February 1, 2017
Last updated on February 27, 2018
Social Traders’ Managing Director David Brookes on the burgeoning role for social enterprise in creating a more balanced economy in the midst of a rising tide of anti-globalisation, Brexit and America First.
As we embark on another new year, it has struck me in recent months how much Australians focus, follow and comment on economic and political developments around the world.
In late November last year at the Social Enterprise Awards event in Melbourne, I threw in my contribution attributing the Brexit referendum in the UK and the US presidential election of Donald Trump to some fundamental cultural changes underway where the merits of globalisation, economic reform and trade liberalisation are being seriously challenged.
I conjectured that while the Australian economy may have fared reasonably well compared with the economies of other countries over the last 10 years – maintaining positive economic growth rates through the GFC and strong aggregate employment growth levels – there are clear signs of growing disaffection and disengagement amongst sections of our communities. We know that Australia’s economic growth over the last three decades has not treated all of us equally, coinciding with industry restructuring, factory downsizing and closures along with the progressive shift to a more service based, digital economy.. Many of our postcodes in metropolitan, regional and rural settings are grappling with persistent unemployment of over 20, sometimes 25 percent.
Recent research by Ipsos examining the global rise of populism painted a global picture of widespread resentment of the rich and powerful, distrust of traditional politics and pessimism. Dissatisfaction amongst Australians surveyed is very much in line with global sentiment, with over two-thirds (68%) believing “the economy is rigged to the advantage of the rich and powerful”.
On 16th January, Oxfam released a Briefing Paper on An Economy for the 99% coinciding with the World Economic Forum in Davos highlighting that “since 2015, the richest 1% own more wealth than the rest of the planet”. Growing levels of inequality is challenging the status quo – it is challenging political, business and community leaders to find ways of building a more positive, balanced alternative society and economy
Despite the enormous economic and wealth generation contribution of the corporate sector, trust in business continues to fall. The Better Business, Better World Report also released in the past month by the Business and Sustainable Development Commission points to the need for 600 million new jobs over the next 15 years to match growth in the global workforce. It suggests “a new social contract between business, government and society is essential to defining the role of business in a new, fairer economy”.
In his Farewell Address on 10th January, Barack Obama spoke about inequality with too many families in inner cities and in rural counties across the US having been left behind. He also spoke of forging a new social in a new economy that creates opportunity for all people.
I have no doubt that the ongoing changing dynamics of developed economies like the US, UK and here in Australia will see an increasingly important role for social enterprise over the next decade.
For Australia specifically, now is the time to be taking more deliberate steps to minimise these adverse inequality spin-offs from broader economic growth.
We are already seeing the not-for-profit community services sector moving toward more entrepreneurial approaches to achieve greater levels of scale and financial security, while for profit businesses have become increasingly focused on their social and environmental responsibilities. This convergence is resulting in the growth of innovative, hybrid organisations. “Social enterprise” is being increasingly recognised as a key player in the shift of businesses that are being increasingly driven by purpose.
Across Australia, social enterprises are coming up with effective solutions to address growing and persistent levels of disadvantage and exclusion from mainstream employment and access to vital services. Some of these are showcased via the Social Enterprise Awards. Yet more needs to be done to realise the potential of social enterprise as part of a more responsive, adaptable and inclusive economy.
Social enterprise needs to be incorporated into the economic growth and innovation policies of our national and state governments. The Scottish Government is leading the way internationally with the recent launch of a ten year Social Enterprise Strategy 2016-26 And here in Australia, the Victorian State Government is leading the pack, having made positive steps over the last 12 months, looking at ways it can best support social enterprise as part of Victoria’s inclusive growth strategies. The first state-wide Social Enterprise Strategy for Victoria is expected to be released in the coming weeks.
In June, Social Traders plans to once again bring practitioners, policy makers and impact investors from around Australia to join the annual Social Enterprise Masters conference. This provides a valuable platform to collectively discuss the current and future opportunities of building a stronger social enterprise sector, contributing to an economy that provides opportunities for more and leaves fewer behind.
And in September, the global social enterprise movement comes back to our part of the world. The Social Enterprise World Forum 2017 will be held in Christchurch, New Zealand. Australians have the chance to join leaders from around the globe to share best in class social enterprise policy and practice.
With a backdrop of growing disillusionment towards traditional government macroeconomic policies and business profit maximisation, it’s time to recalibrate our model to enable greater access and participation that achieves improved economic and social outcomes.
2017 is the year for social enterprise to shine.
Written by David Brookes, Managing Director, Social Traders