Can social enterprise really scale?
In this post, Sasha Afanasieva (October 2013 On Purpose Associate) contemplates the scaleability of social enterprises.
Last week I attended the Oxford Jam conference at the Old Fire Station in Oxford. Celebrating its fifth birthday this year, Oxford Jam is a one-of-a-kind event, with workshops and cabaret, social enterprise party games and bean-bag talks. As a fringe alternative to the increasingly formal and exclusive Skoll World Forum, Oxford Jam brings together the social enterprise community (if not family, for that’s what it feels like at Oxford Jam!) to address a multitude of issues ranging from tax policy and legal structures to logistics for reaching individuals living at the “bottom of the pyramid” to tips for team motivation.
While the days I spent in Oxford were very inspiring, throughout the conference I found myself wondering whether it is truly possible for social enterprises to scale. Here are some of my key takeaways on the subject:
1. The social enterprise sector remains quite fragmented
To an extent, Oxford Jam reflects the relatively fragmented nature of social enterprise, which may be seen more like a network of passionate individuals involved in multiple community-based initiatives or leading relatively early-stage ventures. According to the 2012 BIS Small Business Survey, there are 283,500 social enterprises in the UK (213,400 of which have no employees) and 56,000 micro businesses (which are businesses that have less than 10 employees). This leaves only 13,800 social enterprises (or just under 5% of the total) that have more than 10 employees. For me, one of the great appeals of the social enterprise movement is its start-up, innovative feel.
2. Scaling is possible
Oxford Jam also provided evidence of how social enterprise can scale — Divine Chocolate, Fairtrade, and Grameen are a few prime examples. The conference highlighted that the interaction between social enterprises and their “surrounding giants” (the corporate and the public service sectors) can help instigate social enterprise scaling.
From a corporate perspective, my current employer, Volans, hosted several Oxjam sessions looking at the potential of partnerships between social enterprises and Hewlett Packard, Danone, Ben & Jerry’s and Shell. It’s not easy to make the big guys listen. For example, Daniel Flynn (co-founder of Thankyou Group) shared the challenges he faced in trying to persuade an Australian supermarket duopoly to stock Thankyou’s products for 5 years — he finally succeeded in this task by obtaining 15-million hits in an online campaign and running a helicopter marketing ploy. It also often comes down to serendipity. For example, Mandar Apte from Shell’s GameChanger innovation team explained how his meeting with Bart Weetjens (from Apopo, an organisation that trains rats to detect explosives) led to him finding out that Shell, in fact, employs 800 people to uncover land mines!
On the public service side, I was astounded by the figures presented by Scott Darraugh from Social adVentures in a slightly adapted version of Who Wants to be a Millionaire (see photo). Unlike social enterprises, which have an average annual revenue of under £700,000, the ‘mutual enterprises’ that are currently spinning out of the public sector generate an average £18 million per year, with the largest turning over £130 million! While the sector is not huge — there are currently only 95 mutual enterprises — it is growing fast.
3. Much work remains to be done
There remains a long way to go, but large organisations (whether private or public) are becoming increasingly aware of the value in engaging with social enterprises — and many of them even escaped the Skoll World Forum for a little while and dropped by Oxford Jam to attend some of the dynamic sessions on offer!
