Social Entrepreneurship And Its Impact In The Uk Commerce Essay

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In any analytical paper that deals with the academic and application components, definition of the concepts have always been challenging because of at least two reasons. On the one hand, it has to be easy for reference by policy makers when they want to draw from such references for policymaking and conversely academicians should be able to draw from the existing policies to formulate or refine the concepts. Moreover, the same concept could be applied to have different meanings in different countries as such concepts seldom have universally accepted definitions for the simple reason that they develop based on the unique socio-economic conditions of each country. This is especially true of the developed economies, say, as the US and the UK, where there is a tendency to draw parallels which may lead to erroneous conclusions.

The objective of this Paper is to approach the concept of 'Social Entrepreneurship' with specific reference to the UK, by eschewing all the pitfalls referred to above. This research Paper through its analysis would strive to amplify on the following to the growing body of research:

Provide Comprehensive definitions of social enterprise and social entrepreneurism; (for instance the difference between philanthropy, social enterprises, and entrepreneurship).

The barriers faced by them and affect of such barriers in their growth and sustenance

How they contrast from the US model and their Impact on UK.

The Paper is structured as follows: The second section would start with an encapsulation of the dimensions of social enterprise; Section 3 would follow it with a literature review; Section 4 would contrast it with what is in practice in the US, and once it is clear what could constitute as social entrepreneurship with specific reference to UK then in Section 5, the Paper would proceed to assess the impact with specific reference to some of the initiatives. Section 6 would conclude the Paper by surveying what has been accomplished from what were the objectives of it.

2: Dimensions of Social Entrepreneurship:

Social entrepreneurship has always been in existence in one form or another for ages together and it being a dynamic concept, the format has been continuously changing over a period of time and what finds one today might look different from what was prevalent some time back. They have been always associated with individual leaders and or social groups which have put the social objective above the bottom-line considerations. Starting from Florence Nightingale of the past era and running to Muhammad Yunus these days, their role as public change agents has been highly significant. However, what distinguishes the present from the past is that there numbers have substantially increased. A survey conducted by Harding and Cowling in 2004 confirms this fact that in the UK, the present number of socially driven entrepreneurs are much larger than what it was at any point of time in the history.

If for a moment one transpose the word social entrepreneurship with socially minded, it could be seen that there are not only a considerable amount of social entrepreneurs but also individuals who render their services to such socially inclined organisations. In furtherance of it evidence is available in the research, (for e.g., Solomon & Anheier, 1999) who had brought out that at least in respect of the developed countries, the employment rates in the social sectors have been significantly higher than what is obtaining in business sectors.

2.1: General definitions:

For the purposes of conceptual clarity, it is necessary to distinguish between philanthropies on the one hand and social enterprises and entrepreneurship on the one hand. While philanthropy can be considered and distinguished as and by the desire of the successful entrepreneurs (who need not be social entrepreneurs) to give back to the society, social enterprises set before them value based operational and organisational goals which the social entrepreneurs set to achieve through their unique actions not only to succeed but also grow further. Over a period, the definitional wedge between social enterprises and entrepreneurship has also narrowed down. This definition has become more inclusive in the sense that it has been found in the recent practices that "for profit" social businesses deliver value equally well as "not profit" businesses.

Again considered from a broader perspective, Social Enterprise, according to Ray Baton (2003), can said to prevail in an organisation, if the people working there are business like but the 'main objective of the business is not making money'. They have to be business like because in no other way that the achievement of the business targets could be measured and since these organisations function as non-profit entities, they are not drive by monetary targets. The culture in such enterprises is more socially attuned than economically driven. More about definitions would be dealt in the literature review section.

