Where next for social enterprise in the 'Big Society'?

There’s increasing interest from politicians and investors for social enterprises to enter ‘non-traditional’ market places (apparently there’s a belief that social enterprises don’t usually foray out of construction, catering or childcare into markets like telecoms, IT, financial services, etc etc...), especially into industries where private businesses have failed.

So – leaving aside the argument that if other businesses fail in these markets, where is the logic in us entering them?, this may seem fair enough, but ask any actual trading business about their entering new marketplaces and they’ve very hesitant. This is because this strategy for business growth is proven to be the most risky, and most likely to fail.

Therefore we need an incentive – if the state wants us to take such high risks, then they should recognise the cost to us for delivering their agenda (assuming that we decide it’s actually a good idea to enter new marketplaces). This doesn’t and shouldn’t be through grants, but maybe through tax and investment reliefs, interest free loans, and so on – possibly the need that the big society bank that’s being created could meet?

But if we do diversify and enter these ‘non-traditional’ market places, ultimately it should be because we see that there’s business sense in doing so – otherwise we change into charities or subsidiaries of the state and loose our distinctiveness.

Could social enterprise benefit from using a co-operative identity?

Co-operative enterprises are extremely varied in their basis for membership, forms and structures, but all share a common global basis of shared values and principles to unite them.

To help reduce confusion about what type of co-operative they are, they group and identify themselves into a number of types, with each being based on their primary focus (type of member) – worker, housing, community, credit, consumer, ...

Maybe that’s a trick which the wider social enterprise movement might look to adopt in helping to reduce the ongoing confusion about what it is. Perhaps the basis for such ‘sub-grouping’ would be on their primary market or beneficiary, so we’d see ‘employment social enterprises’, ‘training social enterprises’, ‘health care social enterprises’, maybe even ‘co-operative social enterprises’?

Marked for success or more confusion?

The principle aim of the Community Interest Company (CIC) was as an easy identifier for social enterprises, but this seems not to have happened in the way people hoped – perhaps because as a legal form CICs offer no features that are inherently unique (i.e. protected asset locks and principle purposes can be entrenched in other legal forms).

But we now have the shiny new Social Enterprise Mark, which will hopefully have a better chance of being the easy identifier as it’s based on recognising defining characteristics of social enterprise in whatever legal form or structured they are enshrined.

BUT... will this Mark spark a new market for ‘marks’? The Soil Association and FairTrade Foundation were both pioneers in certifying organic and fairly traded goods, but other organisations offering organic and fair trade certifications have since emerged...

So perhaps we should be more open to the other ‘marks’ that are available to social enterprises to seek (the Social Firms Star for instance), and welcome others’ attempts to introduce other standards (there’s moves for a worker co-op mark, and Scotland did look at having its own mark as well) and explore how they might best complement each other.

Ultimately though, the Social Enterprise Mark shouldn’t be a holy grail, but one of a number of tools that we should approach and consider its appropriateness to us in the context of our enterprises’ own needs and marketplaces. Some will take the mark and use it to great commercial advantage I’m sure, while for others it simply won’t be relevant...