The Rise of the Social Enterprise

Social enterprises put people first, focusing firmly on making a positive impact on their communities and beyond

Not every business is motivated by huge profits and “shareholder value”. A growing number of UK companies are social enterprises, which are more concerned with improving the lives of people in their communities or further afield.

According to a government report, around 9% of UK small businesses are classed as social enterprises, with an estimated two million people employed in the sector.

Unsurprisingly, London is leading the charge, with Hackney officially designated a Social Enterprise Borough since 2017.

These are all steps towards social change, improved communities and higher levels of inclusion. Social enterprises, by their nature, tend to be innovative and more representative of society at large, setting a positive example to other businesses and celebrating diversity in the workplace as a whole.

“Social enterprise is business 2.0”

Social Enterprise UK Credit Flickr

“A social enterprise is a business that has a primary purpose to meet social need rather than shareholder need,” explains Social Enterprise UK’s chief executive, Peter Holbrook. “This commitment helps to determine strategy and culture.

“Social enterprises are as diverse as anything else, they can operate a 1,000 different ways, but what unifies them is their commitment to balance their profit needs with their commitment to do right by their people (staff, customers, communities) and the planet on which we all depend.”

The network runs the annual UK Social Enterprise Awards, with applications now open for 2019. Last year’s winners include Cafedirect, which pours half its profits into Producers Direct, a UK charity that works with farmers to improve wellbeing and sustainability.

Social enterprise of the year Credit Flickr

A readers’ choice award went to Madlug, founded by youth worker Dave Linton after he discovered most children in care transported their goods in bin bags. For every bag a customer buys, another is donated to a child in care.

These entrepreneurs are changing the face of business as a whole – and even changing the world, one innovation at a time.

“We can all see there are urgent and multiple challenges facing humanity and the planet that we are failing to address,” Holbrook told Cityscapes. “We can’t just keep doing the same old things in the same old way and assume climate chaos, wealth inequality, social division and the loss of biodiversity will resolve themselves. Social enterprise is business 2.0.”

Hackney leads by example

Hackney sign Credit iStock-chrisdorney

London has around 20,000 social enterprises born and thriving in the capital, says Holbrook.

“They contribute not only to shared prosperity and create high-quality meaningful jobs, but they also run important bus services, museums, leisure centres, community hospitals, children’s daycare facilities, green spaces, recycling services – in fact you can find them just about everywhere,” he adds. “The difference is when you buy from a social enterprise, society profits.”

Hackney has proved a particularly successful incubator for these types of businesses. The London borough’s Pioneering Social Enterprise programme provides advice and support to start-ups with a social bent.

“We provide affordable workspace in Hackney to a variety of locally-based businesses,” says Hackney social enterprise development manager, Douglas Racionzer. “Our tenants are part of an exponentially growing ecosystem of organisations seeking to promote a world which is not based on the private ownership of property but on empathy, human flourishing and the common good.”

London buildings Credit iStock-track5

He points to Gillett Square cultural centre – “where music, art and many types of citizens meet and enjoy the space as a common” – and Bootstrap Charity, which provides workspace and support for social enterprises, as driving forces behind Hackney’s success.

“We have some 70 tenants and over 300 social enterprises operating across Hackney to whom we offer bespoke advisory services, training and networking opportunities,” he tells Cityscapes.

“This supportive, thriving ecosystem, coupled with the support from large local companies, the local authority, Greater London Authority and collaborating enterprise development agencies, makes this a great place to start and grow a business.”

Networks and the sharing economy make resources go far

Business table Credit iStock-PeopleImages

Holbrook believes that, while social enterprises should be as savvy as any small businesses, the emphasis should always be on creating positive change.

“We like to see great commercial capabilities, strong revenue and profit growth, but ultimately it’s about the social and environmental benefit that these businesses create and the impact on society that they have directly or indirectly,” he says.

Support networks such as Hackney Co-operative Developments and Social Enterprise UK, alongside awards and festivals that celebrate the impact of social enterprises, help these businesses to make a difference.

Social enterprises tend to operate on relatively low budgets. Utilising the sharing economy, from hiring meeting spaces to joining a car club, can help keep costs down – cutting the need for large outlay investments and allowing them to focus on what’s really important.

Frances McMonagle
Originally from “Up North“, since moving to London a few years back Fran has made it her mission to make the most out of living in the city. She can usually be found with a green tea, coffee or cocktail in hand busy taking far too many photos.

Date published: 28 June 2019

Other Articles

Katie Spillane

Market stalls 101: Selling tips from the experts

Obviously, being able to sell is essential for any small business: it makes the difference between success and failure. So we thought we’d ask expert market stall traders how to do it properly.

Read more
Frances McMonagle

A guide to London's ethical entrepreneurs

Start-ups with social impact are capturing the imagination of consumers across the world, and the more people buy, the more they help others – a win-win for all.

Read more
Frances McMonagle

Patch plants: how to grow a British start up with investment

Co-founder of successful London-based start-up, Patch, Freddie Blackett, explains how investors helped him access the skills he needed to grow his business.

Read more