After the goldrush – Reflections on Social Enterprise Exchange 2012 (part one)

Last year’s annual social enterprise conference, Voice11, saw five government ministers join the shivering throng at the O2 centre in London. This year, Social Enterprise Exchange – a joint event put on by Social Enterprise UK (SEUK) and Social Enterprise Scotland – featured warm sunshine in Glasgow but no UK government ministers at all. Nick Hurd, the minister for civil society, did send a video message…

In his blog on the event, David Ainsworth of Third Sector says: “there was a general feeling that the government had tried some things, didn’t really get what was needed, and had now lost much of its initial enthusiasm for the sector.

Nick Hurd memorably claimed in the early days of the coalition that while there would be smaller cake (in terms of public spending under the new government), civil society would get a bigger slice of that cake. In fact, the government’s policy has been an exagerrated continuation of New Labour’s policy of talking loudly about public services being contracted out to smaller organisations in the community, while directing all the serious cash from public service delivery into the bulging wallets of private outsourcing companies.

While accelarating the creation of an oligopoly of corporate outsourcing monsters, New Labour did also provide considerably funding for social enterprise development. That goldrush is now over and, while there’s still plenty of consultants working in social enterprise, those that are still plugging away are mostly those with strong ideas about what their consultancy is meant to achieve – as opposed to specialists in hoovering up cash for churning out generic business plans and advice sessions on getting loans.

My feeling, significantly reinforced in Glasgow, is that social enterprise – a movement that expends significant intellectual and emotional resources deliberating what it is – is being galvanised by the opportunity to state clearly what it is not, while social entrepreneurs are getting better at explaining the benefits of what they do.

In his opening remarks at the conference, SEUK chief executive, Peter Holbrook, stated: “Bringing a pure profit model to work with the most vulnerable people does not make sense” while in her closing remarks, SEUK chair, Claire Dove, was equally blunt in contrasting social enterprise with the approach of a controversial back-to-work provider: “Thinking about A4E. If I had £8.6 million, what would I do? How many jobs would I create? That’s what the CEO took home. It’s absolutely scandalous.

The overall impression of the conference for me was of anger about the way things are, blended with grim determination to keep going in spite of everything and then combined with an underlying sense of optimism. The workshops that I attended (see part two) were notable for a massive reduction in vacuous bullshit about social enterprise being really nice and ‘so innovative’, with a corresponding increase in practical, sensible advice for people wanting to get on with doing social enterprise.

The lunchtime plenary ‘Good Business and how to do it’ to a ‘big picture’ looked at the role of social enterprise – particularly in the UK – after ‘the world financial catastrophe’. Newsnight’s Kirsty Wark was an engaging chair who seemed to have unusually strong understanding of the issues for a mainstream journalist.

On the panel, Shadow Business Secretary, Chuka Umunna, started by asking: “I’m not the shadow minister for social enterprise – why am I here?” While his enthusiasm for social enterprise was clear, his contributions didn’t entirely answer the question but he spoke strongly on the need to meet the needs of emerging markets and of creating an economy that was “not just about consuming things“. He also talked about an economy focused on long-term value creation rather than short-term profit.

Paul Monaghan from The Co-Operative Group was keen to emphasis the political nature of social enterprise past and present. He challenged the popular image of the Rochdale Pioneers, regarded as the founders of co-operative retail, as men with cloth caps and whippets who just wanted to run a local shop. He pointed out the the Pioneers were Chartists and that their political agenda included developing social housing and ultimately ‘owning the means of production‘ co-operatively. He said that: “Good business is doing the right thing – even when there isn’t a business case – and staying politically engaged” and that if it was easy, everyone would be doing it.

Chris Dabbs of Unlimited Potential, asking a question from the floor, raised doubts about the (currently popular) idea of ‘responsible capitalism’ saying: “I didn’t come into social enterprise to be a capitalist” and that he supported a different economic system based on social benefit. This prompted a discussion on what people meant by capitalism. Paul Monaghan complained that capitalism had come to mean “the people putting up the capital get all the surplus.” He called for a better awareness of different models saying: “we use PLC as synonymous with capitalism, it’s not.”

