Social enterprise - Driving a Wellbeing Economy for Scotland: action plan 2024-2026

Priority 1: Stimulating Social Enterprise

Over the lifespan of the Social Enterprise Strategy, stimulating social enterprise activity in Scotland has been a key driver, helping to nurture an inclusive and sustainable economy. The Business Purpose Commission recently set out that embedding clear purpose in business will benefit customers, employees, suppliers, communities, the environment, the natural world, and help steer business through economic challenges. Social enterprises embody a unique blend of entrepreneurial zeal and social purpose; providing innovative solutions to pressing social, environmental, and economic challenges while being underpinned by fair work principles that enhance community resilience and promote social justice.

Building a dynamic economy that respects the planet as well as serving the wellbeing of current and future generations is critical to the Scottish Government’s four priorities of: Eradicating Child Poverty, Growing Scotland’s Economy, Tackling the Climate Emergency and Improving Scotland’s Public Services. Scotland’s social enterprise community is a vital partner in achieving this vision. It is important that the social enterprise ecosystem continues to look outward, identifying opportunities to work in partnership across the wider entrepreneurial and business landscape in order to fully leverage the opportunities and showcase what sector has to offer.

In a time of global challenges, social enterprises offer innovative and financially sustainable solutions that support the journey towards a fair, green and growing economy. We know that our young people are more socially and environmentally conscious than ever, and by fostering social entrepreneurship and innovation, Scotland can harness this creativity and passion, encouraging a new generation of socially conscious leaders. The actions in this plan aim to leverage additional resources into the social enterprise ecosystem, including providing opportunities for the people of Scotland to invest into social enterprises through community bonds and shares, enhancing opportunities for community-driven solutions and supporting sustainable growth.

To help stimulate social enterprise activity in Scotland, we will:

Invest £3.2m in the Social Entrepreneurs Fund across the life of this Action Plan, expanding access to include applications from community groups.

Encouraging an entrepreneurial mindset and more entrepreneurs starting businesses is vital to deliver our National Strategy for Economic Transformation^[7]. It is people who make the difference. We will create a culture in which entrepreneurship is encouraged, supported and celebrated, and where Scotland is recognised as one of the best countries in the world to start and grow business. Across the last Action Plan, the Social Entrepreneurs Fund supported hundreds of social entrepreneurs to take their first steps into business. We will continue our support for this critical funding by investing a further £3.2m into the programme as part of this Action Plan to ensure that more entrepreneurs have the opportunity to bring their business ideas into reality.

The tremendous success of the Scottish Government-funded Accelerate programme, which supports organisations to become more sustainable and enterprising, has shown that there is a wave of community organisations looking to move towards greater self-sufficiency through adding a trading arm and becoming social enterprises. From Summer 2024, in addition to continued support for individual entrepreneurs, the Social Entrepreneurs Fund will pilot supporting a number of applications from community organisations that have participated in the Accelerate programme. This will add to the existing pathway of investment and support available for community- driven initiatives.

Ensure that Scottish social enterprises are promoted, recognised and valued as mainstream business models both within Scotland and internationally.

While social enterprise in Scotland is anchored in the values and ethos outlined in the Voluntary Code of Practice for Social Enterprise in Scotland^[8], it is recognised that alternate definitions exist, especially within an international context. The Social Enterprise World Forum’s^[9] People and Planet First and the EU Commission^[10] are both examples of organisations using a broader definition of social enterprise. We are committed to reviewing these definitions collaboratively with the social enterprise ecosystem.

We will work with the ecosystem to foster increased collaboration across the social economy with the private sector and with the people of Scotland. Highlighting where a social enterprise business model can help support delivery on environmental, social and governance targets and looking to support knowledge exchange and best practice across the various business models.

We recognise the importance of increasing awareness and understanding of social entrepreneurship as a key economic contributor among a variety of audiences. The Entrepreneurial Campus Report^[11] sets out the importance of developing social entrepreneurship in our young people. We will continue to support the learning of entrepreneurial skills within Scotland’s schools, further education providers and universities, embedding entrepreneurism into the curriculum and applied research and commercialisation pathways. This will include further investment in 2024/25 of £612,000 in the Social Enterprise Schools programme, ensuring that Scotland’s young people are exposed to the benefits of a social enterprise business model.

Continue to invest in entrepreneurship and commercialisation opportunities across the social enterprise ecosystem.