3: Literature Review:

The term 'social entrepreneurship' is commonly applied to refer to' a range of organisations and activities that comprises of grassroots campaigns to the social actions of trans-national corporations' (Nicholls, A, & Opal, C, 2005). Dees, J.G. (1998) opines that 'it combines the passion of a social mission with an image of business-like discipline, and innovation'.( However this paper does not agree with his comparison of the determination of high-tech pioneers of Silicon Valley because of the dot com(.) burst associated with many of considered as high-techs pioneers. They are business like because their actions resemble any other business leaders engaged in the non-social sectors, say, in their risk profile, with the only difference that they add social values to such business like decisions and are innovators due to their inherent nature of seeking innovative solutions to social problems. Social entrepreneurship, as a result, could be conceived as a third element-connecting element of two elements, viz., and non-profit activism with corporate social innovation. (Kanter, 1999) It is a continuum because that there lies in it a range of 'not-for-profit' organisations from fully grant-aided to those that are partially self-sufficient having some income of its own. In the next strata, there are social enterprises which are near self-sufficient achieving such a status either through the exploitation of profit making opportunities in their core activities or obtaining funding because of their distinctive business models and finally the continuum is filled by those corporate who take up such activities as a mission to fulfil Corporate Social Responsibilities (CSR)

On the question as to what constitutes the social enterprises of the UK economy, there is no consensus as opposing views and approaches emerge from the literature. Research scholars such as Pearce, (2003), Drayton (2005), equate it with a social movement, while others like Michael, (2006) view it as a sector of business, like any other sector, that delivers social projects through traditional market mechanisms. Between them, there are organisations within co-operatives, charities and voluntary community organisations (VCOs) that can be considered as social enterprises.

If one were to go by the official thinking, it can be clearly seen that the UK Government encourages voluntary community organisations as a genuine arm of this sector, for in the country, 'community group and social enterprise ethos is rooted in their social capital and local-level involvement (Spear, 2001). It can also be said without doubts that non-profit organisations would constitute part of social enterprises and hence organisations like Oxfam would fall into such a category (Dym & Huston, 2005). Other institutional agencies as National Health Service can be said to offer a lending hand to the growth of social sectors by having arrangements through public-private partnership thus realising the synergies for the common good. They provide the potential income sources for the social enterprises as a return for which they get more visibility in community level engagements in improving the delivery and assessing the impact of their services.

It can be concluded that no watertight definitional compartments could be drawn in marking their boundaries of what the actual definition stands for.

For the purposes of this Paper to measure the impact of social entrepreneurship on the UK in a concrete manner, the ensuing working definition can be taken.) Social entrepreneurship, then, is all that which covers the social enterprises which are professional, innovative, and sustainable, may, or not have profit as the motive, but, even in such profit making activities, ethical issues are given utmost importance and social impact is given primacy.

4: The Concept as prevalent in the USA;

There is a paradigm shift in the way the concept is used in the USA. There is no discussion of issues like profit, non-profit but it is more aligned to corporate social responsibility in the major part of the literature. In other words, social entrepreneurship does not appear to have an independent existence of its own. What is being discussed in the literature relates to what can be termed as 'Corporate Social Entrepreneurship (CSE). It is more related to the Schumpeter's model who had seen entrepreneur 'as an agent of change within the larger economy' Successful entrepreneurship according to him ' sets off a chain reaction, encouraging other entrepreneurs to iterate upon and ultimately propagate the innovation to the point of "creative destruction", a state at which the new venture and all its related ventures effectively render existing products, services and business models obsolete.( J.A. Schumpeter, 1975) or to that Drucker P (1995), who On the other hand, saw it not as agents of change but exploiters of change. To him it is epitomised in the employers always searching for change, responding to it, and exploiting it as an opportunity. Such entrepreneurs are considered innovators of new methods of doing business, exploiters of opportunities, possessing the capability and drive to pursue them systematically in a determined manner, by taking and withstanding the risks associated with such ventures.

What has emerged in the USA is a term Social economy which is used in an interchangeable manner with Social entrepreneurship. Both the private and public sectors are bundled together in them and the term is defined to equate 'the provisions of services to its members or to a wider community and not serve as a tool in the services of capital investment'. Profits, in this sense, is regarded as a surplus which is a means in the provision of such services and as such does not constitute the main driving force behind the economic activity (Defourny, et al, 2000).

