Scotland's Social Enterprise Strategy 2016-2026

Social Enterprise In Scotland

Social enterprises trade for the common good. They address social needs, strengthen communities, improve people's life chances or protect the environment.

What is Social Enterprise?

We are a nation rightly proud of our long tradition of doing business in a fair and sustainable way. This rich heritage spans a period from the work of Robert Owen - the radical 19th century reformer and pioneer of the co-operative movement - to the new forms of community businesses and co-operatives developed through the 1970s, to the inspiring activity of today's social entrepreneurs.

Scotland's close association with social enterprise reflects a deep-seated commitment among citizens to create a fairer, more equal society.

Today, Scotland's social enterprise sector is part of a global effort towards social change, one that recognises the need for a radically better way of organising the economy for the benefit of all.

In Scotland, social enterprises form part of a wider movement that includes democratic and member-led enterprises and enterprising charities. An increasing number of mainstream socially responsible businesses are also making a distinctive contribution to this movement.

Scotland's social enterprises take many forms depending on different factors, including the socio-economic context in which they arise, the level of democratic participation they practice, and the particular values of the founding entrepreneur(s).

While there is no single set of words that adequately define the diversity of organisations that can be described as a 'social enterprise', there is broad agreement within the social enterprise community on the benchmark criteria and values by which social enterprises can be identified and recognise each other. These are set out in a Voluntary Code of Practice for Social Enterprises in Scotland ^[3] .

This collective understanding of the characteristics, scope and scale of the social enterprise sector will continue to evolve over the next decade. Within this context, we will continue to welcome new ideas and business models that respect the established ethos and values of the sector - a commitment by all social enterprises to use assets and surpluses for the public good and to operate in the wider interests of society.

Social enterprises trade for the common good. They address social needs, strengthen communities, improve people's life chances or protect the environment.

Contribution to Scotland

The social enterprise sector now represents an important part of business and community life.

The data available from Scotland's first Social Enterprise Census provides the most comprehensive picture yet of the scale, characteristics and contribution of the sector ^[4] . It shows more than 5,000 social enterprises currently operating in Scotland.

Successive waves of social enterprise formation have left a rich and varied pattern across the country. Social enterprises are clustered and more numerous in large urban areas, but also hold a unique importance in rural Scotland where one-third of all social enterprises are located.

These social enterprises come in many shapes and sizes, from large national and international businesses to small community enterprises. Most are fairly modest in scale, with three-in-five generating an annual turnover of less than £100,000.

Social enterprises operate in a variety of markets, mostly local ones. Two-thirds sell direct to the general public, while a similar proportion do business with Scotland's public sector.

Social enterprises now operate in almost every part of the economy. They are found in greatest numbers operating community amenities (centres and halls), in the arts and creative industries, delivering early learning and childcare, and providing health and social care services. The level of trading activity by social enterprises is particularly pronounced in health and social care and in housing, which together account for two-thirds of the social enterprise sector's income.

The level of trading activity of social enterprises is substantial. Last year Scottish social enterprises collectively generated £1.15bn of earned income from trading.

Social enterprises now make a major economic contribution. Together, they command a total income of £3.63bn, have a net worth of £3.86bn, employ 112,409 people and deliver Gross Value Added ( GVA) of £1.68bn to the Scottish economy.

Equally important, social enterprises operate in a way that is good for business and good for Scotland. The evidence from Scotland's social enterprise census shows that they tend to be run in a highly responsible and inclusive way, and deliver on an array of social, cultural and environmental goals.

Social Enterprise Reach

Future Trends

What will the social enterprise sector look like in 2026? What will be the main influences, opportunities and challenges that it faces?

Detailed predictions about what the world will look like years from now are destined to be inaccurate. The world is increasingly volatile, complex and ambiguous. In response, the delivery of this long-term strategy must remain agile.

While the future remains unclear, we can point with a degree of confidence to a number of established trends.

While many of these trends will happen independently of government, we recognise that specific policies and actions can affect how they impact on social enterprises.

The influences and trends presented have been identified as both relevant and plausible. They have informed our thinking on how best to help the sector adapt to the dynamic and challenging period ahead.

Political

Enabling Legislation

Legislative and policy decisions will open up future market opportunities, in early learning and childcare, health and social care, land ownership, broadband, transport, and more. In response, we will find new ways of financing and building social enterprise capacity to capitalise on the opportunities that arise.

Future Public Services

The long-term direction of public service reform is set, implying increasingly localised, preventative and personalised public services. Social enterprise capabilities need to transition accordingly if the sector is to take on a greater role, as do public sector commissioning and procurement arrangements.

Subsidiarity

High levels of democratic participation is likely over time to lead to power being devolved downwards. Locality planning, participatory budgeting, and community empowerment are symbolic of the shifts underway. Further work will be required to ensure services are locally organised, people powered, and enterprising.

Social

Demographic Change

An ageing and changing population is placing increasing pressures on services. Innovation, creativity and collaboration will be required if needs are to be met.

Persistent Inequalities

Long-term and entrenched socio-economic challenges are likely to persist and may grow. Entrepreneurial leadership and innovation from within communities will be necessary if transformative change is to occur.

The Influence of Young People

A younger generation will bring progressive values and new expectations about society, business and life. These can help drive growth of the social enterprise sector, but only if the sector can inspire and accommodate these young people.

Ethical Consumption

A desire to live better, more sustainable lives means consumers will increasingly make ethical choices. This may fuel growth of the sector, but only if social enterprises are more visible and able to supply customer requirements.

Economic

A Rebalanced Economy

The continuing, long-term priority of achieving a more balanced economy is driving a broader and more diverse business base. This implies a growing need to foster social entrepreneurship, increase the rate of social enterprise formation, and encourage more diverse forms of business ownership.

Business with Purpose

A growing number of companies are likely to explicitly pursue social and environmental goals, adopt socially-responsible strategies and take on hybrid forms. This will enable greater opportunities for trade and mutual benefit among ethical businesses of many forms.

Scale Through Collaboration

In increasingly competitive and uncertain markets, scale can be a weakness as well as a strength. For social enterprises, it may become increasingly preferable to scale capacity and impact through partnership rather than pursuing an organisational growth strategy. Collaboration, franchising and replication will all come into sharper focus.

Technological

Everything Digital

New technologies will enable greater business efficiency. They will re-shape how we work and interact. For social enterprises with the capabilities, this will enable better ways of organising, delivering services and reaching consumers.

More Connected

Social technologies will become ubiquitous, enabling better communication and real-time interactions. This creates opportunities for connection, collaboration and support across networks of social enterprises.

Transparency and Accountability

Technology will make it increasingly easy to access information and invite more public scrutiny. Social enterprises will need to ensure robust data to demonstrate good governance, social impact and ever greater levels of accountability.