Social enterprise is not a new idea; this kind of activity has been going on forever really. But there has been a growth of activity around social enterprise in recent years, and there are a few factors that are driving and enabling that to happen.
In terms of drivers, a lot of charitable organisations are experimenting with social enterprise to build their own resilience and continue their mission when there's less public resource to go around.
Also, there are a lot of problems that aren't going away - issues around poverty, housing, health and education - so there's a sense of looking for new opportunities to tackle these persistent problems, and on top of that we've got new problems, like climate change, that require new responses.
Also, at a community level people are wanting more self-determination to solve their own problems and provide for themselves to create public benefit. And then there's just a values shift, particularly amongst younger people who want to be entrepreneurial and innovative and direct that towards a common good.
In terms of enablers, new technology means it's never been easier to set up an enterprise and get things done. Increasingly we're also seeing the government, philanthropic and business sectors realising that more social enterprise is a good thing because once these enterprises can stand on their own two feet they don't require constant support. And then there are new capital markets forming around investments that specifically want to deliver a social return or change.
What are some of the different ways these enterprises deliver the social change they're after?
We tend to think in models around how the social impact is created. First is what I often call the 'Robin Hood' model, which is a social enterprise that has a traditional business but uses the profits generated from that to resource some other activities that lead to social change. Another is the 'one for one' model, like Toms Shoes. It's a conventional business but the selling of its product or service in a normal market covers the cost of distributing the same product or service to someone in need.
Then you've got an embedded model, where the social benefit is enabled by the mechanics of the business. It's something like Jamie Oliver's Fifteen restaurant, where you'd go and have a great meal but its impact model is it gives street kids an opportunity to get some training, have a job and transition to a stable workplace through experience in its kitchen.
And lastly there are the innovation stories, where people come up with smart ways to do things differently - a good local example is Chalkle, which is using technology to disrupt community education.
You recently attended the Social Enterprise World Forum in Italy. What were your impressions from that event?
My major impression was just how scaled, sophisticated and significant social enterprise has become in other countries. For example, in Italy there's a social housing foundation that's been set up as a social enterprise which has raised 2 billion euros to lead the development of high quality social housing - a challenge that's also very topical here. Being at the forum was an opportunity to reflect back on where we are in New Zealand in relation to the global picture, and what we need to do to get that same momentum and basically catch up.
What advice would you have for an entrepreneur wanting to start a social business?
1. Be self-aware and know why you're wanting to do it. Idealism and passion are good, but you also need a deep understanding of what you're getting into.
2. Be really pragmatic. Test every part of your model to see if it works before you get over-invested. That's particularly important for social enterprises because they have to consider their impact model as well as their model for making a profit.
3. It's about teams not heroes. This work is hard and the more people you can pull together around an idea the more chance you'll have to turn it into a real enterprise and make the change you want.
