Why Social Enterprise Matters

Social Enterprise is a fairly new phrase in the English language but what does it actually mean?

I started to think about this in more depth when I was asked to be the keynote speaker at the above conference in Stafford.

Enterprise is vital for the success of any economy. Entrepreneurs create wealth, not just for themselves but for any society where they are encouraged to flourish.

We only need look at what has happened to Venezuela to see how a lack of enterprise can drive a nation, and therefore its people, into abject poverty. Despite having the world’s largest reserves of oil, Venezuela adopted a political system 20 or so years ago that discouraged enterprise and drove entrepreneurs out and which has factually resulted in an economic mess.

As I write, the country has very little food on its supermarket shelves and over two thousand, yes that’s right, over two thousand percent inflation.

If that happened to the UK, millions of jobs would be lost and the worst hit would be the poor. They always are!

We must focus on wealth creation rather than whether someone is wealthier than someone else. I certainly believe that a redistribution of wealth is long overdue but not in the way some politicians believe.

I would like to see what I call ethical entrepreneurship become the norm. Where we teach future generations of children that making money isn’t bad, in fact it’s good. It is how we distribute it after it’s made that needs some adjustment. That in itself would create more social enterprises by default.

We need to harness the powerful horses of free enterprise to the carriage of humanity so that when those powerful, enterprising, horses move forward they tow the whole of society onward and upward with them.

The UK is a very rich country and with some joined up thinking it is quite possible to eradicate homelessness and poverty once and for all but we will not do it by driving the wealth creators out. We can do it however by everyone understanding that we are all important.

It can’t be right that young couples with families cannot access good housing, whether to rent or buy. It cannot be right that people are forced to sleep in shop doorways in sub zero temperatures.

We must build more affordable housing and look at how shelters can be provided for the people affected by drug or alcohol abuse and we must certainly focus on how people with mental health issues are cared for.

Unfortunately none of the above is possible without firstly creating the money to pay for it.

In my opinion entrepreneurs & family businesses are the backbone of wealth creation. There are nearly five million family businesses in the UK, some very wealthy and some not so much.

Many of these entrepreneurs work 100 hour weeks with no guaranteed wage, no pension provision, no sick pay, no holiday pay, and often have put their homes up as security to get startup loans or funds to expand. If they succeed, they deserve to benefit because they will have benefitted society too.

These are not robber barons who seek to drain pension funds of employees so that they can buy yachts. They are fully paid up members of our communities. They work long hours to create and run the businesses which supply us bread & milk, sell us newspapers, landscape our gardens and build our houses.

Unless wealth is first created there is nothing available for society to spend on vital services. Services like our wonderful NHS, brilliant police & fire service and the public servants who run councils and other public services around the country.

Venezuela is not the only example of a country where the lack of enterprise and entrepreneurs caused an economic collapse. It’s just the most recent. The same happened in the Soviet Union, Cuba and many other countries around the globe.

I spent sometime in the Soviet Union before its inevitable collapse and I can assure you the people generally weren’t happy. I was also there when the Berlin Wall came down and it was like a carnival. Smiling faces everywhere. Even the Soviet rulers were mostly relieved the ill-founded experiment was over. It didn’t work then and it won’t work now.

So to go back to the original question, what is a social enterprise? Classically I suppose it is where the benefits of that enterprise are felt within society. Where any surplus is ploughed back into either expansion of the enterprise itself or given back to society in the form of free services or products.

Some would argue of course that any business which pays its tax, pays people properly and works within the law, is in fact a social enterprise and there is certainly a lot of truth in that.

 

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