Through our world-leading business support contract, delivered by Just Enterprise, Scottish Government will continue to deliver £2.8m of funded business support for the Third Sector across the lifetime of this Action Plan. This will enhance the financial sustainability of existing organisations, supporting them to increase their long- term sustainability and scale up where appropriate.

Additionally, we will invest over £500,000 in The Ventures Lab and Social Impact Spin-Out (SISO), a pioneering programme of support and investment which provides a collaborative venture building model through close alignment with The Entrepreneurial Campus strategy, coupled to providing financial and administrative support to aspiring or early-stage entrepreneurs to establish and grow scalable social ventures with national and international potential.

Finally, we will work with organisations that seek to leverage the financial resources of Scottish people into social enterprises whilst also building local ownership and control of community assets. This continued support for the emerging Democratic Finance agenda recognises it as not only a vehicle for securing new private sector investment for social enterprises, but also as part of Scottish Government’s strategy to grow Inclusive and Democratic Business Models.

Provide additional support to enable social enterprises to embrace digital transformation.

A Changing Nation: How Scotland will thrive in a digital world^[12] sets out the requirement for everyone to have digital access and develop the digital skills required to have a strong economy. Social enterprises are playing a pivotal role in upskilling people to work in our new digital age as well as contributing towards the digital economy. In the most recent social enterprise census, 63% of social enterprises respondents had increased their digital delivery support in the last 12 months. Scottish Government will work with national delivery partners to promote the uptake of digital technologies within social enterprises, with a strong emphasis on ethical practices and governance which is essential for sustainability and growth in the digital age.

We will also support Social Enterprise Scotland to establish a digital forum, supporting experts in digital technology from across the enterprise ecosystem to assess the current support available for digital transformation. This will highlight opportunities where practices could be enhanced or adopted by social enterprises, embedding this into existing programmes.

Enhance support and coordination for social enterprises looking to access funding or business support.

Key themes emerged from the action plan consultation, highlighting the necessity for a commitment to continuous improvement and leveraging social enterprise census data to inform activities.

We will work closely with existing and new delivery partners across the entrepreneurism ecosystem, gathering input from intermediary organisations and our enterprise agencies to ensure that improvements in existing delivery are implemented as required. This will ensure that signposting and access to relevant support is as easy as possible for social enterprises seeking support.

Areas of focus across the next two years will include: streamlining support and funding for social enterprises by enhancing coordination and programme delivery among support organisations, ensuring that there is a ‘customer-focussed’ approach to support; the establishment of a sector-led stakeholder group for gathering service feedback and to highlight areas of duplication; conducting pilot programmes to test the effectiveness of streamlined, customer- focussed support, utilising improved data-sharing initiatives; promote the importance of early guidance for entrepreneurs and emerging enterprises on legal structure options, including social enterprise models.

Encourage local and regional networking and collaboration by Social Enterprise Networks (SENs) and Third Sector Interfaces (TSIs).

We know that in some areas of Scotland a strong Social Enterprise Network can act as a bridge between local and national, nurturing robust connections and promoting peer support among local social enterprises. We also recognise that this focal point is not currently present in all localities. We will work with the social enterprise ecosystem to encourage the establishment of more Social Enterprise Networks across localities where gaps in support exist.

Across this Action Plan we will look to support collaboration of existing SENs and TSIs to operate on a regional basis, facilitating partnerships between social enterprises, local authorities, and regional enterprise agencies to bolster and align with the five pillars of Community Wealth Building^[13] and support regional transformation efforts. By developing cross-sector collaboration, resources can be utilised more effectively, fostering innovation in tackling complex challenges and expanding access to resources and opportunities for sustainable economic growth.

Open a dialogue with the Scottish National Investment Bank (SNIB) to encourage investment into the social enterprise ecosystem.

The £30m social enterprise growth fund announced in the 2021-24 Action Plan continues to offer innovative patient capital products to support social ventures sustain and grow their business. Additional investment through SNIB could help ensure that the range of social finance products available continues to meet the needs of Scotland’s ambitious social enterprises.

In line with SNIB’s investment strategy^[14] and with the recommendation made in the ‘Developing Scotland’s Economy: Increasing The Role Of Inclusive And Democratic Business Models’ report^[15], we will support social enterprises to engage with SNIB to help to realise SNIB’s ambition to create local sustainable economies through investing in commercially viable local social enterprises.