Deprived communities a start-up hotbed

According to the findings, detailed in the organisation’s Fightback Britain report, social enterprises outnumber mainstream small businesses in the country’s poorest areas by three to one, with one third of all social enterprises originating in such areas. The report, supported by The Co-operative Bank, estimates there are currently 62,000 social enterprises across the country.

 

The research reveals a greater proportion of social enterprises have recorded growth over the past 12 months (58%) than small businesses (28%), with over half (57%) forecasting continued growth in the coming year. By comparison, just 41% of small businesses are expecting growth over the next 12 months.

 

Social Enterprise UK, formerly known as the Social Enterprise Coalition, argues such a “thriving business community” is capable of being a vanguard to: “An economic fightback and bringing social recovery to Britain’s most deprived communities, arguably hit hardest by the recession, and where wealth-creation and entrepreneurship are needed most.” The report says over four-fifths (82%) of social enterprises reinvest their profits into their respective local communities.

 

Social Enterprise UK’s chief executive Peter Holbrook said the organisation is very excited by the research: “The findings show that it is social enterprises, not private sector businesses that are starting up in Britain’s deprived communities, boosting local economies and creating jobs whilst remedying the country’s social and environmental problems.”

 

He continued: “Some of the biggest social enterprises operating in the UK today are those that started in the recession of the 80s. We’re seeing a new generation of social enterprises being created during these incredibly difficult economic times and in the communities where they’re desperately needed.  And the research shows that the general public are buying from social enterprises, which is an important indicator that social enterprise is really starting to take hold.  Very soon social enterprise could change the face of British business.”

 

"The government fully supports the creation and expansion of social enterprises, and we want to create the right environment for these enterprises to grow,” explained business secretary Vince Cable. “It is hugely encouraging to see so many social enterprises starting and expanding, and creating jobs in local communities. My department is working with the Office for Civil Society to establish how government can continue to support social enterprise and remove barriers to their growth."

 

Paul Martin, head of charity and social enterprise at The Co-operative Bank, said the findings recognised a shift in both consumer thinking and behaviour: “People want businesses to have a positive influence on society, which is why social enterprise has shown stronger financial growth compared with the general market. 

 

“In the wake of the banking crisis The Co-operative Bank saw a 79% increase in new customers switching from rivals as consumers opted to bank with a business with a trusted reputation and an ethical brand. An increasing number of consumers are embracing social responsibility and this will favour the continued growth of social enterprise in the UK.”

 

In addition to the report, Social Enterprise UK also announced it will launch a national awareness campaign to highlight social enterprise later in the year.