After 30 years at Allia, Martin Clark has seen the social enterprise sector evolve from an emerging movement into an established part of the UK business landscape. As he prepares to retire as CEO of Allia Impact, he reflects on how far social enterprise has come, where it has fallen short, and why the next generation of mission-led businesses gives him hope for what comes next.
I’m going to take a long view on social enterprise…
I can do this because I’ve been working on it since it started, or at least, since it started being called ‘the social enterprise sector’ in earnest in the late 90s.
The first publication I remember was Charlie Leadbeater’s 1997 Demos paper The Rise of the Social Entrepreneur, which talked about these intriguing people who used business principles to achieve social impact in different contexts, though it wasn’t really about social enterprise per se.
Allia before ‘social enterprise’
Allia was at the time a think tank idea, under the name Citylife, with a vision of creating a financial product that enabled people to invest in their own cities and communities to create local jobs and start-ups.
The resulting Employment Bond or Charitable Bond was intended as a self-sustaining annual programme, enabling residents and businesses to lend money securely and interest-free for five years, with part of the capital invested in social housing construction and the future interest on that loan going into business start-up and job creation. Each bond issue’s costs were to come out of the bond proceeds.
So we were actually a social enterprise working on a crowdfunded social investment, before anyone was using any of those terms. (And we didn’t realise this ourselves, of course!)
Once we heard the term and recognised ourselves as a social enterprise – legally a Community Benefit Society, or in those days the old-fashioned sounding Industrial and Provident Society – we were excited about being part of what felt like an insurgent movement with huge potential.
Surely we were the future: operating like a business, but seeking only to make a positive difference, not a personal profit.
The fact that our model wasn’t self-sufficient in practice was felt to be only a temporary blip!
The social enterprise movement takes off
Then the social enterprise ‘movement’ really started to take off in the early 2000s, with Blair’s government feeling it was a way to combine business and community goals.
We even got some funding from the old Office of the Deputy Prime Minister, for those of us old enough to remember when Blair created a special department to keep John Prescott happy.
Then came an opportunity that would define our future direction.
In our research for various city bonds, we had seen a mix of inspiring business incubators and ambitious social enterprises and wanted to create the first high-profile home for them in Cambridge.
So, in 2003, we had the vision for a social enterprise incubator in Cambridge.
Cutting a long and twisty story short, property ended up being our route to sustainability, as the bonds proved hard to launch in some locations and were then killed off by the 2008 credit crunch.
By 2013, we had 100,000 sq ft of space under management, both meanwhile and permanent.
And we’ve since run hundreds of programmes supporting thousands of founders and early-stage social and environmental ventures, as well as many regular local businesses that are creating jobs and community benefits.
So, has social enterprise fulfilled its potential?
Is there more to come?
My view is that social enterprise, in its more narrowly defined sense, hasn’t achieved its full potential. Twenty-five years on, we should have been further ahead than we are, collectively.
But setting up, sustaining and growing a successful social enterprise is really hard. You have two or three bottom lines, financial, social and environmental, and there isn’t always the support, finance and understanding needed.
The sector still isn’t properly understood or adequately supported by government.
And we can’t just focus on purist models, such as CICs and co-ops. There are too few of them, and they are constrained.
Reasons to be optimistic
There are positive signs, however.
The numbers of mission-led businesses are definitely growing. Our recent research with Beauhurst, The Impact Business Tipping Point: A Census of the UK’s Mission-Led Business Landscape, identified 151,497 mission-led businesses across the UK, giving us a much clearer picture of the scale of this growing part of the economy.
And we’re building on that momentum through Business for Impact, our new national community connecting founders, businesses and organisations committed to creating positive social and economic impact.
We’re hoping the next wave of growth will be broader, across the whole spectrum of business and business-like organisations.
Those younger social entrepreneurs who are ambitious and capable of harnessing AI, whilst staying grounded and connected, give me hope that the social and impact business sector can yet rise to the challenges we face as a world today.