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Introductory scene setter for the EFMD Conference on Social Enterprise

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  1. 1. Social Entrepreneurship By Accident or By Design?
  2. 2. Social Enterprise Set up & trade to specifically tackle a social or environmental need Entrepreneurial autonomous spirit and social aim “Change the world for the better” “Doing business and doing good” - Not solely maximisation of shareholder value
  3. 3. Profit/Social spectrum! Motives Business Social Business Social Enterprise Charity Profit generation or distribution? Maximisation for shareholders Max. With Larger CSR/charitable aspect More-than-profit (NOT not-for-profit) > 50% reinvested Not-for Profit - long-term Social Some CSR Considerable CSR Key purpose/passion Key purpose Environmental Sustainability initiatives Considerable focus Key purpose/passion Key purpose Ethos Private sector efficiency Bias towards private sector Bias toward long term purpose – revenue via trading Public sector service – £ via donations or government Solutions to societal problems Unlikely unless incentivised/led Supportive /selectively Address by being excellent or there Fulfils some but not all gaps Ethics Bottom-line focus Sizeable consideration Benefit people & planet embedded at outset - balanced approach Ethically and morally driven
  4. 4. Social Enterprises
  5. 5. Social Entrepreneurs • Definition – OECD gave 29 different references – National, regional and cultural differences • SE’s see the world in a different way - action rather than reflection • Need to make a difference in a sustainable way – Triple bottom line – people, profit and planet - flexible • Want to transform lives, take control/ influence & lead the way – Assume significant accountability for risks and outcomes - resilient • Strong social conscience – care deeply and can challenge & network • Passion to change something on which they feel strongly - intention – Relentless energy and doggedness – emotional connection to cause – Campaign for a wider public or social good not their own rights • Often witnessed/experienced an indignity & decided to take action – Desire to right a social injustice – Or make the world a better place – Want to change others lives more than their own - humble • With enterprise skills then can see world-changing results • Value creation not appropriation
  6. 6. Social Enterprise v Entrepreneur “Not all social enterprises are started by social entrepreneurs and not all social entrepreneurs start social enterprises” ... .. Charlotte Young, School for Social Entrepreneurs Definition of a entrepreneur via SSE “someone who works in an entrepreneurial manner, but for public or social benefit, rather than simply to make money. Social entrepreneurs may work in ethical businesses, governmental or public bodies, quangos or the voluntary and community sector.” “Entrepreneurship that aims to provide innovative solutions to unresolved problems”...OECD 2010 “SE’s are in pursuit of sustainable solutions to problems of neglected positive externalities” (Santos 2009)
  7. 7. Social entrepreneur definition • Definition of “social entrepreneur”........ Wikipedia “someone who recognises a social problem and uses entrepreneurial principles to organise, create and manage a venture to make a social change.” • Growing arguments over definitions and boundaries – – – – – – different definitions in Europe and with USA/Far East Sense it is growing but difficult to measure Concentrate on boundaries, analysing the landscape Over-concentration v over-dilution (exclusive/inclusive) Typology (Neck et al 2009) Identify primary and secondary characteristics of social entrepreneurs (Broard and Larivet 2009)
  8. 8. Social Entrepreneurs? Quakers in 1640’s Fenwick Weavers Society -Coop Salt’s Mill & Saltaire Cadbury’s/Rowntrees Gurneys of Barclays Bank
  9. 9. REFLECTION AT LEEDS MET • Philanthropy – learn, earn, share • New Philanthropists - channel energies /talents toward social and environmental ends • Economic selfsufficiency/sustainability
  10. 10. Definitional tensions • SE as individual phenomenon • SE shaped by social value • Specific sector only • Radical social transformations only • Global phenomenon • Collective • Economic value creation – serves social • Cross-sectors public, NFP and private • Incremental social impacts • Local
  11. 11. All kinds of people, all kinds of activity Activities • Clothes recycling • Redesign workshops • Anti-gun crime merchandise • Street dance classes on challenging housing estates • Tap water bottle fill network Who/People? • Public sector workers forming new enterprises • Retirees • School and community groups • People from Private business
  12. 12. Bill Drayton-Leading Social Entrepreneurs Changing the World • Restless.......“Social entrepreneurs are not content to just give a fish or teach how to fish. They will not rest until they have revolutionised the fishing industry.” • “The first and most obvious test of a true social entrepreneur is, are they possessed, really possessed by an idea...making it happen across society • Revolutionary....Entrepreneurial quality – is by far the toughest (criterion for a social entrepreneur). For every 1,000 people who are creative and altruistic and energetic, there’s probably only one who fits this criterion, or maybe even less than that. By this criterion ...we do not mean someone who can get things done. The are millions of people who can get things done. There are very, very few people who will change the pattern in the whole field.”
