Resources  ·  Posted October 3, 2023

The Importance and Meaning of Social Enterprises: Creating Positive Change

In this blog we explore the meaning and goals of social enterprises, highlighting how they differentiate from traditional businesses and the significance they hold in addressing social and environmental issues.

I’ve spent the last 20 years working in communities across Scotland with social entrepreneurs who are at the front line of a seemingly endless stream of unexpected life-shocks and social and environmental challenges. These people and the social enterprises they run, offer a glimmer of hope in what can sometimes feel like a hopeless world. They often have lived experience of the issues they’re trying to address and are using their businesses to generate profit while doing their bit to make their communities healthier, kinder, safer places to live and work As we navigate a barrage of fast moving local and global events that none of us could have predicted, the importance and meaning of social enterprises in creating positive change has never been greater.

Eileen Inglis is an experienced entrepreneur support practitioner and creative collaborator who has spent two decades dedicated to fostering social change in Scotland and the UK. With a passion for building meaningful networks, she empowers social entrepreneurs and supports a diverse range of projects. Eileen’s deep understanding of social issues fuels her interest in entrepreneurship, creativity, community, mental health, and more.

What is a social enterprise?
Defining a social enterprise can be a challenge in itself, and many people get themselves tied up in knots around the nuances of legal structures and asset locks. Put simply, I understand the term “social enterprise” to mean any business that aims to make a profit while having a social or environmental impact. In the upper echelons of the business world, government and academia this is sometimes referred to as profit for purpose or having a “triple bottom line”. Social enterprises operate across the globe and across many sectors, from health and social care to food, education, green energy, the creative industries and sport. Many people who are running social enterprises don’t even realise that’s what they’re doing and would never describe themselves as a social entrepreneur. While private companies focus primarily on generating profits for shareholders, social enterprises make it their mission to deliver value to a broad range of stakeholders, including their employees, their communities, and the planet.

Social enterprises are important for a number of reasons:
1. They address gaps in services: Social enterprises often emerge because there are gaps in services within communities. This includes geographic communities and communities of interest like mental health, unemployment or food. They fill these gaps and provide products and services that traditional businesses may overlook due to low profitability or other constraints. By identifying these neglected areas, social enterprises can directly improve the lives of people who would otherwise have nowhere to turn.

2. They are hubs of creativity and innovation: Social enterprises continually come up with creative solutions to social and environmental problems and do so from a place of lived experience and deep understanding about the issues they’re addressing. For example, they might create their own internal sales channels and have access to unique marketing and insights that are only available to people who understand a particular challenge inside out. These innovations can have wide-reaching influence and lead to better living conditions, and increased well-being for communities.

3. They empower communities: Social enterprises empower communities as they’re often set up and run by the residents, who are usually best placed to solve their own challenges. They involve the wider community in decision making processes and provide social activities, volunteering and employment opportunities in places where these things are often limited. Setting up a social enterprise can give the founder an opportunity to turn their ideas into something that will provide them and others with a job while having a positive impact on the place where they live. This can be a significant learning experience that offers personal and professional development to individuals who might otherwise have had limited access to this type of opportunity. By focusing on working with and for local people, social enterprises can raise aspirations and strengthen the social fabric of the communities they operate in.

4. They champion environmental sustainability: Many social enterprises are committed to sustainable working practices. They prioritise eco-friendly production methods, reduce and divert waste, and promote responsible sourcing. They might share resources, like land, buildings, materials and machinery – cutting costs, reducing waste. This commitment to sustainability not only benefits the planet but also sets an example for other businesses.

5. They influence traditional business models: Social enterprises challenge the status quo and influence traditional business models. As they gain recognition and success, they encourage conventional businesses to adopt more responsible and ethical practices, ultimately leading to a positive ripple effect across different sectors and industries. It’s widely reported that many young people now only want to work for organisations that have purpose, kindness and care for people and planet as their core.

Social enterprises embody meaning:

1. Social impact: At the heart of every social enterprise is a commitment to creating positive social impact. Success is measured not only by profit levels, but also by the improvements they make in the lives of individuals and communities.

2. Ethical entrepreneurship: Social enterprises prove that ethical business practices can be profitable. I’m not going to lie, one of the biggest challenges for any social enterprise is financial sustainability.When your product or service is aimed at communities that often have low or no disposable income, you have to be creative about where the money comes from. But those that are successful demonstrate that profit and purpose are not mutually exclusive.

3. Collective responsibility: Finally, social enterprises highlight the interconnectedness of our world. They remind us that we all share responsibility for addressing social and environmental challenges.

To conclude…

In conclusion, I’d say that social enterprises are not just community businesses; they’re catalysts for change, and they challenge us to rethink the meaning and purpose of entrepreneurship. By prioritising social impact, ethical practices, and sustainability, social enterprises are reshaping industries, empowering communities, and inspiring us all to work toward a more equitable, inclusive, and sustainable future. As supporters, consumers and investors, we have the power to amplify their impact and contribute to driving the transformation our world so desperately needs.

Want to learn more about social enterprises?

Join us on October 11th & 12th to connect with Social Enterprises locally and Globally as part of SEWF23. Tickets and more info here.