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Scotland’s social enterprise sector & Manitoba: Lessons from across the pond

Last month, Community Enterprise in Scotland hosted a group of Canadians for a week-long immersion in Scottish social enterprise programming, policy and practice. Canadians from four provinces, federal and provincial governments, social enterprise practitioners and network leaders travelled and learned together from Scotland’s thriving social enterprise sector.

And why Scotland? In 2015, Scotland had over 5000 social enterprises with over 200 new ones forming each year. With an estimated $5.8 billion (CDN $) in income employing an estimated 112,000 people, the Scottish social enterprise sector plays a key role in their economy and communities.

Comparing these numbers on a per capita basis to Manitoba is hardly a perfect science. Disparities in definition, identification and depth of sector survey means a direct comparison is disingenuous, but for a sake of a thought exercise:

Scottish Per Capita Social Enterprise Stats Applied to Canada & Manitoba
CanadaManitoba
Social Enterprises33,0001,200
Annual Revenues$38.5 B$1.4 B
Persons Employed743,00027,500

 

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A key focus of the tour was how the Scottish government supports social enterprise by delivering programmes through partner agencies. Intermediaries, networks and consortiums are used extensively to deliver the Scottish government’s policy goals.

The week had too much to take away, which is an alright problem. Here are four pieces that will inform our work in Manitoba moving forward:

Scaling & Surviving

Programming and development supports for social enterprises, whether from governments or foundations, regularly focuses on scaling successful social enterprises — take something that is working at a local level, and expand it to a broader region or duplicate it somewhere else. However, this may not be to the benefit of the social enterprises impact.

Pursuing scale should not be forced, or necessarily expected. The majority of social enterprises in Scotland’s vast network are small and locally-focused. This supports the notion that it is often localized, highly contextualized solutions that are best at addressing communities’ complex challenges. This should be understood for business development supports as well, as George McConnachie of SENScot commented at the CEIS conference: business development is about sustainability, not necessarily about growth.

As for the sustainability and revenue possibilities for social enterprise, we must make sure our expectations are in check. While Scotland has laudable, strong networks of social enterprises, the majority of them are operating at a break-even margin. Policy makers, practitioners and funders working in the social enterprise field should not overestimate the potential for self-sufficiency through market revenues.

While social enterprises can be a powerful tool in certain circumstances for non-profit organizations to further their organizational mission, it is hardly a panacea for the funding challenges our work faces. Expectations for social enterprise to replace other funding models should not be overstated.

The Value of the Network

We heard it loud and clear, from government officials and social enterprise practitioners alike: The strength of Scotland’s social enterprises is rooted in over 10 years of trustful relationships. As Yvonne Strachan, the Deputy Director from the Scottish Government who is leading their work on the social enterprise describes, relationships have been key to the strength of their ongoing strategies: “Trust is deeper than policy.”Reacting to this means ensuring we provide more networking opportunities and relationship building events for social enterprises and sector partners, whether government, academia, private business or the larger community development sector.

Just how much does Scotland value and have confidence in its social enterprise sector? One of the policy goals of Internationalising Social Enterprise: A Strategy for Scotland (which was released the week of our visit), is to use social enterprise as a means of accomplishing other international relations goals, whether international development, education, or general influence through good global citizenship. The Scottish government has enough faith in the strength of their social enterprise sector to make it a forefront piece of its international relations strategy.

Social Procurement

Across Canada, social enterprise leader are targeting public sector purchasing as an untapped, powerful tool for development and impact. While this is primarily being driven by the social enterprise community (for instance the Manitoba Social Enterprise Strategy, Buy Social Canada and the Social Purchasing Portal), governments are also recognizing the value of social purchasing, such as Ontario’s Social Enterprise Strategy, Metrolinx and theBC Ministry of Social Development & Social Innovation’s Social Impact Purchasing Guidelines.

As we’ve written about before, not only do social enterprises and their employees benefit from access to public sector procurement, but governments are keen as well to unlock the benefits of social purchasing, such as savings to justice, healthcare and social assistance.

Scotland is a global leader in public purchasing through social enterprise. In 2014, Scotland passed the Procurement Reform (Scotland) Act, which requires all broader public sector purchasers to consider the social outcomes of their purchasing, and if any contract above £20,000 does not account for community benefits, its exclusion must be justified.

This legislation is supported through the Developing Markets programme, a program funded by the Scottish Government to create cohesion between the public sector and social enterprises, including working with public sector purchasers to assist them to incorporate social value into their procurement practices. This program is funded with over $4.5 million (CDN$) per year, which is the per capita equivalent of $390,000 CDN per year for Manitoba.

Here are some of the key Scottish social procurement insights:

  • Supplier engagement: Early engagement with the sector and suppliers allows the public purchaser to tailor their RFPs to the strengths of the market, as well as give the market a sense of what RFPs are coming and their make-up. This allows social enterprises and businesses alike to plan innovative consortiums that incorporate social value. There is no conflict if this is done prior to a tender’s release, and public purchasers have made a practice of publishing their procurement and commissioning plans up to 12 months in advance to encourage the development of creative approaches.
  • Collaboration: Many social enterprises in Scotland have found success in partnerships with large businesses, by serving a particular niche for a joint bid. It is a common sentiment that the traditional private sector wants to collaborate with social endeavours.

These insights will continue to feed into the public procurement work of the Manitoba Social Enterprise Strategy, and connections have been made with leading practitioners in Scotland so practitioners in Manitoba may learn from their experiences.

Support for the supplier side of the relationship is carried through Just Enterprise, a multi-pronged support programme delivered through 11 partner agencies. This approach is consistent with much Scottish government service delivery commissioned or contracted through non-profit organizations.

Keeping the Momentum Going

The learning  and relationship building of this trip does not stop now. All the Canadian delegates on this trip committed to continuing to build our networks and relationships. While we will never have the ease of relationships that Scotland does with its small size and single time zone, regional networks that are connected nationally may be a key way to build our collective strength.

I want give a huge thank you the Winnipeg Foundation and the Canadian CED Network Manitoba for this incredible opportunity to learn from and be inspired by the Scottish social enterprise sector. It was a deeply informative and energizing experience.

Darcy Penner is the Policy Manager for Social Enterprise Manitoba (an initiative of the Canadian CED Network Manitoba).