Social enterprises generate the majority of their income through trade. But they reinvest most of their profits while having a clear social or environmental governing mission.
A 2014 report from the British Council and Social Enterprise UK (SEUK) revealed that 11% of UK social enterprise was trading or had franchised overseas. Does this suggest that thriving social enterprises can significantly contribute to the UK’s export market.
Is Local Going Global?
The conventional view of social enterprises is that they operate on a very local basis, so that they can promote local trade or empower local communities. However, the British Council and SEUK report shows this sector to be both dynamic and diverse as it reaches beyond the UK’s borders.
Other countries currently have better-known international players in the social enterprise sector, but the UK sector is ready to expand.
In the report, over half of the respondents were currently trading, or had traded overseas. Most of these are small, or very small, enterprises. They are a mix of Community Interest Companies (CICs), limited companies and charities.
The different sectors these enterprises work in are varied and difficult to classify in standard terms, however, they involve improving communities and supporting other organisations. Some create employment opportunities or affordable housing. Others focus on community-led social enterprises.
How do Social Enterprises Export?
Social enterprises use a variety of methods to export, often linking up with overseas partners to deliver their vision. A joint venture approach is popular, as are licensing and franchising.
The report suggests that there is an underlying confusion about what the best methods would be for this diverse sector. While the internet offers ready-made solutions, it has hindered the development of more innovative marketing solutions.
When it comes to export challenges, social enterprises face many similar obstacles to other businesses:
- access to local networks;
- finding customers and markets abroad;
- financial and cash-flow pressures;
- and understanding local regulatory issues.
Cultural barriers seem more of an issue for social enterprises but this is because they are so dependent on working alongside and within local cultures for their success.
As with other exporters, for social enterprises, building strong relationships is the key to making it work.
The report is illuminating in that it demonstrates that exporting can incorporate a wide variety of industries and services and that it can also accommodate clear social and ethical values.