However, a wider part of literature only speaks of Corporate Social Reasonability or what is termed as 'Corporate Social Entrepreneurship.'Thus the concept is defined through its characteristics summed up below as represented in the document referred to:

"Previous research (Austin, Leonard, et al, 2005) has identified some defining characteristics of CSIntrapreneurs. They are internal champions, continuously advocating for the integration of social and business value as a central tenet for the company. They are good communicators, particularly articulate about the rationale and importance of the transformation. They are also active listeners to various stakeholders and are able to speak to these groups in ways that reveal how the social action is relevant to their needs and interests. They are creators of innovative solutions, new resource configurations, actions, and relationships. They are not managers of the status quo, but creators of a new, sometimes disruptive one. They are catalysts for change, who inspire and create synergies in the work of others. They are coordinators, able effectively to reach across internal and external boundaries, mobilizing and aligning interests and incentives. They are perceived as useful contributors who support the success of others. Rather than being perceived as building a new power centre, Corporate Social Intraprenuers are team players who enable other groups. Finally, they are shrewd calculators. Cognizant of the realities of the corporate environment, they are cost conscious and mindful of the bottom line. Change is not framed in terms of ideals or intentions, but in terms of aligned incentives. Plus, as organizational change agents, they need to be able to assess how far and fast they can move the transformational process within the realities of the organization" (Austin, J, 2009, referred to in the footnote)

On a consideration of the foregoing, it can be stated in clear terms that about the US, a clear and distinct concept of Social Entrepreneurship does not seem to have emerged. Most of the researchers seem to be revolving around more on the characteristics of business leaders rather than the distinct features that separate social entrepreneurships and social enterprises.

This could be the reason the literature talks more of some of the contemporary entrepreneurs as Steve Jobs and Steve Wozmak of Apple Computers, C, Fred Smith of FedEx, and in the context of the online business, Pierre Omidyar & Jeff Skoll of eBay than social enterprises.

It can also be seen that it would be futile to talk about social enterprises in the US context without a reference to bottom-line.

5: Impact of Social Entrepreneurship in the UK:

It may be appropriate to note in this regard the research on the Social Entrepreneurship is also referred to as third sector research and wherever it is used in this context, it can be construed to apply to social entrepreneurship. According to those who support this school of thought, 'there is no single economic theory that would wholly apply to this sector and the impact could differ depending upon the sector to which such an analysis is applied. As a result, it would be difficult to establish one to one correspondence between the growths of social enterprises with macro economic factors as GDP. It would rather be more prudent to assess their impact from a micro economic angle within which quantitative figures as growth in employment could be provided. For instance, there are number of surveys which attest to the fact of the growth of social enterprises and their providing increasing levels of employment. A community Enterprise Survey in Strathclyde (1997) estimated that 3700 community enterprises providing employment to more than 42,000 persons (in addition more than 60,000 volunteers) with an estimated turnover GBP one Billion. (It may be appropriate to note at this stage that UK does not make a distinction between community and social enterprises). The New Economics Foundation (NEF) had estimated the employment of about 1.5 million people in the social enterprises. What may be of more important is the fact that Social Enterprises have reported to be more competent in creating cost effective jobs.

However, at this stage one might have to digress from this employment centred approach as it is pointed by other scholars (for instance Evans, 2001) that job creation is not the primary aim of social enterprises and their contributions go beyond it and in creating a community economy. A community economy focuses on improving the effectiveness of all forms of work, whether paid/unpaid, which promotes various forms of constructive activity in which local people of any employment status are willing to engage (Chanan, 1999).

By adopting the criteria that has been mentioned in the paper that ' Social entrepreneurship, then, is all that which covers the social enterprises which are professional, innovative, and sustainable, may, or not have profit as the motive, but, even in such profit making activities, ethical issues are given utmost importance and social impact is given primacy' it may be much more productive to assess some of the social impact of them which would be more qualitative rather than quantitative in nature. Some of them are mentioned below.

