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"The role of social enterprise is to provide goods and services that address social issues in a sustainable way." Photograph: Alamy
"The role of social enterprise is to provide goods and services that address social issues in a sustainable way." Photograph: Alamy

Is the future role of social enterprise to foster compassionate capitalism?

This article is more than 9 years old
Our expert panel discuss the role of social enterprise in society, and the values of social business

There are many opinions about the role of social businesses in society. Some see them as a way for the private sector to fill gaps in public provision, while others consider their business a vehicle for social change. In our recent Q&A, experts debated the role of social enterprise in society. Here, we roundup their opinions.

Panel

Ceila Richardson – director, Social Economy Alliance

Johan Wendt – founder, Mattecentrum

Joshua Bridgens – consultant surgeon and founder, Leeds Paediatric Orthopaedics

Alex Swallow - chief executive, Small Charities Coalition

Hannah Catmur - founder, Get Out! Explorers

Stephen Bediako - founder and managing director, The Social Innovation Partnership

Cecilia Crossley - founder, from babies with love

Margaret Heffernan - lecturer, author and adviser

Are social or business values more important to social business?

Stephen Bediako: People play different roles depending on how they see the world. For social enterprises today I think it is important they pursue both ideals vigorously: delivering social good and generating a profit. It's the only way to survive.

Johan Wendt: Social enterprises need to focus on building a sustainable business. My perspective comes from the Scandinavian scene - I'd say the social entrepreneurs of 2014 need a strong business focus.

Cecilia Crossley: Bringing together differing interests applies in some social enterprise models: but in the case of from babies with love I think we simply add in an extra stakeholder. So more people win just by carrying out normal commercial transactions.

Hannah Catmur: Entrepreneurs create jobs, develop new products or services, but social entrepreneurs add a new dimension: they aim to solve social problems. Social enterprise brings competing and conflicting interests together to create a shared value where everybody can win.

Margaret Hefferman: Social mission is necessary but far from sufficient. I would say that the role of social enterprise is to provide goods and services that address social issues in a sustainable way - which means profitable enough to stay in business and grow.

What role should social enterprises play in the public sector?

Joshua Bridgens: Social enterprise is a good model for the NHS. In common with many people I'm uncomfortable with the concept of large multinationals managing healthcare for profit. Social enterprise seems a better solution, but only with the assurance that business rigour will remain as good.

Celia Richardson: We have broken markets in public services where harmful oligopolies have emerged. Plcs and private equity firms are not the right vehicles for some of the jobs they are being used to do. I think it is social enterprises' role to challenge and disrupt these markets. Social businesses thrive on market failure - it's part of our job to match the budding social enterprises with the markets where there is abundance for them and our movement.

Joshua Bridgens: Social enterprises offer greater opportunities for collaboration. Discussions with parents of the children I treat has shown that the one thing they would value most highly would be a greater opportunity for support from fellow parents. This is an area where social enterprises have great experience and would be well placed to help.

Should social enterprises do things for free?

Stephen Bediako: We need to get out of the mindset that we should get a helping hand. What do most businesses do when starting out? They partner up or find routes in via existing players - this is what social enterprises need to do. I would add that the government should definitely give some protection to social enterprises that is mutualising services to. The result can be the new mutual gets the service for a year or two only for bigger players to swoop in and take it. However, if you're growing your enterprise from scratch: get out and find partners.

Alex Swallow: This is definitely a current problem. The landscape is changing so fast that public perception isn't keeping up - so people outside the sector are getting confused about what's charitable, what isn't, and where they should give their support.

Is social business the future of private sector?

Celia Richardson: Absolutely - the World Economic Forum puts inequality at the top of its threats to global stability; along with climate change. We all rely on world markets for stability. The actors in them need to have a far more positive affect on societies, communities and the environment. I believe they're getting there. If you look at what Paul Polman from Unilever is saying, and at what Harvard Business School professors are saying, then this is the future.

Hannah Catmur: CSR has become a core business strategy. In the private sector in recent years, it is clear that corporate social responsibility has become less of a "buzzword" and thought to be something much more aligned with core business strategy.

Cecilia Crossley: More companies are embracing social and sustainable values. I heard the managing director of Jaguar Land Rover speak this week - about people chaining themselves to the factory gates in protest a few years ago and their resulting change in approach. This led to company investment in engineering and technical innovation to reduce environmental impacts. If a company like this can shift its strategy, there must be more to come.

Alex Swallow: I am never sure where I stand on wealthy business owners, driven mainly by profit, deciding to use their wealth for good. Bill Gates being an obvious example. Would Mr Gates have done more good for the world by running a social enterprise, or is it better that he has made billions through an entirely 'for profit' model and now has a huge amount of money to put into social projects?

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