SEWF 2017: How governments can help social enterprises grow

The goals of social enterprise - such as creating stronger communities and better access to services for marginalised groups of people - make it an ideal partner for governments to improve their countries.

The partnership between governments and social enterprises across the world was one of the themes that delegates explored at the Social Enterprise World Forum 2017, held at the end of September in New Zealand.

Speaking at the forum, Scotland’s communities minister, Angela Constance (pictured top), said: “Social entrepreneurs the world over are driven by a passion to serve their community and create a more inclusive, fair world.”

She added: “Social enterprise makes democracies more alive. It can turn around prospects for communities.”

Five panelists led a session focusing on government as a partner to social enterprise. Joining Angela Constance were Alfred Ngaro, New Zealand’s minister for the community and voluntary sector, Corrine Baggley, of the Canadian government, Indonesia’s deputy minister of economic affairs, Leonard Tampubolon, and Bangladesh minister for finance, MA Mannan.

They said that governments could investigate barriers, improve regulations and create opportunities that might not otherwise exist, such as facilitating trade agreements and offshore opportunities, or altering taxation.

However, common challenges were raised by all five panelists. These centred around finance, working with communities, instruction, and measuring impact.

Social enterprise makes democracies more alive. It can turn around prospects for communities

The speakers discussed the fact that for social enterprise to be most effective, it needed to pioneer business models that addressed the areas where traditional charities and government efforts had failed to work. This was an exercise in experimentation, to find out what was feasible. Small startups required funding to test these new ideas. Governments could therefore provide grants and better tax structures to allow these startups to thrive. To minimise bureaucracy and risk alike, the panelists suggested diverse, small funds rather than large grants that put greater accountability on the governing bodies (thus de-incentivising innovation).

The panelists highlighted that social enterprise put community at the forefront, whereas state governments didn’t have eyes at the local level. To work better with communities, Corinne Baggley, director of social policy in the Community Development and Homelessness Partnerships Directorate in Canada’s employment department, suggested that local governments should have more of an input. She spoke about solving labour market problems that disproportionately affected young people, women, and people with disabilities by putting social benefit clauses into government contracts (a model that has already been developed in some places, including England).

Governments needed to put services in place to help entrepreneurs navigate the legal and financial systems associated with starting a business, they said. For the social enterprise sector to become mainstream, it could not be driven by passion alone, but by developing architectures that were accessible and taught. Indonesia’s deputy minister of economic affairs, Leonard Tampubolon, added that providing relevant vocational training would be transformative.

Finally, governments could help address the challenge of measuring impact, said the panelists. Alfred Ngaro emphasised focussing on “values core to what we’re trying to achieve”. He explained that to give grounding to these values, all government departments should use data and analyse outcomes at the aggregate level, which could track the impact of social enterprises in a way individual business could not.

Tampubolon said that sound evidence was useful in determining which economic strategies were already working effectively with social enterprises, and provide an opportunity to learn from other systems.

Baggley talked about the change brought about by Canadian prime minister Justin Trudeau’s 2015 mandate letters which outlined Trudeau’s policy objectives. His approach focused heavily on social objectives and led to the development of a Social Innovation and Social Finance Strategy Steering Group which Baggley called a “great political commitment”. Similar to the UN’s 2030 Agenda for Sustainable Development, this top-down approach was powerful in defining values and measures of success.

In another session, there was an apt summary from one speaker of why a partnership between government and social enterprise was necessary.

“The more we can influence policymakers to make policy change, the better. Government raises the floor of what is possible, and business raises the ceiling.” In a society that too often seems to be a race to the bottom, we need a baseline that encourages both sectors to have social and economic outcomes reinforcing one another.

Rata Ingram worked with Pioneers Post as an intern during the Social Enterprise World Forum 2017. Pioneers Post is proud to be media partner to the event. To see all of our Social Enterprise World Forum coverage click here.