Social Enterprise In Australia – An Evolving Success Story

Despite recent criticisms suggesting social enterprises have become “self-obsessed” and “disappointing”, there is growing evidence that these emerging ecosystems are coming into a five-year period of growth and success, writes David Brookes, managing director of Social Traders.

It’s an exciting time for social enterprise in Australia. With 20,000 social enterprises making an enormous, collective contribution to our community, Social Traders’ deep and close working relationship with the social enterprise sector heralds the coming five years as a time of growth for the social enterprise ecosystem in Australia.*

Here’s what we see:

A more favourable and enabling policy environment for social enterprise

The Victorian government released Australia’s first statewide Social Enterprise Strategy in February this year. This is the first government initiative in Australia to cohesively develop a strategic framework for social enterprise and I expect other states and the Australian government to follow, spurred on by Victoria’s leadership.

An increase in demand for social enterprise products and services

Over the last 12 months, Social Traders has generated around $20 million in contracts for social enterprises and certified almost 200 social enterprises to take advantage of these new market opportunities. There have been a range of deals, ranging from small transactions under $100 to the biggest at $11 million. Buyers are seeking definition around social enterprise to be able to identify them and secure them in their supply chains.

We estimate that there are $30 billion in infrastructure projects in Victoria that will require social enterprises to play a role within large contractors supply chains. The positive social impact, particularly around the employment of people marginalised by the labour force through disadvantage is game changing for Australia and for social enterprise.

It’s clear there has been a shift and both governments and businesses are increasingly looking to achieve social outcomes through their purchasing. Along with the Victorian government’s Social Enterprise Strategy this is also evidenced by the Federal Government’s Indigenous Procurement Policy (IPP) introduced in 2016.

A diversity and evolution of the social enterprise ecosystem

While still developing, the Australian social enterprise ecosystem is growing and maturing. Finding Australia’s Social Enterprise Sector 2016 (FASES) national research identified that 34 per cent of social enterprises were early stage having been established in the past two to five years and close to 40 per cent of respondent social enterprises had been in operation for 10 years or more. This research demonstrates that the social enterprise community is sustainable with many mature enterprises contributing ongoing social impact; and growing with a large number of new emerging social enterprises. This maturity and growth is characteristic of a healthy functioning ecosystem.

Earlier this year, I suggested that 2017 would be a year for social enterprise to shine. As we approach the halfway mark, I have no reason to change my view. Awareness has grown, the policy environment is now far more positive and conducive. Philanthropy and social investors are highly engaged. And we are also seeing tangible evidence of both government and the private sector wanting to realise positive social outcomes through social procurement, and in particular, buying goods and services from social enterprise.

As for our part, we plan to continue our key intermediary and broker role particularly in the area of helping social enterprise realise new market prospects as procurement opportunities emerge.

Social Traders is privileged to be part of the evolving success story of social enterprise here in Australia.

About the author: David Brookes is managing director of Social Traders and an executive director on Social Traders’ board. He has responsibility for executing the organisation strategy, staff recruitment and external stakeholder engagement. Previously, Brookes has held senior executive roles with Amcor, Toyota and Rio Tinto across government, media and community relations portfolios.

*This article is in response to comments by Bessi Graham, the CEO and founder of social enterprise consultancy, The Difference Incubator, who said the social enterprise movement in Australia had become “self-obsessed” and “internally focused”.