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Predictions for 2021: Social enterprise


11 March 2021 at 8:36 am
Matt Pfahlert
Matt Pfahlert, co-founder of ACRE (Australian Centre for Rural Entrepreneurship), looks at what’s ahead for social enterprise in 2021 and considers the trends, opportunities and gaps for the sector. 


Matt Pfahlert | 11 March 2021 at 8:36 am


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Predictions for 2021: Social enterprise
11 March 2021 at 8:36 am

Matt Pfahlert, co-founder of ACRE (Australian Centre for Rural Entrepreneurship), looks at what’s ahead for social enterprise in 2021 and considers the trends, opportunities and gaps for the sector. 

Like many businesses, social enterprises rode a rollercoaster of pain and uncertainty last year. 

Our own social enterprise was not spared. On 1 January there were mass tourist evacuations across our region due to bushfires so we lost the summer season of trade. In March, when COVID restrictions came into force, we lost significant revenue and momentum as multiple face-to-face events, programs and workshops were cancelled, and our team grappled with a sudden shift to a 100 per cent online world. 

As the dust has settled, I’ve reflected on the trends, opportunities and gaps for the social enterprise sector in Australia. 

Trends

Social enterprise networks are gathering strength and practitioners have a voice 

Over the past 20 years there have been several unsuccessful attempts to establish social enterprise networks. In my view, they failed because practitioner engagement was an afterthought. 

We’re now seeing significant change in the sector, because practitioners are mobilising as a voice for change. While we don’t yet have a national social enterprise cabinet, a strong social enterprise practitioner network exists or is forming in every state and territory in Australia. 

Statewide social enterprise strategies are emerging 

As a leader in this space nationally, Victoria is embarking on its second, four year statewide social enterprise strategy. Queensland is getting serious with social procurement policies and working towards development of a state-based social enterprise strategy. There’s glimmers of hope in New South Wales, the Australian Capital Territory and South Australia. 

In addition, leading practitioners are working with a small number of supportive philanthropic organisations to develop a blueprint for a national strategy. 

Working together works 

The challenges of 2020 fused us together, with collaborative, theme-based networks forming like never before. This is a welcome development. 

In Melbourne, Moving Feast was launched as a pandemic food response to create justice, sustainability and resilience. Food-based social enterprises, hospitality, fair food and regenerative farming enterprises are growing, cooking and delivering produce and fresh meals to the most vulnerable Victorians. 

It’s essential that we continue to look for collaboration opportunities like these beyond times of crisis. 

Young people and many rural communities get it!

Many young people see social enterprise as the business model of the future. It blends entrepreneurial thinking and community heart. Despite extensive class time disruption in 2020, over 80 school-based social enterprises were established during COVID, some by students as young as nine years old. These students participated in Social Enterprise Schools – a practical, student-led experience that develops citizenship and enterprise capabilities simultaneously. 

Rural communities are embracing social enterprise as a tool for self-reliance and to address service gaps and create opportunities. In Victoria’s Upper Murray community of Corryong, the local Neighbourhood House runs the bakery, selling an essential product to locals and tourists, whilst offering training and jobs for youth.In North East Victoria, Indigo Power is building a renewable battery bank to power the community in the event of future climate related events. In the west of Victoria, the small community of Nandaly mobilised to buy back the Nandaly Hotel which had closed. It’s now a hub for a whole range of community activities and valued local services – not just a beer! 

ACRE is responding to an explosion of interest from grassroots, community organisations and groups from rural Australia who also want to explore how social enterprise can solve their local issues. 

Accreditation is part of the solution. 

We’re all familiar with green washing and social enterprise can be afflicted with social washing. In a time when many organisations communicate that they are for purpose and impact driven, it can be hard to know if a social enterprise is for real. Certification is an important part of the journey. Head to the Social Traders website for more info about that. 

The power of place is finally being recognised 

Place-based and collective impact approaches are not going away as communities are demanding long-term solutions to the complex issues they face. There are plenty who are quietly trying to nudge government towards seeing themselves as less of a provider/regulator and more of an enabler and broker. 

Collective impact is a collaborative approach to change that starts to demonstrate impact around the seven to 10 year mark. It’s proven to work, yet goes against our political cycles and short-term funding approaches. While it’s slow going, momentum is building for initiatives that are community led, building agile, resilient and enterprising communities with low future reliance on government. 

Hats off to the Victorian government who provided the first ever public investment into social enterprise network development outside a capital city. The Social Enterprise Network for Victoria (SENVIC) has established five regional networks across regional Victoria assisting over 50 social enterprises during COVID. 

Opportunities

Acceptance of social enterprise as part of the business landscape 

There’s an explosion of social enterprise activity across Australia, yet lots of people in the business community, government agencies and the general public do not understand the model. We still have a way to go here.

Countries like Canada, Ethiopia and the UK have active campaigns to address this issue with a focus on “buy social”. This would be a welcome development in Australia to remove barriers and impediments to social enterprise development 

Scaling to meet procurement opportunities 

Social procurement is an incredible lever for providing employment for marginalised people and giving social enterprise the ability to scale. While important work is happening in this area, more investment is needed in the capacity building and skills development area to help social enterprises become contract ready. 

There are also significant gaps in learning and development, leadership development and specialist business advisory for social enterprises. Scotland funds specialist social enterprise business advisory organisations who understand the dual tension of simultaneously delivering profits and social impact. Australia needs a similar approach. In my view, this will not occur if we rely on traditional business schools and large commercial consulting firms. 

Gaps

The elephant in the room – access to capital 

Appropriate finance and access to capital is not here yet and it’s the biggest barrier to social enterprises scaling in Australia. 

There are signs that access to appropriate capital is starting to be addressed. Practitioner-led organisations like White Box Enterprises in Queensland are providing serious thought leadership in this area, but it is still early days. 

While the Commonwealth government has rarely engaged with social enterprise, it has funded a Social Impact Investing Taskforce to deliver recommendations on future opportunities for appropriate capital. Stay tuned! 

Looking beyond 2021

Social, economic, environmental and cultural challenges take time to understand and solve. Scotland leads the world in social enterprise because it takes a long-term horizon. 

As we move into the next decade, let’s work to build recognition of social enterprise as a valued and valid contributor to the Australian economy. Let’s also work towards building a 10-year national strategy that has bi-partisan support and is delivered by government agencies in conjunction with specialist support organisations who are deeply connected to community.

 

This article is the last in a series of 2021 predictions from experts across the social sector.

See also:

Predictions for 2021: Charities

Predictions for 2021: Shared value

Predictions for 2021: Co-ops and mutuals

Predictions for 2021: Impact investing

Predictions for 2021: Volunteering

Predictions for 2021: Philanthropy


Matt Pfahlert  |  @ProBonoNews

Matt Pfahlert is the CEO and co-founder of ACRE (Australian Centre for Rural Entrepreneurship).

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One comment

  • Angharad Lubbock says:

    As a relative newcomer to the sector, Matt I really appreciate your insights and optimistic outlook. White Box is really excited to be working alongside great leaders like you who are working for the vulnerable people we exist to serve, and for the long-term.

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