Panelist, Sophi Tranchell, of Divine Chocolate, pointed out that: “There are different ways of doing business and they are significantly different.” She called for business models based on involving workers in decision-making and generating profits for “many people not few.” She challenged corporates to adopt social enterprise approaches saying: “they can join us if they want to.” She also said that mainstream businesses should be made to report on their social impact so that customers could take that into account when deciding whether or not to buy their products.

Fellow panelist, Jim Duffy, of Entrepreneurial Spark, which supports start-up social enterprises in Glasgow and beyond, emphasised that mainstream business would always have a role saying: “We need capitalism. We need that growth and you’re never going to change that.” His organisation had successfully sourced funding from business leaders, including Sir Tom Hunter, to pay for free office space for social enterprises.

It was a discussion focused on ideas rather than practical answers but it reinforced the impression that the social enterprise movement is moving away from a heavy focus on public service delivery – though this will clear remain important – towards playing a bigger role in the wider economy. More in part two.


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5 responses to “After the goldrush – Reflections on Social Enterprise Exchange 2012 (part one)

  1. David, I was just responding to a Guardian blog about OxJam, where the trend toward capitalism with a primary social objective seems to be gaining considerable traction.

    I was interested to note recently how Starbucks were pushing the envelope with the CEO Howard Shultz calling on shareholders to invest in social projects which had nothing to do with selling coffee. Just what was suggested to Bill Clinton 15 years ago. and considered economic heresy at the time.


  2. Picking up on Peter Holbrook’s point about pure profit and working with the most vulnerable. It was in support of the most vulnerable where we argue the case for profit to be applied to achieve primary social goals,

    ‘This is a long-term permanently sustainable program, the basis for “people-centered” economic development. Core focus is always on people and their needs, with neediest people having first priority – as contrasted with the eternal chase for financial profit and numbers where people, social benefit, and human well-being are often and routinely overlooked or ignored altogether. This is in keeping with the fundamental objectives of Marshall Plan: policy aimed at hunger, poverty, desperation and chaos. This is a bottom-up approach, starting with Ukraine’s poorest and most desperate citizens, rather than a “top-down” approach that might not ever benefit them. They cannot wait, particularly children. Impedance by anyone or any group of people constitutes precisely what the original Marshall Plan was dedicated to opposing. Those who suffer most, and those in greatest need, must be helped first — not secondarily, along the way or by the way. ‘

    In 2008 this message was escalated to the US Senate’s committee on Foreign Relations:

    ‘Thank you for your time and attention to this. I and others will look forward to hearing from you. I hope we continue to realize ever more fully that outside the box and inside the box have only a box in the way. We outside the box know quite a bit of what’s going on, many times in exquisite detail, perhaps in ways that those inside the box can’t quite as easily access if at all. We are grossly underfunded in favor of missiles, bombs, and ordnance, which is about 100% backwards. Now, with even the US Pentagon stating that they’ve learned their lesson in Iraq and realize (so says top US general in Iraq ten days or so ago) that winning hearts and minds is the best option, I and others shall continue to think positive and look for aid budgets and funding spigots to be opened much more for people and NGOs in silos, foxholes and trenches, insisting on better than ordnance, and who understand things and how to fix them. We can do that. We can even do it cost-effectively and with far better efficiency than the ordnance route. Welcome to our brave new world. Except it’s not so new: learn to love and respect each other first, especially the weakest, most defenseless, most voiceless among us, then figure out the rest. There aren’t other more important things to do first. This message has been around for at least two thousand years. How difficult is it for us to understand?’


  3. Call me an old cynic but could it be that government ministers no longer have much use for social enterprise now that the Health and Social Care Bill has passed into law? Just a thought 🙂


  4. Beanbags admin

    Well, I think when the coalition first came to power there was a genuine question about whether they were really interested in creating a more diverse market of public service providers – and giving people more choice and control over the services they use – or whether they just wanted to support short-term costs savings and the illusion of shifting risk off the public balance sheet.

    That question has been conclusively answered and we all have to move on accordingly.


  5. Pingback: ‘Sell people something they don’t have’ – Reflections on Social Enterprise Exchange (part two) | Beanbags and Bullsh!t

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