Social enterprises across Britain are thriving, outperforming small and medium-sized businesses (SMEs) in nearly every area from turnover growth to job creation.

A report released in September by the industry’s national body, Social Enterprise UK, showed that despite operating in a challenging economic environment and at a time of public sector austerity, 50 percent of enterprises made a profit in the preceding 12 months.

Government data shows there are now more than 60,000 social enterprises in the UK, employing around one million people and contributing £20bn to the economy.

Nick Temple, Deputy CEO of Social Enterprise UK, says he believes that 2016 will be an equally strong year for the industry, and shares some of the trends he believes will shape the sector in the year ahead.

More start-ups

“We’ve seen a growth in start-ups, which has been fairly consistent in the last six or seven years,” says Nick. “It’s a very dynamic space and I expect that to continue next year. In many cases, frankly, it is because the work market is quite tough. One reaction to that is to start your own business. It’s easier to do now because of new legal structures. But there is also a growth in people wanting meaning and purpose in their work. Some of that is driving change within big companies, but it’s also people saying ‘I want to do my own thing’.”

Education and health

“Start-ups are quite mixed in the areas they are setting up in. But we are seeing a huge growth across the education and health markets, with new social enterprises finding fresh approaches to old problems. For example, some of that involves technology and creating new facilities to help health care professionals liaise with patients more effectively. Start-ups are using technology in smart ways and the number of social enterprises introducing a new product or service in the last 12 months has increased to 59 percent. Among SMEs it has fallen to just 38 percent.”

Big business

“Big businesses are now starting to open up their supply chains and buy from social enterprises. We are noticing real traction with that now. We’ve been working with a couple of pioneers in construction firm Wates and pharmaceutical company Johnson&Johnson as part of our Buy Social campaign. Crucially from our perspective, the large corporations are beginning to set targets, which is ultimately what drives behaviour. For example, Wates are committed to spending £20bn by 2020 with social enterprises. Of course, some of it is old-fashioned business development and thinking that if they do this it will position them better in trying to win work.”

Community shares

“Local communities now have a huge amount of influence and I expect that attitude to grow across Britain in 2016. One of the fastest growing finance movements has been community shares – locals starting up or taking over pubs, shops, and even wind turbines. Communities can benefit from these types of schemes both socially and financially. Whereas once, these types of businesses might be bought up by big businesses or even wealthy oligarchs, we are now starting to see more communities taking things into their own hands. They will benefit from them for years to come.”

Global operators

“The proportion of social enterprises that export or licence products from abroad has grown to 14 percent. For over a third of these, international trade accounts for between 11 percent and 50 percent of their income. In addition, half of all UK’s social enterprises reported a profit in the 12 months up to September, with 41 percent creating jobs. That compares to just 22 percent of SMEs. Social enterprises working in the public sector are going to be facing a tough economic environment in 2016. But this has been a consistent theme in recent years and the evidence shows that the industry has continually overcome the challenges.”

To find out more about the work done by Social Enterprise UK, visit: www.socialenterprise.org.uk

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