SOCIAL ENTERPRISE NEWS
Social Enterprise Census 2019 is the third research project to map the size, character and support needs of social enterprises in Scotland. Since 2015 it’s fair to say that we’ve recorded some impressive growth and development.
Social enterprises make up an increasing proportion of Scotland’s formal economic statistics. However, it’s not just about economic impact but also the powerful and often hidden social impacts they provide. Building a new well-being, circular and inclusive economy is what social enterprise is all about.
Social enterprises are independent businesses that have a specific social or environmental mission. They generate income by trading and invest their profits in their purpose. From ethical gifts to social housing, inclusive sports centres, childcare, community transport and more.
According to Census 2019 there are now 6,025 social enterprises in Scotland, up from 5,600 in 2017 and well up on the 5,199 recorded in the first ever study in 2015. That means that in just 4 years the numbers have increased by nearly 16%. This shows a positive trajectory and is testament to the hard work of social entrepreneurs and the funding, policy and business support provided by a variety of agencies.
Social enterprises employed 81,357 full time equivalent workers in 2017, this has now risen to 88,318, a 9% increase in job opportunities. Housing in the social enterprise space provides most jobs, followed by health and social care and education, training and employment.
This represents not just more jobs during economic uncertainty but is often targeting those furthest from the job market. It also opens door for young people – who are looking for something more fulfilling than a standard corporate job.
The new Census states that the economic contribution (GVA) of Scotland’s social enterprises is £2.30bn. This is up from £2.04bn in the last study and up from £1.68bn in 2015. This presents a 37% increase in just 4 years.
In addition while the number of social enterprises in Scotland has grown by 8% in two years their economic contribution has grown by 13% in the same period. In 2015 the net worth of Scotland’s social enterprises was £3.9bn. It’s now a big £6.1bn – an increase of 56%.
Some of these big leaps are down to an improvement in publicly available financial data since 2015, allowing us to better measure social enterprise activity, plus improvements in methodology. However, these are strong figures and show the genuine economic and social benefit of the social enterprise way of doing business.
When it comes to ethical business practices, such as those in the Scottish Business Pledge, we’re doing well too. 81% formally support employee involvement in decision-making. The average gap between lowest and highest paid in a social enterprise is just 1 to 2.5. This has remained consistent, with 94% of social enterprises currently not exceeding a 1:5 ratio. An increasing share of social enterprises are paying the real Living Wage, as calculated by the Living Wage Foundation. 75% currently pay this rate, an increase from 68% in 2015.
As evidenced in the report there has been an overall increase in the profit or surplus generated by the sector. However, this does not mean that profitability is strong for every social enterprise and much of the profit is generated by the bigger social enterprises.
There has been an 11% increase in earned income from trading compared to 2017 but costs have increased for the majority. We certainly can’t ignore the reality and struggles on the ground for the majority of these small, community businesses.
Of course statistics don’t reveal everything about social enterprise and it’s difficult to quantify their collective social impact. According to the 2019 Census, social impact measurement is still the greatest support need for social enterprises. While this support is now part of the specialist Just Enterprise contract we still have a long way to go.
To truly understand social enterprise you need to look at what they’re doing in your local community. Their diversity, powerful social impacts and great goods and services can only be appreciated by visiting and buying from social enterprises.
To take social enterprise forward we still need more local authorities and public sector bodies to step up, engage and increase opportunities for social enterprises. Consumers need to question how our economy works – and switch their shopping choices to make a real, lasting difference.
We should encourage more new entrepreneurs to consider a social enterprise option as an alternative to a standard business model. There’s also huge potential in private sector supply chains, something that’s actively being explored.
The growth and success of social enterprise can only really be measured over the longer term. By continuing to improve business support and public awareness we can ensure that Census 2021 produces the best results ever.
The full and headline results of all the Census studies from 2015-2019 can be viewed at: socialenterprisecensus.org.uk
Duncan Thorp, Policy and Communications Manager, Social Enterprise Scotland
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