Transforming Scotland’s economy with social enterprise

Posted: 10 March 2022, in Blog

As many of us know, social enterprises have been transforming Scotland’s economy for a number of years. 

This social economy, alongside traditional charities, values-led business, fair work and Community Wealth Building, is vital to tackle climate change and inequality and drive a broader wellbeing economy.

Social enterprises, charities and community and voluntary groups make a significant economic contribution to Scotland. As we await the results of the latest Social Enterprise Census, post-lockdown, we can look to the most recent figures that evidence this economic impact.

According to the 2019 study the social enterprise community has a Gross Value Added (GVA) to the Scottish Economy of £2.3bn, the measure of the value of goods and services produced in the sector.

Social enterprises create economic wealth in terms of trading, regeneration and the over 88,000 full time equivalent jobs in the sector but, of course, their significant social impacts are equally as important.

Providing job opportunities for disadvantaged groups, driving arts and cultural activities, running social care services and re-distributing wealth back into local communities are all vital for genuine economic transformation.

The Scottish Government recently published Scotland’s National Strategy for Economic Transformation.

This new report came about as a result of the work of a Scottish Government Advisory Council, chaired by government Economy Secretary Kate Forbes, last summer, involving business leaders, academics and economists.

Social Enterprise Scotland submitted a response to the consultation on the new strategy, in partnership with a number of social enterprise leaders. 

We called for an end to a traditional “business as usual” approach in driving economic transformation and building a genuine wellbeing economy.

We called for a cross-sectoral approach, working in partnership with others across the third, public and private sectors. 

We also asked that existing pledges on e.g. Community Wealth Building, social investment, a green recovery, social enterprise development and fair work are joined up and mainstreamed within economic policy.

The six parts of the new National Strategy for Economic Transformation are:

  • Entrepreneurial people and culture
  • New market opportunities
  • Productive businesses and regions
  • Skilled workforce
  • A fairer and more equal society
  • A culture of delivery

The vision in the strategy includes the commitment that Scotland will be recognised at home and throughout the world as “the best place to start and to grow a business or social enterprise.”

As a practical action it commits government to: “Undertake and publish a review of how best to significantly increase the number of social enterprises, employee-owned businesses and cooperatives in Scotland, supporting regional regeneration and the wealth of local communities. This will learn lessons from best practice in other countries.”

There is also a pledge to drive new models of business support: “This includes new tailored support for businesses with alternative ownership models, including cooperatives and social enterprises as well as in our rural and island areas, and we need more effective data and feedback on what our support delivers.”

In the “Foundations of Success” section it says: “It is important to be clear that our focus on boosting entrepreneurial activity is not about a false stereotype of creating a small number of successful individuals; it is much broader. Entrepreneurship across the wider business base can drive social mobility, create fulfilling jobs and deliver the economic prosperity necessary to sustain thriving local, and rural communities and positively disrupt traditional sectors that might ordinarily be considered as less productive. In particular alternative business models such as cooperatives, social enterprises and community-owned businesses can deliver strong outcomes on fair work and benefits to local communities.”

There is certainly much to be welcomed in the new report but we must ensure that all social enterprise voices continue to be heard going forward. 

We strongly believe in positive economic transformation that directly benefits both people and planet. Social enterprises and third sector organisations must be at the forefront of this change.

Duncan Thorp, Policy and Public Affairs Manager, Social Enterprise Scotland