19 September 2018 | Herpreet Kaur Grewal
The government must harness the power of social enterprise to make the nation competitive and inclusive, according to research by Social Enterprise UK.
The combined contribution of social enterprise to the UK economy is now recognised to be £60 billion, compared with the £24 billion that had been previously estimated by the government and Social Enterprise UK.
The Hidden Revolution by Social Enterprise UK, supported by the Co-op Group and Nationwide Building Society, shows that the size of the social enterprise sector has been significantly underestimated. And it exhorts the government to harness the collective power of the UK's growing social enterprise sector if the economy is to become more competitive and inclusive.
The research defines the sector as organisations with an enshrined primary social or environmental mission and which principally direct surpluses towards that mission.
For the first time it has considered the impact of 5,000 larger social enterprises, as well as small and medium-sized social enterprises.
Taken together with other data, this means that there are about 100,000 social enterprises, contributing £60 billion to the economy and employing two million people.
In total, social enterprises are worth around 3 per cent of UK GDP - three times larger than the agricultural sector - and 5 per cent of all UK employment, employing as many people the entire creative industry sector.
This study has been released at a time when social enterprises are outperforming traditional forms of business and contributing more to society:
More social enterprises are growing compared with the rest of UK business - 47 per cent of social enterprises increased their turnover in the past 12 months, compared with 34 per cent of UK business.
Social enterprises are more innovative compared with other firms - 50 per cent introduced a new product or service compared with just 33 per cent of small and medium-sized businesses.
The wider inclusive economy contributes more in tax than private companies without a social purpose - Britain's top 5 cooperatives pay more tax than Amazon, Facebook, Apple, eBay and Starbucks combined.
Social Enterprise UK, the Co-op Group and Nationwide Building Society are calling on the government to take greater notice of the growing importance of the sector and back its growth through a comprehensive package of measures. This would build on the Civil Society Strategy published last month and the Industrial Strategy published by government last year.
Measures could include:
Using public procurement policy to support social enterprise by strengthening the Social Value Act.
Amending company law so that businesses have to pay more regard to their social and environmental responsibilities.
Consider how the tax system can incentivise businesses that have a social as well as an economic impact on society.
Embedding social enterprise in the school curriculum so that young people are aware of the option of starting or working for a social enterprise.
The report's authors say that without backing social enterprises, the country will struggle to remain competitive, leaving communities across the nation more vulnerable.
Value of social enterprise sector found to be significantly underestimated at £24 billion versus the real contribution it makes of £60 billion.
Latest evidence shows social enterprises are performing better economically than traditional firms.
The sector employs one in 20 people and accounts for 3 per cent of GDP - three times larger than agriculture and as big as creative services.