It has been instrumental in the provision of motivation to the local work-force in enabling them secure or get back to work, and creation of skills particularly through vocational training (Pearce, 1993) He had provided a set of parameters as listed below which he calls as the positive contributions of social enterprises. They in particular have been responsible for the:

Creation and management of the workspace

Being the developer of a range of properties

Running of training programmes targeted at the local population

Provision of vocational skills; Creation of jobs for those who have been unemployed for lengthier periods.

Provision of care services, thus, lending a positive hand to the delivery of health care services within the framework of National Health Services (NHS).

Provision of social housing; Low cost loans to make economic ventures more viable.

If social enterprises are taken to constitute community businesses/development trusts, credit unions, social firm , workers and other types of co-operatives, then it can be stated with a certain amount of confidence ,that they have positively influenced in the creation of jobs, enhancing the skills of workable population through impartation of training, provision of goods and services which are not normally considered to be the area of public participation or market oriented enterprises, provision of low cost financing to fund businesses, creating of the physical assets, and above all involving the community through following an inclusive approach and reducing social exclusions.

6: Conclusions:

The objective of this Paper was to analyse the evolvement of Social Enterprises and its impact on the UK.

In quest towards achieving this objective, after framing the initial setting, the Paper first dwelt on the origin and understanding of the term in a common language. From there it had proceeded towards the conduct of a literature review to survey the views of researchers and scholars with specific reference to UK, to understand differing perceptions of them and arrive at a workable definition which could be used in furtherance of the research objectives.

It also looked at the way the concept has evolved in the USA and to see whether any synergies are available between the two countries. Having clearly pinpointed the stark differences the way they are perceived and applied in respective countries, it had proceeded to an analysis of the impact of this sector on the UK. Therein, it had noted some of the practical difficulties involved in measuring their impact in terms quantitative macro economic variables and as a result narrowed its analysis to micro level factors and qualitative factors. In other words, the economic impact assessment was very restricted in nature and a larger discussion took place on the social impact.

The Paper throughout had followed the existing literature in the field in the formulation and creation of original thinking. Given the fact that throughout one has to focus on critical areas of the subject, only most important issues were analysed and hence questions as to whether it would apply to Policing/army or educational institutions etc were not directly discussed. However, by implications it could be stated that they do have a role to play wherever the welfare of the community is involved. If one strictly applies this concept, it is doubtful whether it could be extended to army but to Police the answer can be in affirmative, for, community based exercises have found to promote relations between the Police and in particular ethnic minorities. About the educational institutions, it is a firm yes. The conditional element here is that it is taken not in the conventional forms of education. Social enterprises have been contributing to skill enhancement and have been playing a more important role in vocational education wherein the aim has been to create employment opportunities. By encouraging voluntary community participation, it had also demonstrated that they need not always be centred around paid employment only and better service care deliveries especially with NHS could be achieved through public-private initiatives.

While it may not be possible to deal at length the innumerable challenges faced by Social enterprises and entrepreneurship in the UK, few of them could be mentioned. According to Social Enterprise, London (SEL) they centre around in the (a) better understanding of public policy makers, the financial institutions and the community themselves of an understanding of a fundamental understanding of what social enterprises are about, (b) improving the networking facilities, (c) getting hand on help in the whole range of application services, as in fulfilling statutory requirements in applications for funding, business planning and execution of strategies, induction of management skills etc.,

This Paper can be concluded by mentioning what is perceived to constitute a make and break factor of such enterprises as recorded by Social Enterprises London (SEL, 2001). "The social enterprises have both much in common as well differ more from the other small businesses. In terms of their infrastructural support they are similar to small businesses but the difference comes in terms of financial, marketing, and management issues. These differences are estimated to constitute about 20% from the traditional enterprise which recited as the causes of their make or break factor'.