At a Business Breakfast event at the British Academy yesterday, Lord Adebowale, Chief Executive of social enterprise Turning Point, and Peter Holbrook, Chief Executive of Social Enterprise UK, highlighted the role of social enterprises in promoting the concept of social innovation and ethical, sustainable trading as a long-term solution to the future of business.
The event was part of the British Academy's Future of the Corporation project, and outlined the “quiet business revolution” which has seen social enterprise thrive and outperform equivalent parts of the private sector economy.
Social enterprises now make up a quarter of new enterprises in the UK, often driven by millennials who want to do business in a new way.
48% of social enterprises have seen an increase in turnover and profit compared to 34% of small- and medium-sized enterprises. “People work better when they feel they’re working for themselves and their communities, as well as for the business” explained Lord Adebowale.
And their leadership is more representative of the communities in which they work: 41% of social enterprise leaders are women, and 12% are from a black or Asian background.
Yet, Holbrook and Adebowale both expressed a frustration that social enterprises are too often conflated with civil society rather than as businesses in their own right, despite being a sector of the economy that is bigger than agriculture.
Holbrook set out three suggestions for how we can make social enterprise and mutuality a normal way of doing business. He argued public procurement is key to this, following the Social Value Act of 2013 which mandates those spending public money to consider social and environmental value.
“The government has a great ability to shape markets, and if it can reward contracts in a way that nurtures our forgotten towns and communities, that creates the apprenticeships, the work that security…then public procurement is a great route.”
Company law also has a role to play, with incentives in moving the focus away from shareholder interest and towards redistribution of profits, as does a progressive pro-social taxation system which encourages transparency.
Lord Adebowale considered the importance of rethinking the future of business. “The future is created by the things we don’t discuss, not the things we do – and we haven’t had a real conversation about the future of the corporation in a long time”, he said.
“I think we are standing on a burning platform…for the first time, public opinion of business has dropped below 50%”, he added.
“The mistake that we made, was giving the corporation a legal entity, and a legal entity that gave it the same rights as an individual, because as soon as you do that, you give create a personality. And what we have seen… is that this personality is perceived by too many people as ‘sociopathic’. So I think the answer lies in social enterprise,…diversity of thought and diversity of past is what is going to drive British business.”
This breakfast event, supported by the Bates Wells Braithwaite, was part of The Future of the Corporation, a three-year research and engagement project from the British Academy looking at the role of business and its purpose in society – from rebuilding trust to the challenges of rapidly-developing technology.
Find out more about the project and sign up to the mailing list by visiting www.britishacademy.ac.uk/future-corporation.