Internationalising Social Enterprise: A Strategy for Scotland (September 2016)

Social Enterprise: The Current Position

The social enterprise movement is growing in Scotland and around the world. Scotland is uniquely positioned to accelerate and deepen its reputation, influence, and impact in this important field.

A strong domestic offering

Scotland has a long history of pioneering alternative forms of business, including mutuals, co-operatives and social enterprises. These reflect a belief in a fairer, more equal society where business activity is used as a means to this end.

The emergence of social enterprise activity has occurred over many decades, with progress most pronounced in remote rural and island communities.

The social enterprise sector now holds a unique importance to Scotland. There are more than 5,000 social enterprises active across the country with a combined annual income of £3.63bn, supporting 112,409 jobs, and contributing £1.68bn of Gross Value Added ( GVA) to the Scottish economy ^[1] . This economic contribution places the sector among Scotland's key industries, with social enterprises now an essential part of business and community life.

We as a government are proud of our track record in supporting the sector and in growing its impact.

Part of a global movement

The attention we are placing on social enterprise in Scotland is now being reflected throughout the world. In the aftermath of the global recession there has been a resurgence of interest in social enterprise as a more just and inclusive way of doing business.

The social enterprise movement is growing around the world. While social enterprise looks different in every country there is now a strong common desire to work together internationally to accelerate the growth and impact of the sector.

Scotland has played an important role in building this growing global movement, and continues to actively support its development. The first Social Enterprise World Forum was hosted in Edinburgh in 2008 and the headquarters of this annual international forum is now located in Scotland. Representatives from Scotland are also active in a range of international social enterprise networks and work is ongoing with the British Council and others to shape global developments.

Scotland is uniquely placed to convene international dialogue and shape the development of this global movement, building on the vision and leadership that has given Scotland its world leading reputation in this field.

Looking outwards

The Scottish Government recognises that international markets offer important opportunities for social enterprises, potentially exposing them to new ideas and trading relationships, and stimulating innovation and growth.

We see a small but growing number of Scottish social enterprises that are already capitalising on these international opportunities. Research tells us that 7% of Scottish social enterprises are already collaborating with international partners, contributing to the development of international projects, or selling overseas. The data also shows that approximately 5% exported/licensed goods or services to overseas markets last year ^[2] .

This brings various benefits and challenges. The main reported benefits include extending social enterprise profile, impact, revenues, and opportunities for staff development. Perceived challenges relate to the currently limited capabilities, connections, and capacity available to social enterprises interested in international expansion, and concerns about the associated implications of moving into international markets (e.g. logistics, tax, intellectual property) ^[3] .

We have demonstrated our early commitment to internationalising social enterprise activity. This is evident in Scottish Government support for social enterprise development overseas, a pilot International Social Enterprise programme, and a variety of direct and indirect forms of support to social enterprises developing an international outlook and reach.

International aspirations

In partnership with the sector, we have consulted widely during the development of this strategy and found a strong interest in internationalising social enterprise activity. Stakeholders have roundly welcomed the opportunity for Scotland to enjoy a growing international role, visibility and reputation for its work on social enterprise.

Scotland is a country increasingly comfortable with its distinctive contribution in the world. Leaders within our social enterprise movement have already demonstrated considerable vision and ambition. There is already a coherent, connected and effective ecosystem of support for social enterprises on which to build.

We also understand that there is more to be done and there are opportunities for Scotland to play a lead role as social enterprises develop across the world. To realise these opportunities we must encourage a social enterprise world view, an understanding of our place within the global movement, and openness to the international opportunities that arise. We must move from a piecemeal to co-ordinated response in order to capitalise on these international opportunities. We must also adequately resource our ambitions to internationalise social enterprise and ensure capacity is in place to deliver.

Challenges Worldwide

Challenges Worldwide is an awardwinning international social enterprise, headquartered in Scotland. It delivers tailored programmes that support entrepreneurs and enterprises in emerging economies, in doing so strengthening skills and abilities locally.

Over the last 16 years Challenges Worldwide has provided incountry support to around 2,000 businesses and social enterprises in 40 countries. Its senior mentors have acted as business experts to development agencies, philanthropic trusts and international NGOs, and supported national business development programmes. In partnership with Scottish universities, placements have provided students with first-hand experience of international development while bringing fresh ideas and expertise to local enterprises. Collectively the enterprises assisted by Challenges Worldwide have gone on to raise over £20 million investment, more than £30m in trade linkages, and created many hundreds of jobs for local families.

Challenges Worldwide seeks to embed in-country expertise and capacity. Its local social enterprise consultant capacity building programme has supported over 400 participants in Ghana, Uganda, Malawi, Zambia, Sri Lanka, Myanmar and elsewhere. Between 2012-2015 the Scottish Government funded Challenges Worldwide to build up the in-country expertise of the Malawian social enterprise Umodzi Consulting, which now provides management consultancy services to a range of organisations in Malawi.

In order to strengthen its international activity, Challenges Worldwide has launched two innovative projects. One is the Challenges College, a social learning and project delivery platform that provides supported access to learning resources, a qualification, and support from a worldwide community of learners, tutors and mentors. The other is the Challenges Marketplace, which enables the operational, financial and impact performance of social enterprises to be tracked and analysed over time.