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UP

 
'A growing force in our economy'

Social enterprises solve social and environmental problems and are now part of the business mainstream

Alun Michael
Sunday November 20, 2005
The Observer

 
We have a government-wide commitment to building an enterprise culture and supporting enterprising people. The Enterprising Solutions Award helps by recognising the very best of social enterprise.

We need a can-do attitude in all walks of life - not just in terms of wanting to start a business, or changing society, or protecting the environment ... or doing all three at once.

That is why it is vital that enterprise activity is encouraged in the UK to support a diverse economy. And the starting point must be to change mindsets.

Enterprise needs to be seen and understood as a positive and worthwhile activity by those making career choices and by society at large. This will now happen in schools - stimulated this year with the provision of Enterprise Entitlement funding for pupils at key stage 4. It's also being done outside of the classroom, led by organisations such as Young Enterprise, Shell LiveWIRE, the Prince's Trust, Entrepreneurs in Action and Enterprise Insight.

I hope that everyone is now aware that 14-20 November is Enterprise Week - part of Enterprise Insight's Make Your Mark campaign. The government is a key supporter and main funder of this campaign and I am delighted that the first ever Social Enterprise Day took place on Thursday. The day was an opportunity to wave the flag for social enterprise, showcase inspirational role models to young people and celebrate successful examples of social enterprise.

Social enterprise is a growing force in our economy, and part of the business landscape. It is about achieving success by solving social and environmental problems through business.

Our survey found that there are at least 15,000 social enterprises operating across all sectors and all regions of the UK. The vast majority of social enterprises exist to help particular groups of people either through providing employment or providing goods and services. Nearly a quarter had environmental objectives. They generate almost £18bn in annual turnover and employ at least 450,000 people.

The majority of turnover and employment is generated through trading activity. Almost 90 per cent of those surveyed generated 50 per cent or more of their income from trading. In other words, these are serious businesses.

Like other businesses, social enterprises can take different legal forms. In September, I extended that choice by launching a new legal structure for social enterprises, the community interest company. At the last count, 30 businesses have been approved as community interest companies.

This new legal structure provides social entrepreneurs, with a dedicated limited liability structure for the first time. This enables them to compete fairly and to be paid going market rates, to run competitive businesses, while having an 'asset lock' for the community. Regulation provides them with the clear badge they need to unambiguously say, 'I want to do good with my business, not just to do well."

The novel features of the community interest company include a public declaration of intended benefits and methods to achieve them - to be reported on each year. An asset lock ensures surpluses remain within the organisation or its community.

I also believe there is much to be gained from closer links between social enterprises and the private sector. That is why we have just unveiled Match Winners, a guide to commercial collaborations between social enterprises and private sector businesses produced by Community Action Network. My hope is that it will be the catalyst for future partnerships benefiting all.

Finally, with the continued support of NatWest and the Royal Bank of Scotland and England's Regional Development Agencies, together with our partner, the Social Enterprise Coalition, and associate sponsors, Defra, the Oxford Said Business School, The Observer and Social Enterprise Magazine, the Enterprising Solutions Award is now in its seventh year.

With the ever-increasing quality of applications, this is further evidence of the strength and continuous growth of the sector. I congratulate the winners wholeheartedly.

· Alun Michael is minister of state for industry and the regions

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