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Can entrepreneurs save the world?

Andy Yates
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Waterless toilets in Madagascar and off-grid electricity for the developing world.

An iPad solution to help British children overcome serious communication and learning difficulties and an online platform to help fund your local playground or community project.

An enterprise that successfully trains and hires new apprentices from disadvantaged backgrounds and one that is proven to help young offenders stop offending.
What have these businesses got in common? They are part of the growing entrepreneurial revolution that could change society.

Welcome to the world of social enterprise. And it promises to change the way we all interact with, and feel about, entrepreneurs and business.

A new platform for an established idea

Social enterprise is not new. Victorian philanthropists, appalled by the inequalities of everyday life, set about creating entrepreneurial charities, mutuals, co-operatives, industrial and provident organisations.
The seeds of modern-day social enterprise were sown in groundbreaking initiatives such as ‘The Big Issue’ or commercial organisations such as The Body Shop, which proved there was room for a mainstream business with a social conscience.
The Eden Project, Jamie Oliver’s restaurant Fifteen, Café Direct - the UK’s largest Fairtrade hot drinks company and Fair-trade chocolate company Divine Chocolate, co-owned by Ghanaian cocoa farmers, are the poster children of the current social enterprise sector.
The latest authoritative Government data from 2010 suggests there are about 68,000 social enterprises in the UK, contributing £24 billion to the economy and employing 800,000 people.
But this underestimates the real growth in the sector over the last few years. A social enterprise revolution is well underway. A new breed of entrepreneurs are turning their backs on traditional careers to put something back into society. From health and education to tackling waste and poverty - new technology, new practices and new solutions are creating a new way of doing things.

The new wave

Take pioneering programmes like the Big VentureChallenge. Created by UnLtd, a charity that backs and supports social entrepreneurs, it promises to change the social enterprise landscape in the UK. Following a successful pilot, UnLtd has just secured an groundbreaking partnership with the Big Lottery Fund.

The new programme will provide expert support for 100 of the best and brightest social enterprises, projects that can create a scalable and sustainable difference to lives in the UK. There is also £5 million of funding available to match new investments for those selected. The call for ambitious and aspiring social enterprises is open now and closes in early February.
The new Impact Investments fund from Nesta - a charity that backs innovation - is also a defining initiative that backs businesses that are trying to solve some of our most serious social problems - a rapidly ageing population, chronic youth unemployment and fuel poverty, to give just a few examples.
Then there is the 'big daddy' of the social investment world - Big Society Capital. Launched last year it is a financial institution tasked with developing a sustainable social investment market in the UK. Backed by up to £400 million of deposits transferred from dormant bank accounts, it is backing financial intermediaries in the social sector - organisations that are supporting those that aim to tackle important social problems.
A needed development

The roots of the new social enterprise revolution have been sown by savage cuts in public spending and grants, hitting public services and charities alike. This has created a new breed of social enterprises that know they have to stand on their own two feet and have to create a sustainable (and this implies profitable) business model to survive.
This has created plenty of controversy and could prove to be the defining debate of this decade. Should social entrepreneurs be able to make money for themselves and for shareholders and backers or should profits be ploughed back into society?
On a bigger scale, should larger public services be outsourced to a new breed of private operators, ranging from Virgin to O2?

Should you take profit from altruism?

From an entrepreneur's perspective, I still see a sector starved of capital. Growing inequality of wealth means the world’s social problems are getting worse rather than better.

There is a crying need to attract support from everywhere - from angel investors, to the wider investment community and, yes, from corporations, too. The social enterprise sector needs to adopt a grown-up business attitude if it is to mature. It needs impact investors to make a real impact.
So far, many social entrepreneurs and enterprises that I see do a sterling job at a community level - but haven’t created meaningful impact at scale.
And if entrepreneurs can clearly prove they are creating (and will carry on creating) a meaningful and measurable social impact - creating real cost savings or inventing new and better ways of doing things - I don’t see why they cannot share in society’s gain.
The bottom line is we now need bigger and better social enterprise success stories in the UK or a new dawn will turn out to be another false dawn.
I personally don’t mind if these are done through not-for-profit or for-profit vehicles, as long as they produce the backing, innovation, impact and measurable change that is desperately needed.
To succeed, the social enterprise sector needs to do all it can to attract the best entrepreneurial talent - which is why initiatives like the Big Venture Challenge are so important and why I want to do all I can to help the social enterprise sector become that much more enterprising.

Andy Yates is an experienced entrepreneur, business mentor, advisor and angel investor and helps a portfolio of exciting growthbusinesses reach their potential including Huddlebuy, Europe’s largest business money saving website.Follow Andy on Twitter: @smallbizhelp Follow Huddlebuy on Twitter: @huddlebuy

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