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Joining The Dots: Can Business Create Social Good?

April 18, 2016

Social enterprises are receiving increasing levels of interest from the media, the public and governments as an innovative approach to using the market to create social good.

Over the last five years the number of social enterprises entering the market has grown, with the recent Finding Australia’s Social Enterprise Sector 2016 (FASES 2016) research conducted with Social Traders, showing plenty of new entrants to the field since our last study in 2010.

Conducting focus groups across the country as part of the FASES 2016 research we also heard stories of social innovators creating new business models to meet the needs of their communities, and the migration of ‘corporate refugees’ from mainstream traditional business to social enterprise as they searched for greater meaning in their careers.

Social enterprise is not new; Australia has a highly enterprising not-for-profit sector and a long history of cooperative and mutual models of doing business.  As using business and trade as a vehicle for addressing unmet needs has gained greater public attention, so has the diversity of social enterprises. These businesses are most valuable where they truly respond to unmet needs and/or where they use market power to draw public attention to complex problems that need solutions.

Where public policy attention has been paid to social enterprises in Australia, the focus has been on their potential to deliver welfare services in new ways. Yet, since we started documenting social enterprise practice in 2010, we have seen Australian social enterprises work in and beyond welfare, meeting a wide range of unmet needs both in Australia and overseas. It is true that social enterprises emerge as governments restructure funding and push policy levers that encourage their growth. The advent of the National Disability Insurance Scheme is one example identified by our research participants as a new market opportunity that will result in the ‘manufacture’ of new social enterprises by government initiatives.

At the same time, social enterprises emerge unbidden by governments as motivated people respond to the needs of their communities or the issues that move them. From the rural community that buys out a local business rather than have the service disappear from their town, to workers restructuring businesses to save local jobs, to for-purpose businesses that ignite consumer support for environmental justice or fair trade, social enterprises are diverse in their origins, their purposes and their business models.

While there is no doubt that social enterprise is growing, the ecosystem that supports social enterprise development is in its infancy in Australia when compared to other countries.  Across the country, we see evidence of public policy and corporate sector support for developing social enterprise, from pilot investment programs to new commitments to purchasing from social enterprises (social procurement).

Yet, the landscape remains in many ways as piecemeal as it was observed to be by the late Mark Lyons and Andrew Passey earlier this century. The diversity of social enterprise in Australia is a reflection of the diverse human aspirations that constitute healthy civil society. While its autonomy from government is part of the value of social enterprise, a more coherent policy framework that supports the ecosystem for social enterprise development would go a long way to increasing the impacts of this part of the social economy.

Can business create social good? Social enterprises are showing us that they can. However, in the latest round of our national research, social entrepreneurs told us it’s time to join the dots if we want to see the new wave of social enterprises in Australia thrive.

Professor Jo Barraket, Director of CSI Swinburne.

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