Social enterprises boost UK economy by £24bn

Nearly one million people are employed by social enterprises, which contribute more than £24bn to the UK economy, according to a new report.

Social Enterprise UK’s State of Social Enterprise report, which was published yesterday reveals there are more than 70,000 businesses now operating in Britain.

The report also highlights how social enterprises are outperforming traditional small and medium-sized businesses (SMEs) in areas of diversity, start-up rates, innovation and pay.

According to the report, 41% of social enterprises are led by women with 51% having a majority female workforce, whereas mainstream SMEs have 20% women leadership.

And more than a third (34%) have BAME directors and 36% have a director with a disability, showing a sector more representative of society at large.

More than two thirds of social enterprises are supporting people from disadvantaged groups (69%) and four in ten are employing them.

Many are also driving growth at a local level with 79% of social enterprises recruiting over half their staff locally.

The findings also reveal that social enterprises can meet outperform mainstream SMEs in growth, innovation and start-up rates.

Almost half (47%) grew their turnover in the last year, compared with 34% of SMEs and 50% introduced a new product or service in the last twelve months.

This figure has fallen to 33% amongst traditional SMEs.

And a quarter of social enterprises are also under three years old, showing that more than ever businesses are being set up explicitly to meet social or environmental challenges.

Social enterprises are also paying fairly with 78% reporting paying the higher Living Wage, as established by the Living Wage foundation.

The report highlights the number of social enterprises in Plymouth, which became the UK’s first ‘Social Enterprise City’ in 2013.

According to the report, there are around 150 social enterprises in Plymouth working in education, health, arts, environment, food, finance, housing, business support, media, sport, social care and many more.

Together these businesses employ over 7,000 people and bring in a combined income of over £500 million.

The city is home to are mega-social enterprises such
 as Plymouth University – the first in the world to be recognised as a social enterprise and Livewell Southwest – one of the largest health and social care businesses in the UK.

‘Social enterprises show us what the future of business can look like,’ said Social Enterprise UK chair, Lord Victor Adebowale.

‘These are credible businesses, competing in the open market but set up in a way that addresses some of the biggest issues we face.

‘From homelessness and substance abuse to mental health and social care – social enterprises are working on the front-line creating opportunities and reducing inequalities,’ he added.

‘They are showing traditional businesses how social impact and profit can go hand in hand.

‘If we’re to meet the challenges and uncertainties of the coming years, we should look to the social enterprise model for inspiration and guidance on how we can create an economy that works for everyone.’