Ryu Byeong Moon/British Council
The UK government has developed a cross governmental strategy to position the UK as a global centre for the social economy.
The strategy aims to attract social investment to the UK and encourage foreign social enterprises to set up in the country. In addition, it seeks to support increased exports and franchising by UK social enterprises and intermediaries in foreign markets, and to bring back learning from successful social sector innovations and practices overseas.
Minister for Civil Society, Rob Wilson, said: “The time for social investment has arrived and it’s here to stay. These strategies show the strength of our ambition for this sector, ensuring that more and more people are using their money to transform lives and encourage economic growth. Through social investment we are revolutionising the way that public services are delivered, aligning the interests of local authorities, social investors and charities while at the same time helping the most disadvantaged in society. Let’s continue to drive the sector forwards and build a stronger, more compassionate society.”
To maximise its impact, the strategy will be delivered by a number of UK departments and organisations. Developed by Cabinet Office, it will be coordinated and facilitated by the British Council in collaboration with UK Trade and Investment (UKTI), the Foreign and Commonwealth Office (FCO), and the Department for International Development (DfID).
Dr Mairi Mackay, who leads the British Council’s Global Social Enterprise programme, said, “Delivering this strategy through the combined efforts of the UK’s cultural, trade, diplomatic and international development organisations can generate powerful momentum to grow the global social economy, but if we really want to capitalise on this opportunity we must work closely with the social enterprise sector and other key stakeholders. Collaboration will be the key to success.”
The UK is widely seen as having one of the world’s most developed social economies. One in five small and medium enterprises (SMEs) in the UK has a social purpose at its heart and they employ over 2 million people.
According to Social Enterprise UK’s State of Social Enterprise Survey 2015, social enterprises are outperforming SMEs in turnover growth, workforce growth, job creation, innovation, business optimism, start-up rates and diversity in leadership.
Their growth is supported by a vibrant intermediary sector that includes Social Enterprise UK, the national body, and a host of organisations providing specialist support such as incubators, impact measurement bodies and investors as well as universities.
Successive UK governments have worked with the sector to support the growth of the social economy. This has resulted in innovative legislation such as the creation of the Community Interest Company – a company form for social enterprises – and the launch of the Social Value Act, which requires officials to consider social and environmental impact when contracting for public services (effectively encouraging government procurement from social enterprises).
The UK is home to the world’s fastest growing social investment market, having pioneered new mechanisms to fund social enterprises, such as social impact bonds, and launched the world’s first social investment wholesaler, Big Society Capital. It also offers social investment tax relief to encourage investment in the sector.
Policymakers, social entrepreneurs and social investors in other countries are keen to learn from and, in some cases, replicate successful UK innovations.
Meanwhile, the UK sector is increasingly looking to grow overseas. The State of Social Enterprise Survey found that 14% of UK social enterprises exported or licensed overseas in 2015 and this proportion is expected to increase rapidly in coming years.
Overseas pension and insurance funds and high net worth investors are also increasingly investing in UK social investment funds. And some 30% of entrepreneurs going through the UK’s leading social technology incubators come from outside the UK.
The internationalisation of the social economy has also been fostered by the work of the Social Impact Investment Taskforce, launched during the UK’s presidency of the G8, as well as by initiatives such as the British Council’s Business and Investment Readiness programme and DfID’s Impact Programme which export, respectively, social economy expertise and investment readiness models to developing markets.
The British Council’s Mairi Mackay said, “This strategy provides a fabulous opportunity to create new alliances of organisations and individuals determined to turn problems into opportunities and reduce inequalities. Global trade, investment and business activity are our most powerful drivers of economic opportunity, poverty reduction and social change. Our ambition is to draw upon social enterprise and social investment in order to build a fairer and more sustainable economy for the 21st century.”
