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How Does Social Enterprise Help Build a Social Economy?

Posted in: Blog.

a group of diverse people celebrating

Now that we’ve had the chance to reflect on this year’s Social Enterprise Policy & Practice Conference, it’s clear to us that there is a great amount of passion in the Social Enterprise sector for building a more inclusive economy in Scotland.

Social Enterprise does, and will continue to, play a huge role in creating a democratic, inclusive economy that empowers people and communities to take ownership of the economy as part of the wider community wealth building agenda. But how?

Closing the Wealth Gap

Anyone that’s even been remotely paying attention to the news can clearly see that the gap between rich and poor is colossal. For years now poverty has slowly been rising in Scotland, and this is something that will only be exacerbated in the wake of the current cost of living crisis.

Whilst the threat of COVID-19 takes a back seat as the population focuses on keeping homes warm and food on the table, there is a lot to be said for how community wealth building can help communities take control of their economy and the destinies of their citizens.

Community led and social enterprises, particularly in rural areas, have historically stepped in to relieve pressures on their local communities where public policy and private enterprise have been slow to react. The earlier mention of COVID is no mere attempt to underline the current crisis we’re facing – it also serves to reminds us how rural communities stepped up during the pandemic to take care of those that live there.

Such resilience is a testament to the drive that many communities must keep things going even when times are hard. Powered by people and business that operate within those communities, it is a great example of how community led and social enterprises are helping to build an inclusive economy that services the specific needs of those that matter most – the people that live and work within these areas.

But how does this close the wealth gap? Quite simply, by harnessing the wealth of those that live locally, it means that wealth created within local economies recirculates within them instead of being sent into the coffers of distant shareholders, far removed from local concerns.

Even Distribution of Wealth

An inclusive economy wants to see wealth distributed more evenly – often multinationals will come in and take over big contracts in rural areas without knowing much about the communities. Whilst these are cheaper options and do have their place, the impact of community anchors winning and delivering contracts can and does save money in many other ways. Such as in North Ayrshire, where CEIS Ayrshire is a community anchor organisation operating in a local authority region that is openly embracing community wealth building.

By being part of a circular economy, it means that money will be reinvested in the local community and be poured into other areas of need. A great example of this is in rural areas where jobs are plentiful, but housing is not. In an inclusive economy, money can be directed to areas such as housing in order to solve specific, local and localised problems.

The Social Enterprise Census tells us that community led businesses make up a large proportion of the social enterprises operating in Scotland. The majority of these are small, collectively led and community focused, addressing market failure and/or providing essential services.

There Is Still a Long Way to Go

Social enterprise has come on leaps and bounds in recent years in building the path towards an inclusive economy, but we still have some way to go. Policy in this area is largely reactive and not proactive – communities will solve challenges as they appear, and it is only after the fact that local governments and policy must catch up to what they are doing.

Returning to the COVID pandemic for a second, this is a good example of the proactive nature of community led enterprises: they were out there getting things done, ensuring that people were safe, it was only afterwards that resources and measure were put in place by councils and the government to further support the businesses that were on the ground doing the work.

Great work is being accomplished and will continue to be accomplished on the path towards an inclusive economy, but the approach must be bottom up. We must listen to communities and address their needs and shape policy around them. We must create an infrastructure that allows this to happen at a local level and is not dictated as a blanket approach from above.

Social enterprises will be at the forefront of creating a strong inclusive economy by empowering people to take control and start their own businesses that help contribute to their communities. We just need the infrastructure there to support it.

After our recent conference, we’re confident that we can get there.

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