Can social enterprises successfully deliver rural services? Exploring challenges and opportunities to rural social enterprise development

In this blog Artur Steiner, Lecturer in Social Entrepreneurship at the Yunus Centre for Social Business and Health shares his observations about activities of social enterprises in rural locations. Can they really deliver rural services successfully? What stops them form and, more importantly, helps them in doing so? These are some basic questions but it is important to explore them if we want to design policies and interventions supporting the development of rural social enterprises.

So far, in my academic life I had an opportunity to participate in several research projects that explored activities of both rural businesses and rural social enterprises. We all know about challenges associated with rural life. Those challenges relate, for example, to inaccessibility of goods, services and opportunities for wide social interaction. However, rurality, as a geographical context, affects not only people living there but also activities of businesses and social enterprises. As such, in relation to business development, rural locations present challenges associated with small, widely dispersed clientele, ageing population and limited human resources, physical, technical and economic barriers, and distance from service centres. Despite this (or possibly because of this!), research indicates that rural citizens are more likely to be socially orientated in their entrepreneurship than urban dwellers (Williams, 2007) and in recent years there has been a growth in community-run enterprises (see Plunkett Foundation). This might be because of strong social networks, embeddedness and social movements that are evident in rural communities (Jack and Anderson, 2002). For many years it has been argued that rural citizens draw upon such traditional rural strengths – strong mutual knowledge, sense of community and social cohesion. Moreover, social networks are denser in rural, as compared with urban settings, with resulting outcomes of high levels of trust and active civic participation. Probably because of that rural businesses are frequently closely integrated with their local community generating loyalty and stability amongst their local customer base which may help to offset some of the limitations of the rural business environment.

rural

In relation to rural social enterprise research, emerging patterns across my study results indicate that the key challenges and threats to rural social enterprise development include:

  • Rurality and the challenges of the geographical context (as highlighted earlier)
  • Mismatch between national and regional level-policies promoting social enterprise and lack of rural social enterprise policies
  • Rural social enterprise risk-aversion and change resistance
  • The complex nature of funding for social enterprise development and difficulties in accessing appropriate funding by rural social enterprises
  • Persistent grant-dependence and a lack of financial sustainability of rural social enterprises
  • Lack of entrepreneurial skills across rural social enterprises
  • The challenges of complex social enterprise ownership structures
  • Difficulties in defining and measuring the contribution of social enterprises to local development
  • Perceived pressure to replace voluntary organisations with social enterprises.

On the other hand, key opportunities for rural social enterprise development are:

  • Co-production of public services addressing gaps in rural service delivery
  • Turning existing rural needs into opportunities and taking advantage of emerging rural markets
  • Using advantages of the rural context (as highlighted before)
  • Creation of locally tailored solution to rural challenges
  • Benefits of ethical markets and growing recognition of social enterprises
  • Existing support structure
  • Growing awareness of the importance of being more business-like
  • Enhanced rural collaboration and networking
  • Developing self-support and a proactive approach.

So far, presented information tells us two things; first, rurality affects not only the culture, attitudes, the way how people think and support each other but also activities of social enterprises. Second, there are advantages and disadvantages associated with developing and running a social enterprise in a rural location. As such, it seems quite obvious that rural context matters. However, is this sufficiently recognised in currently policies and support structures for social enterprises?

In general, current UK policies suggest that citizens will take greater responsibility for organising services traditionally delivered by the state with communities, neighbourhood groups and community organisations doing  things ‘for themselves’ (this includes the Conservative Party, 2010 and the plans for the Community Empowerment Act that date back to 2009). Simultaneously, the UK governments have supported social enterprise through direct funding, business support and, increasingly, through procuring goods and services from social enterprises. But is this support and funding tailored well enough to address needs of rural social enterprises? Interestingly, recent Social Enterprise Census (2015) indicated that 32% of Scottish social enterprises are located in rural areas. This is substantial considering that rural Scotland is home to only 18% of Scotland’s population (Scottish Government, 2011). This would suggest that policies are efficient in supporting rural social enterprises and that social enterprises have found a fertile ground to grow. So, can social enterprises successfully deliver rural services?

My rural social enterprise research across different locations indicated that despite many potential challenges associated with the rural context, provided they have the right level of entrepreneurship, social enterprises are well placed to sustainably address local social, economic and environmental issues delivering services to local communities. Growth potential for small-scale social enterprises exists in a range of communities across rural regions. Social enterprises are well positioned to best utilise available local resources and to tackle rural challenges. Still, my research observations indicate that in order to help rural social enterprises to grow, social enterprises need tailored support that differs from the support offered in urban centres. This can include, for example, funding available at the local level aiming to build capacity and enhance the sustainability of community social enterprises, specialised practical business support that acknowledges the rural context and local characteristics, and knowledge dissemination about successful local and rural social enterprises.

Finally, in order for social enterprise to successfully deliver rural services, rural challenges and needs should be transformed into opportunities for social enterprise development. For instance, social enterprises should capitalise on the increase in consumers and businesses willing to support businesses that are ethical and socially sustainable. They should build a recognised and trusted brand, and enhance collaboration with public service markets and private businesses. Moreover, the ageing population could act as a promoter for developing the ‘silver economy’ and an incentive to set up and run social enterprises in health and care service provision. Rural social enterprises could, for example, take advantage of rural settings and become involved in food production initiatives or renewable energy projects. These aspects are especially relevant to Age Unlimited and Growth at the Edge Common Health projects that explore impacts of (rural) social enterprise on health and wellbeing of (rural) communities.

Guest Blogger: Artur Steiner

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