Are Social Enterprises the untapped answer to economic growth?

The holidays now a distant memory, but for Morrisons, Tesco and Marks & Spencer the ghost of Christmas Just Past has come back to haunt them.  The retailers announced disappointing sales figures this week.  Numbers can be stretched, massaged, and explained away, but when profits of several high street shops are down, it’s basically because we’re skint.

The Bank of England has just held interest rates, unemployment is falling, and we’re constantly being told the economy is recovering. But scratch beneath the surface, and we still have fewer pennies in our pockets.

Even companies which are doing well – Greggs announced 3.1% rise in quarterly profits – have announced redundancies, cutting 400 jobs and scrapping in-store bakeries in 79 branches. If even Greggs can’t sell a profitable pasty (taxed at 20%) and keep working mums in tabards, then something is wrong. The economy is not bouncing back, no matter how many times Osborne cares to regurgitate this untruth in the right wing press.

It is true that unemployment levels are falling; but this hides the real issue: underemployment. With nearly 1.5 million part time workers – mainly women on low wages – and many of those wanting full time positions, we are failing the employed. We need a people based approach to economic stimulus, not just one based on GDP. Perhaps it’s time we started looking in the mirror for job opportunities instead of in high street windows.

On December 7^th last year, Small Business Saturday was a huge hit on high streets across the country. That day I was shopping in Brixton when I met Colin Crooks, the founder of Tree Shepherd, an inspiring organisation that aims to tackle long term unemployment through social enterprise. By training and empowering people to start their own small businesses, Tree Shepherd social entrepreneurs transform their local communities into places of opportunity. Colin is Lambeth’s Social Entrepreneur in Residence, working closely with the council to further fairness of opportunity and drive job creation in the borough.

Social enterprise also means taking a wider view of the types of people offered employment opportunities. We are wasting a huge pool of talent by not engaging with the skills long term unemployed or “difficult to employ”. This is where social enterprise comes into its own and looks at the potential personal and social gain rather than solely a spreadsheet of profit and loss.

But data is necessary to understand just how big the problem of unemployment in the capital is. In 2012 joblessness in London was up more than 40% since 2007 and 25% of economically active young adults in London were unemployed. This compares with 20% for young adults in the rest of England.

Social enterprise may be the untapped answer to economic growth, but small social enterprise businesses need beneficial conditions to survive and thrive. With the right support they could be a powerful people focused solution to employment, innovation and profit. Councils could open up tendering and procurement to small, businesses and create a truly competitive market on a local level; red tape reduction and rebuilding BusinessLink would be a good start on a national level.

Only until we start to value the skills, hard work and aspirations of people will we truly see an economic upturn, formed in the hearts of our communities – not just creating jobs, but building social capital.