Social Enterprise................
I have been considering the growing phenomena of social enterprise recently. There was a time things fitted neatly into private, public, charity, co-op and association/club but now we have, partly I thing due to the introduction of CIC, the addition of social enterprise. Not a charity, not a democratic organisation and not a for profit business. With this has come a flurry of modules, books, papers, conferences and consultants. But I’m worried.
I’m worried because for one I think many who have travelled this route do not realise what they have done, they do not realise they are creating an enterprise they cannot sell, cannot cash in on retirement. I think the general lack of trust in capitalism has seen this as a popular ‘alternative’ but I am concerned as to how alternative it actually is.
Let’s look at the differences (if any): a private enterprise needs customers, finance, people management and operational skills. Any profit made belongs to the owner and can be reinvested and capitalised or taken. Either way there is an increase in personal wealth. With a social enterprise there is a need for customers, finance, people management and operational skills. Any profit made belongs to the enterprise and there is no increase in personal wealth except for salary. Where I am stuck is that the first four are identical to private enterprise, customers, money, people, and organisation. Skills and knowledge developed in private sector is immediately transferable. The only difference is the founder has no increase in wealth linked to company success (beyond salary). What then do the text books, papers, consultant etc teach that is not already in the public domain?
What also do founders of social enterprise hope to achieve? If it is access to public money and access to public contracts – restricted to social enterprises – then fair enough – eyes wide open and all that. It is a way of leveraging money from the public purse – perhaps of offering better value for money than the public sector. However if these individuals imagine that they are somehow opting out of the pressures of business, of the need to aggressively pursue opportunities, to mange staff effectively and to balance the books they are mistaken. They are also mistaken if they think that their hard work and re-investment will result in ‘their’ company increasing their wealth.
I have been considering the growing phenomena of social enterprise recently. There was a time things fitted neatly into private, public, charity, co-op and association/club but now we have, partly I thing due to the introduction of CIC, the addition of social enterprise. Not a charity, not a democratic organisation and not a for profit business. With this has come a flurry of modules, books, papers, conferences and consultants. But I’m worried.
I’m worried because for one I think many who have travelled this route do not realise what they have done, they do not realise they are creating an enterprise they cannot sell, cannot cash in on retirement. I think the general lack of trust in capitalism has seen this as a popular ‘alternative’ but I am concerned as to how alternative it actually is.
Let’s look at the differences (if any): a private enterprise needs customers, finance, people management and operational skills. Any profit made belongs to the owner and can be reinvested and capitalised or taken. Either way there is an increase in personal wealth. With a social enterprise there is a need for customers, finance, people management and operational skills. Any profit made belongs to the enterprise and there is no increase in personal wealth except for salary. Where I am stuck is that the first four are identical to private enterprise, customers, money, people, and organisation. Skills and knowledge developed in private sector is immediately transferable. The only difference is the founder has no increase in wealth linked to company success (beyond salary). What then do the text books, papers, consultant etc teach that is not already in the public domain?
What also do founders of social enterprise hope to achieve? If it is access to public money and access to public contracts – restricted to social enterprises – then fair enough – eyes wide open and all that. It is a way of leveraging money from the public purse – perhaps of offering better value for money than the public sector. However if these individuals imagine that they are somehow opting out of the pressures of business, of the need to aggressively pursue opportunities, to mange staff effectively and to balance the books they are mistaken. They are also mistaken if they think that their hard work and re-investment will result in ‘their’ company increasing their wealth.
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