  13. 13. Social Entrepreneurs • • • • • • • • Robert Own – founder of Co-op movement Vinoba Bhave – founder India’s Land Gift Movement Ric Edelman/Nigel Hughes – Green Light Trust Dave Hatherly – Wayland Radio Gary Hirshberg – Stonyfield Farms Jeffrey Hollander – Seventh Generation Michael Young – SSE & > 60 others Lord Andrew Mawson OBE – Bromley by Bow Centre, London • Mohammad Yunus – Grameen Bank • Iain McArthur – Training for Life
  14. 14. Forces on Social Enterprise • • • • • • • • • • • Way people see the world Free market capitalism being questioned Politicians budgets limited /insufficient – systemic retreat of govt from public provision, giving primacy to market driven models of welfare Climate change Water Pollution/Sanitation Rural to urban shift - Far East middle classes Inequality poverty and ageism Extinction Regulation Innovation/improvement seen • • • • • • • • • • • • Indifference Networks Not enough creative ways to generate income Scale of change is daunting Inconvenient truth National/political interests Corporate tactics Authorities holding back Lack of confidence /ability Inappropriate systems and processes to support Fiscal and regulatory mechanisms Skill and will-sets
  15. 15. Study on Practices and Policies in the SE Sector in Europe – July 2007 Definition • Fulfils social goals • Addresses a target population in need • Various legal forms but autonomy • Deals with voluntary social work • Reinvests profits or ltd distribution • May receive public funding • Continuous activity producing and selling • Significant economic risk • Paid workers not just volunteers • Decision-making not based on capital ownership • Participatory nature of activity – (re)/integrate disadvantaged • Almost impossible to obtain concise meaningful statistical information • • • • • Legal regulations Financial Support Business Support Measures fostering co-operation EQUAL – funding for promotion of public and social enterprise collaboration • Austrian Institute for SME Research • Recommendations and lessons learned • More stable and predictable funding instruments Create EU defn and promote Provide tailored business support Encourage horizontal and vertical collaboration Trans=national monitoring and assistance • • • •
  16. 16. OECD 2010 preliminary recommendations • Build enabling environments and implement supporting policies – Enabling legal, fiscal and regulatory • Provide sustainable finance – fiscal incentives for investors & credit enhancement • Support further research on sector needs • Provide training opportunities to social entrepreneurs ands include in curricula - culture of inclusive entrepreneurship/role models • Support market development and public procurement • Evaluate impact – tools and social ROI
  17. 17. Social Enterprises EU Contribution 2020 Laszl Andor, EU Commissioner – Oct ‘12 • Inherently linked to social-market economy • October 2011 – European Economic and Social Committee supported • 2 million SE’s in Europe accounting for 10% of all EU businesses and over 11 M paid employees @6% of EU working population • Recently this sector created @10% of new roles in EU • Role in social inclusion • “Social Business Initiative” action plan at EU level i. Facilitate Access to finance ii. Raise visibility iii. Improve legal framework • Measure socio-economic benefits • City collaboration on inclusive policies in labour market • • • • • • • • • Emphasised strongly the employment creating potential Crucial at this time Creation of sustainable and high quality roles SE’s are pioneers in developing new markets and creating jobs Potential European Social Entrepreneurship Fund – work with ESF and ERDF Proposed a fully-fledged new ESF investment priority for SE’s Establish an EU level 90 million euro fund to support hybrid funding Mapping social enterprises SE’s largely and untapped source of inclusive growth and sustainable jobs
  18. 18. Social Enterprises in the UK - scale Social Entrepreneurship Monitor is a special report to the Global Entrepreneurship Monitor found :1.2M people or 3.2% of the working-age population classed as socialentrepreneurs cf. 6.2% in commercial entrepreneurship Social entrepreneurs are more likely to be women, young and well educated (Harding 2006). Diverse group and in economically challenged/deprived areas UK seen as having a developed SE sector relative to some EU colleagues • • • • Third Sector Report in 2009 More than 61,800 in the UK Combined turnover of £27 bn @5% businesses with employees • Contribute £8.4 bn pa • Numbers are rising • Govt appointed socialenterprise ambassadors
  19. 19. Structure of Social Enterprise in UK Social Enterprise Kitemark – trialled by RISE Purpose and Beneficiaries of Standards? -Fair Trade Foundation set up in 1992 Investors Big Issue Invest Social Investment Business Social Equity Fund Social Impact Bonds Big Society Capital – a social investment bank Research and surveys 56% saw turnover increase (2007/8) against only 28% of businesses in general 48% were expecting to grow compared with just 24% of small business in general Scaleability ? • Social Enterprise Coalition (SEC) now Social Ent. UK • UnLtd – a charity with a remit to support and develop the role of social entrepreneurs • Major global accounting firms eg. PwC and SSE and Deloitte Social Innovation Pioneers Programme • SSE • Expertise in investment readiness and relevance
  20. 20. Social Enterprise Network Orgns in World Conferences held eg. World Skoll Forum, SSE Open sourcing social solutions and online communities eg. Social Edge Procurement sites Changemakers Funding mechansims -Crowdsourcing eg. Zidisha -Venture funds -Internet and social networking sites • • • • • • • • • • • • Ashoka: Innovators for the Public The Skoll Foundation Omidyar Network Schwab Foundation for Social Entrepreneurship Athgo Root Cause Canadian Social Entrepreneurship Foundation NESsT International New Profit Inc National Social Entrepreneurship Forum Echoing Green Social Enterprise UK
  21. 21. Part of a bigger healthy thing • Development toward – Improving communities – Improving life chances – a more connected society driven by • • • • Climate change - Environment Internet Excesses of failed models Growing societal problems • Education’s response: • Today a growing number of colleges and universities are establishing programmes focused on training and education SE’s
  22. 22. Ben Cohen Values-Driven Business: How to Change the World, Make Money and Have Fun “Without question, the balance of power on the planet today lies in the hands of business. Corporations rival governments in wealth, influence and power. Indeed, business all too often pulls the strings of government. Competing institutions, religion, the press, even the military play sub-ordinate roles in much of the world today. If a values-driven approach to business can begin to redirect this vast power toward more constructive ends than the simple accumulation of wealth, the human race and Planet Earth will have a fighting chance.”
