International Economics

Can Social Enterprises Respond to the Global Crisis and Pave the Way to a Better Future?

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Aksel Ersoy

 

Today, there is a growing interest in how to develop a fairer and more sustainable way of doing business both in public and private sectors. As it is commonly agreed, I also believe that social enterprises is at the heart of rebuilding the financial system, the critically interlinked housing supply, transforming public services or helping the casualties of recession. In the UK, social enterprises operate in a very wide area. Social businesses, the NHS and social care, waste and cycling, citizen organisations, charities, on TV, environmental action groups, schools and communities are only few of examples. Beside the UK, other developed and developing countries have also started to consider the importance of social enterprises in their policy agenda recently. Nobel prize-winner Muhammed Yunus, founder of the Grameen Bank in Bangladesh, a bank which – unlike most mainstream financial institutions – is one of the best examples of the concept’s getting an international phenomenon. His work is very inspiring because he clearly identifies the distinction between social businesses and “anti-social” businesses. His range of Grameen companies, for example, showcases an alternative social economy in healthcare, telecoms and recently in a partnership with diary products company Danone to produce vitamin – fortified yoghurt. It is claimed that, under the terms of agreement, Danone can recover its capital investment but no profit; in return it gets market penetration and credibility. Social impact, therefore, can be a key broad value, a differentiator in the market place.

 

Social enterprises, as I mentioned earlier, has widely been accepted as a policy idea by the politicians in the UK. Last November, the Prime Minister, Gordon Brown, said: “I believe that this financial crisis is teaching us a very important lesson about the values that underpin the marketplace for the future. While we have free markets… we shouldn’t have value – free markets, markets should be underpinned by social purpose.” The Cabinet Office Minister, Liam Bryne, told the participants at the Voice09 social enterprise coalition conference, which I also attended, in Birmingham that he wanted to see more social business. To reach this target, ministries will call on local authorities and NHS primary care trusts to commission more services from social enterprises. The government’s public service delivery plan, expected in March, is likely to reveal further details of the proposals.

 

 

To make the long story short, I conclude my starting point by confirming, yes, social enterprises can respond to the global crisis as long as it is considered as an integral part of the government’s recovery plan and it is supported in the overall business agenda. As the Prime Minister, Gordon Brown, mentioned, if we want to create a sustainable economy that is committed at its very core to the wellbeing of its citizens and the environment, we ought to integrate social purpose to the market.

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