in the West).

We will pick up on this discussion of business with a purpose in our next post on social enterprises as the ‘good global citizen’, intrapreneurship and mobilising the consumer for market opportunity. In that post we reflect on what these ideas mean if we examine them through the lens of the ‘moral economies of social enterprise’.

 

Victorian State Policy and Social Enterprise 2017 – Part 1

This post is part one of a two part post about the recently released Victorian Social Enterprise Strategy, 2017.

Social enterprise is perceived as an innovative response to funding challenges that non-profit organisations increasingly face as they attempt to solicit private donations, and government and foundation grants. The concept is used to emphasise the innovative dimensions of projects and the risks that they are taking. A wide variety of organisations are engaged in social enterprise activities: ‘from for-profit businesses engaged in socially beneficial activities (corporate philanthropy) to non-profit organisations engaged in mission-supporting commercial activity’ (Defourny and Nyssens, 2006: 4).

Social enterprises ‘main purpose is not the maximisaton of profit but the attainment of certain economic and social goals’  (Muñoz and Tinsley, 2008: 44).

Introduction

In Australia in recent years, social enterprises have been positioned in many goverrnement, community and business discussions as significant sites for youth engagement, training, and social inclusion. In 2017 the Labour State Government of Victoria released their Social Enterprise Strategy. The policy, in part, states that rates of employment and community engagement among marginalised groups of young people in Australia will be a key indicator used to evaluate social enterprise benefit/outcomes.

The Victorian Government Social Enterprise Strategy (SES) is framed by a concern for the employment opportunities provided to young people entering the workforce. The Minister for Industry and Employment Wade Noonan notes that ‘jobseekers’ are ‘at risk of being left behind’ with young people facing declining opportunities for meaningful participation in the workforce. Noonan suggests that the that the Victorian social enterprise sector has a substantial role to play as government alone can not solve: 

Our most pressing social challenges – including unemployment, homelessness and disadvantage …

Many of our brightest and most innovative people are working tirelessly every day to find new ways to solve these problems. Through the extraordinary efforts of Victoria’s thriving social enterprise sector, we are drawing maximum dividend from our economy and applying business skills to a social mission (SES, 2017: 1).

The new Strategy understands social enterprise aims and goals as mostly financial:

While social entrepreneurs often require financial support or assistance to get their business off the ground, the goal of social enterprises is to become commercially self-sustaining. Sustainable operations are vital to the social enterprise model and international experience demonstrates the ongoing dividend, which is gained from well-targeted policy to assist sustainability (SES, 2017: 2).

 

Social procurement

The State Government supports social enterprise activity by: supporting social enterprise intermediaries, through social procurement initiatives, and through investment in social enterprises.

• Social enterprise intermediaries

The Victorian Government states that social enterprise intermediaries provide support and guidance to social enterprises in identifying and adopting:

workable business models and legal structures, accessing appropriately experienced mentors, and successfully demonstrating economic and social impact (SES, 2017: 7). 

The majority of Australian social enterprise intermediaries are located in Victoria, and include: Social Ventures Australia (SVA) (which supports SecondBite, Ganbina and STREAT); the Difference Incubator; the Social Enterprise Academy (SEA); and the Australian Centre for Rural Entrepreneurship (ACRE).

Social Traders: Established in 2008, jointly funded by the Dara Foundation and the Victorian State Government, Social Traders has established itself as the leading organisation supporting social enterprise in Australia, providing a diverse range of services to develop and grow the sector.

LaunchVic: A Victorian Government initiative, LaunchVic supports Victoria’s globally recognised, thriving start-up culture, and supports entrepreneurs to develop and grow businesses, including social enterprises.

Problems arise as social intermediaries are now the recipients of more funding than social enterprises themselves and are over-represented in the sector. Most intermediaries don’t provide pro bono support here – but charge social enterprises for this kind of consultancy. As a result they receive funding at both ends, from government and from social enterprises.

• Social procurement

The Victorian Government social procurement initiative aims to leverage the purchasing power of the state government. It claims that the initiative

adds value by intentionally generating a social outcome when goods or services are purchased, and ensures that wider government goals can be aligned with procurement’ (SES, 2017: 7). 

The social procurement approach has been used by the Victorian Government’s Level Crossing Removal Authority to create New Employment and Exchange Training Centre (NEXT). The Strategy cklaims that NEXT operates as:

a hub for a range of social procurement services, including career and transition advice services. The project is estimated to create 2000 new jobs, with at least 200 being apprentices or graduate engineers. The NEXT centre will provide opportunities to re-skill people from transitioning industries, such as automotive workers, and students from diverse and disadvantaged backgrounds, including indigenous Victorians and migrants (SES, 2017: 7).

Major Victorian government infrastructure delivery agencies, such as the Level Crossing Removal Authority and the Western Distributor Project require a Social Procurement Plan from project delivery partners.

• Social Impact Investment for Sustainability

Launched in 2016, this Sustainability Victoria initiative provides a combination of grants and low interest loans to investment-ready social enterprises working in the environment space. Investments are designed to create new jobs and training opportunities, respond to climate change, avoid and recover waste and improve resource efficiency in Victorian communities (SES, 2017: 6).

Increasingly government funding is shifting toward this kind of investment, or debt finance, rather than actual funding, which can put further financial stress on nonprofits.  This type of investment is paired here with a Sustainability focus which may exclude a range of social enterprises from applying for funding.

 

The limitations of the Social Enterprise Strategy

In terms of the track record that we bring to this project (see for example, Working in Jamie’s Kitchen: Salvation, Passion and Young Workers), and the significant research undertaken on/with social enterprises (see for example, Art as Enterprise: Social and Economic Engagement in Contemporary Art), we want to suggest that the framing of social enterprise in this Strategy should raise a number of concerns. In the first instance, the Strategy takes a profit-focused approach to social enterprise and does not fully account for hybrid models of social enterprise. This approach runs counter to the reality of the social enterprise sector worldwide, as only 30% of all social enterprises run at a profit. This has the effect of diminishing the value of non-profit yielding social enterprises and increasing the pressure on all social enterprises to turn a profit. The downstream effects of this pressure will be felt by the very participants social enterprises aim to support. Ironically, the strategy begins with a concern for the employment prospects of young people, but in reality may undermine the chances of young people, the quality of social enterprise programs and the functionality of the social enterprise sector. There are further negative implications for those social enterprises working with greater levels of marginalisation and disadvantage who bring together funding as well as self-generated revenues.

Finally, and perhaps most worryingly, the strategy places significant emphasis on supporting intermediaries and business development training (often run through intermediaries) with almost no government funding for social enterprises themselves. The small amount of funding being provided seems to be geared toward debt finance or ‘investment’ rather than actual funding. This continues a pattern of policy-making and funding decisions in the sector that has led to an explosion of intermediaries while social enterprises themselves struggle.

We will take up these and other issues in subsequent posts.

 

Image by Alex Proimos from Sydney, Australia – Recession Hits, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=25652544