Wednesday, 21 August 2013
Getting down to business, socially
But what do they mean, and is socially driven business sustainable? If so, how? These were two of the questions posed at the beginning of this lively conversation on 'Business for the other 99%' by the chair, Martin Simes, CEO of the Scottish Council of Voluntary Service (SCVO).
The speakers this evening will be Frank McKillop (ABCUL), Kirsty Burnham (SoLoCo), and Josh Littlejohn (Social Bite). Habib Malik (Islamic Relief Worldwide) was sadly not able to be there.
Credit unions are member-owned cooperatives offering financial services, explained Frank McKillop. There are one hundred plus in Scotland, and another 300 or more elsewhere in these islands. The exception at present is Perth and Kinross, but that gap will be filled soon.
Some 327,000 people (44,000 junior savers) are served by CUs in Scotland, borrowing £24 million with another £335 million saved. This is small by banking standards, but has enormous potential, as Archbishop Justin Welby has pointed out, among others.
Josh Littlejohn (Social Bite) started out setting up an events company business. Inspired by Nobel Prize winner Muhammad Yunus and his 'social business' vision, he then set up a sandwich shop which not only offers good food but involves homeless people in running it. It has been so successful that another will be following.
At the same tim, Josh kept one event, the Scottish Business Awards, going (former US president Bill Clinton has been involved) and has also helped set up the Scottish Social Business Fund.
Kirsty Burnham's SoLoCo supports people involved in crowd-funding ventures. This helps people to build and market the business while raising funds for it - in Kirsty's instance, involving selling chocolate bricks!
Globally, 40% of the world's population exists on just 6% of its resources, Josh pointed out. Many are excluded from the business world. Charities depend on a few generous individuals. Social enterprise combines the self-propelling and self-running features of business, but with social benefit built in at every level. This is a much better way forward.
What about Credit Unions? Are they social enterprises? Yes, says Frank. The aim of the DWP and the movement is to double itself by 2019, with an emphasis on developing a technological advantage. In places like Kenya, CU's are ahead of the game by using mobile phones. There is great potential in Eutope. 200 million people use them in 100 countries, including a quarter of the populations in the US and Canada.
But will Crddit Unions's end up simply being privatised? We must guard against this. At present, they cannot be de-mutualised by law, only dissolved, and that is a great protection. It is important to keep the cherry-pickers and carpet-baggers away.
The important thing is that these bodies are built by users, not investors. They have a potential to address the major problem of financial institutions recently, which is that they are driven by shareholders with narrow interests.
There are also businesses that are somewhat 'in between', like John Lewis, which is employee owned but does not have a particular social mission.
'Community owned' has a stigma attached to it in some quarters - the idea that the quality will somehow be lower quality, This needs to be challenged. Likewise, Credit Unions should not be seen as a "poor person's bank" in the negative sense.
The dominant assumptions of business since the 1980s have been that 'private' is good and efficient, whereas 'social' or 'public' is inefficient. But the financial crash and the emergence of different models of business are questioning this profoundly.
GDP, for example, offers a money measure of 'success', but not an environmental or social impact one. In the US, sociologists and entrepreneurs are beginning to talk about the 'caring economy'.
"There is still a whole world that doesn't yet get this," observed Kirsty. "Entering our world is like entering Narnia for them, a wholly different universe."
Oxfam's Human Kind Index is one of the developing alternatives to narrow GDP growth models, indicated Martin Simes, pointing out that the social sector was in many respects outperforming the traditional private sector.
Given global developments in recent years, the first question we should ask is about the sustainability of the current system.
"The biggest problem when I came out of university was that social business was just not in my consciousness," observed Josh. Visibility is the key. Social enterprise needs its brands, and people need to get that it is something for them, not just something for someone else to do and think about.
"We need to change the language, we need to be normal," declared Martin.
"If we become a brilliant sandwich shop, then we have the edge," said Josh of Social Bite. "Because no one can compete with our story, with the involvement of homeless people, and with the other things we do."
So is there a marketing edge to all this? There is for those involved, said Martin Simes. "We get people queuing up to work in our sector. It's a significant motivator. People want to be able to do something useful with their lives."
Big investment and funding is also crucial, and it is beginning to take off in Scotland and elsewhere, he added.
"Leadership is such a key aspect in any Credit Union or social enterprise," said Frank McKillop. "Someone who can take it to the next step, but then also help to replicate and develop models and best practice. There are enthusiasts who can be trained and mentored. We have to work together to achieve succession planning - one of the most important courses we offer, though not enough people go on it!"
Education is another key. People leaving school need to know that social business is an option for them. Also, people need to see the tangible difference it makes, locally and globally. It is a question of tapping into, and broadening, the enthusasism.
At present you can do an MA in social enterprise at the University of Bangalore in India, but not in Scotland. That needs to change.
"A passionate workforce who want to bring change" is a crucial resource, Kirsty said.
What of the Co-operative movement and ideal which has deep historical roots going back to the nineteenth century? It can and does play a major role in enabling community ownership, for example of wind farms. But the Co-op Bank has run into problems, not being member-owned and being dragged in a commercially top-heavy direction.
"Being a social entrepreneur is an expensive hobby," one audience member observed. "Being an entrepreneur, full stop!", replied Kirsty. Resources for start-ups can be tough. Vision and passion can remain the same, how you get to it may change.
Where can you find information? Well, all of the supporting organisations for this conversation, and Social Enterprise Scotland, can provide support, ideas and info. Also the Yunnus Centre.
And what about governance and regulation? Frank said that he felt it was very important that good quality standards and rules were maintained in the social sector. There are, said Martin, some fraudsters out there and we need to be wary of them.
Where does social enterprise government meet social entrepreneurship? Changing the culture of government to a 'can do' one from a risk-averse or bureaucratic mentality is important. Mechanisms like Community Enterprise Companies (CiCs) can be very helpful mediating structures.
Large amounts of transparency are one of the benefits of social business. There is also a need to have support to scale up new organisations.
Just Festival director Katherine Newbigging asked about the dilution of Fairtrade and social enterprise by large corporations.
This is an issue that needs to be faced, commented Josh. "Social business needs to be a major block within the economy, which it isn't yet. We need good regulation, tax incentives, and so on."
"We shouldn't be too precious towards categorizing social enterprise. But we do have to be quite protective of what isn't social enterprise," declared Frank McKillop. "There is a present danger in our sector from those coming in to extract a profit for a small group of investors. If most of the benefit is going into private hands, it isn't really social."
So does social business need an overarching brand? There were mixed views. Different models are important. It is about spreading the socialising idea far and wide.
"A lot depends on getting the message out and getting people involved," Frank added. "Remember the Halifax - it was demutualized and then became a privately owned bank that cheated its customers and became involved in the downward spiral that led to the crash."
Social enterprise is about reversing that negative spiral. It needs to be a big part of a better future.
This has been a developing live blog... please do add comments or corrections below.