  23. 23. The Reality of Rights – May 2009 • Corporate Responsibility Coalition commissioned the London School of Economics “the activities of transnational enterprises can promote economic development and generate wealth and prosperity, thereby enhancing the realisation of a broad range of economic and social rights. On the other hand, there is no doubt that they can and do perpetrate human rights abuses affecting both workers and communities in many of the host countries in which they operate around the world.”
  24. 24. Sir Richard Branson • Predicted a ........ “sea change from the way business was always done, when financial profit alone was the driving force”
  25. 25. Tony Manwaring...CEO, Tomorrow’s Co. • Characteristics of social enterprises are:- “essential to the new organisational forms we will have to develop to cope with the challenges of a shrinking world” Social enterprises as catalysts; Reed Paget, Belu Water “they challenge the traditional businesses to come up with environmentally or socially friendly alternatives” “encourage the battle between big businesses and entrepreneurs as it will benefit society and the environment”
  26. 26. David Bornstein... How to change the world: Social entrepreneurs & the Power of New Ideas “Over the past century, researchers have studied business entrepreneurs extensively...In contract, social entrepreneurs have received little attention. Historically, they have been cast as humanitarians or saints, and stories of their work passed down more in the form of children’s tales than case studies. While the stories may inspire, the fail to make social entrepreneurs’ methods comprehensible. One can analyse an entrepreneur, but how does one analyse a saint?” “An idea is like a play. It needs a good producer and a good promoter even if it is a masterpiece. Otherwise the play may never open, or it may open but for the lack of an audience, close after a week. Similarly, an idea will not move from the fringes to the mainstream simply because it is good; it must be skillfully marketed before it will actually shift people’s perceptions and behaviour.”
  27. 27. Why here? • Social entrepreneurship provides a unique opportunity for researchers from different fields and disciplines to challenge and rethink central concepts and assumptions (Mair and Marti 2006)
  28. 28. Academics/Institutions involved Andreas Heineke – Danone Chair of Social Business at EBS University, Weisbaden, Germany – – – – – tolerance, open dialogue and exchange Dialogue in the Dark social-franchise system Empathy/tolerance & greater public understanding Focus on potential not deficiency, ability not disability Rethink bus. educn & redesign business behaviour Veroniek Collewaert – Asst Prof. Of Entrepreneurship, Maastricht University “SE is increasingly relevant and something we should be stimulating and helping” Professor Michael Gordon – University of Michigan – Design your life; change the world Skoll Centre for Social Entrepreneurship at Said Business School at Oxford Univ
  29. 29. Academics involved Paul C. Light – Professor at New York University’s Robert F. Wagner School of Public Service and author of “The Search for Social Entrepreneurship” New Insights 1. SE’s are NOT like other high achievers – they make deliberate decisions to solve social problems, rather than simply stumbling into their work by accident or circumstance. Driven by challenge, unshakeable optimism & commitment 2. SE’s entrepreneurial ideas are BIG....greatest ideas can start small but eventually break the social equilibrium. Most research focuses on imagination, invention and launch but IMPACT requires scaling up, diffusion, sustained pressure and navigation of the “ecosystem of change”. 3. Opportunities for grand change come in waves – history shows this in specific punctuations or focused periods - experimentation drives the hope for widespreaad change 4. Socially entrepreneurial orgn’s are built to make change – they are relatively flat, singularly focused on the idea of change and often inexperienced in administration and bureaucracy. Little appetite for academic research and clear that older orgn’s can change or spin out SE’s Tried truths I. SE’s do not always act alone – teams produce improved results II. Older organisations can nurture social entrepreneurship eg. Univ’s
  30. 30. EFMD Conference • Whether here by accident or design? • Make the most of the opportunity • Enjoy