Social Entrepreneurship Visit to UK


In 20th of July 2010 with the support from the British Council, I participated in a Summer Course about Social Entrepreneurship held by Sheffield Hallam University in Sheffield, UK, led by Dr. Riddley Duff (Dr. Rory). I also had the chance to visit SUMA with Cliff Southcombe, the Managing Director of Social Enterprise Europe. SUMA is a worker cooperative in Halifax, Elland.
Discussions in the Summer Course
 In the discussion it was found that roles of Third Sector Organizations (TSOs) are considered very imperative in making contribution to the development of social entrepreneurship in UK. This is due to the fact that social enterprise is categorized as TSO. In UK, Cooperative is also classified as social enterprise.
Third sector is the sector that consists of organizations that operate based on nonprofit motives but aimed predominantly for shared benefit and on voluntary basis. The non-government and nonprofit organizations as well as cooperative are some of third sector organizations (TSOs).
According to some participants in the summer course the cause of social enterprises to emerge is the fail of neo-liberalism to contribute to social well-being. Another cause is the limitation of private sector to seek fund and create business, hence fails to reduce unemployment. Therefore there is a gap between what have been done by the private sector and the government. As a consequence, social enterprises fill this gap.
This is in line with Hough and Kitson (2007) who argue that the direction of social enterprise is the “The Third Way”, i.e. the combination between neo-liberalism and civil society. The path of “The Third Way” leads to addressing society needs which neither be fulfilled by the government nor the private sector.
Having said that, according to the participants the role of government in UK is still considered pivotal, that is as enabler who promotes civic activism and acknowledges the significance of engagements between voluntary and community sector then foster them.
In UK, cooperative is categorized as social enterprise. Interestingly, some of the participants opined that cooperative as a social enterprise must also provide benefit to the community besides members. In UK the trigger for cooperative development is to help the marginalized people. However, now middle class community also starts to join cooperative albeit mainly for the reasons to get good prices for certain products, such as wine, fruits, etc.
To a large extent, the success of a social enterprise depends on social capital. From the discussion, social capital is understood as “the glue that binds people together”. The “glue” itself consists of beliefs; tie; values; trust; sum of relationship and collective interests. In addition, “crowd-sourcing” is essential for building collaboration through collective works. It is a technique for social networking.
Understanding Social Enterprise
Apparently many participants were still confused about the definition of Social Enterprise. Therefore the first important topic of discussion was the definition of social enterprise that suits our situation well.
I would like to highlight one understanding about social enterprise which was conveyed by Dr. Rory: Social enterprise is an entity that recognizes power; resources; and people for the benefit of people.
Further the characteristics of a social enterprise were discussed. Some of the results are highlighted as follows:
·         A social enterprise is a value driven business practice
·         In a social enterprise democratic decisions are required
·         A social enterprise is defined by what it does rather than how it does it
·         A social enterprise is established by a group of people who come together for a common social purpose
·         Values and ethos need to surface and permeate in the whole organization
·         A social enterprise must do good and cause no harm. It is better not to limit its definition that might hinder people to do good for others
·         It is developing a social purpose and business values through involvement and participation of staffs and community
·         It is established to tackle social problems
·         It should be financially viable.
The legal form of a social enterprise
As previously mention, in UK, social enterprise is categorized as one of the TSO. Therefore the legal form of social enterprise follows TSO’s legal entities. There are six popular legal forms of the third sector in UK; which are: Company Limited by Guarantee (CLG); Community Interest Company (CIC); Company Limited by Shares (CLS); Industrial and Provident Society (IPS); Community Benefit Organisation (BENCOM); and Voluntary Organisation (Ridley-Duff 2010).
            The most popular legal form which is used mostly by a social enterprise there is CIC. It is an adapted business form (can be CLG or CLS), with limited profit distribution; board dominated; and asset locked.
The visit to SUMA
I had the chance to visit SUMA with Cliff Southcombe and were hosted by Bob Cannel from SUMA.
SUMA is a wholefoods wholesaling co-operative for vegetarian/organic/fair-trade foods with around 150 members who are at the same time also workers in the cooperative. Therefore, it is a worker cooperative. 

 
 This is a unique cooperative where there is no chief executive, no managing director and no company chairman. Their day-to-day work is carried out by self-managing teams of employees who are all paid the same wage, and who all enjoy an equal voice and an equal stake in the success of the business (http://www.suma.coop/about/cooperation/).
 
More interestingly, a member is given option to carry out more than one role in the working activities. For example today a member is an accountant, the next day he/she can take the role as a driver. This system provides opportunity to understand other roles and its complication while extending their skills in different tasks.
My reflection
            This was a very important and exciting trip in my journey to understand social entrepreneurship.
            In Indonesia, there have been many social enterprises, but people are not aware that they are named social enterprise. The recognition for its existence is also lacking. This can be observed from the fact that only few financial institutions are willing to provide financial support to an entrepreneur who come with good deed in helping community but with only simple financial reports and business plans. Another fact is the difficulty to find a bank that is willing to give loan for a community logging business.
            Where in UK a social enterprise is part of TSOs, and cooperative is also one form of social enterprise, in Indonesia the term TSO not popular, rather CSO (Civil Society Organization) is commonly known. In fact, cooperative is also part of TSO in Indonesia.
There are several types of TSOs in Indonesia which can be categorized based on its legal entity, i.e.: Foundation (Yayasan); Association (Perkumpulan); Cooperative (Koperasi); University (Universitas); Mass Organization (Organisasi Massa) and Trade Union (Serikat Pekerja) (Radyati 2008). In actual fact, the roles of some organizations in this sector have been significant as well.
There are many good cooperatives that are able to help reduce poverty, such as Credit Unions under INKOPDIT and tanggung-renteng women cooperative under coordination of INKOWAN. Other organizations such as association business people of “Tangan di atas” and PUPUK also plays significant roles. They encourage its members to develop their business and enhance their business capabilities through capacity building activities and social network.
The motives of establishing a social enterprise in UK is similar to those in Indonesia, where many social entrepreneur such as Onte, Tri Mumpuni, Bambang Ismawan, etc also started their social enterprises based on good deeds and social concern for others. The social enterprises that they established have been able to help enhancing economic capacity of communities.
Looking at the success of Indonesia’s social enterprises, then we should be optimistic that this can become a means to achieve social justice. Encouraging the growth and development of social enterprise is to achieve principle no. 5 of our ideology, Pancasila, i.e.: Social Justice for all of the people of Indonesia.
The development of social enterprises in Indonesia can be boosted by the support from the private sector and government. The support from companies can be started from the primary communities that surrounding their manufacturing complex. Government can also provide encouragement for example by giving tax incentives to social enterprises and companies that provide support to them. In addition, government must facilitate the collaborations between private sector and third sector by for instance holding regular roundtable discussions and formal forums to open business collaborations.  
Prepared for Lecture at MM-CSR Trisakti University (USAKTI) 14 August 2010

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