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.

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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

The Ins and Outs of Rural Migration (Part 2)

This week we continue our conversation about rural migration from first-hand experience. Using themes drawn from literature Bobby Macaulay will guide us through his experiences. Bobby is a CommonHealth researcher who left Shetland shortly after his 16th birthday.

Rural economies are dominated by low paid labour markets and there is a lack of training and education opportunities for young people……

Bobby: I don’t think it is necessarily true that you are more likely to go into a low paid job, but I would say that the choice of well-paid industries is much more limited in Shetland. Despite its ups and downs, the fishing industry in Shetland is still strong with some of Britain’s largest pelagic trawlers based in the isles. Another source of well-paid jobs is the energy industry, previously dominated by oil but now developing into natural gas and renewables. Through the UHI-affiliated Shetland College and NAFC Marine Centre, there are possibilities of gaining certain sector-specific training within Shetland. However, outwith these industries and the upper-echelons of the public sector, well paid jobs may be harder to come by.

Young people face scrutiny and hostility for wanting to move away……

Bobby: Cultures die if young people do not keep them alive. Therefore, there is a natural and understandable desire from the older generation that young people remain in the community to continue that culture, whether it be in the form of language or dialect, livelihood or local practices. So for those families and communities very deeply rooted in the culture of an island (which can be totally different even to the neighbouring island) there would be a desire for their young people to stay, or at least promise to return home.

I have never personally experienced hostility for leaving but that may be because (a) my parents are not native Shetlanders so don’t have such a deep rooting within the culture, (b) there may be a belief that new practices and viewpoints may not necessarily be detrimental to an island culture as it evolves, or (c) they weren’t too bothered about losing my presence within the community!

There is little to keep young people occupied in rural locations, which can affect emotional wellbeing…..

Bobby: Similarly to Jack’s response to this last week, I have never found this myself. Before I left home I was involved in a huge number of sports, clubs and activities and rarely found myself with nothing to do. Even now when I go ‘home’ there is always too much to do. This may differ between people and communities but I subscribe to the belief that ‘you get out what you put in’ so those people who are willing to get involved in the community will find that there is a huge amount to do and gain from being part of it.

There are many older retirees moving to rural communities which can be a burden on local services e.g. healthcare…..

Bobby: Of the people who have moved to the island I am originally from, I don’t know that I could say they tend to be much older. I’m not sure about the strain placed on public sector bodies but I can see the opposite effect on local businesses and schools. The bigger the population, the more products the shops can sell. The more kids are in the school, the more jobs can be supported on the island. In this way a steady in-migration to an island community can help sustainably support local businesses and preserve local jobs.

Incomers tend to interfere or try to take over the running community activities, leading to hostilities….

Bobby: This is a very poignant question for me as my parents were incomers to the island, moving there 2 months before I was born. Over the past 28 years they have been involved in a huge number of community activities. Over that time they will have undoubtedly done things in their own way, but I don’t think there is any suggestion that this has been detrimental to the island, and I am unaware of any particular hostility towards their involvement. As Jack said last week, the values held by an island culture are not necessarily compromised through the involvement of incomers. Indeed, it may be these very values which attracted people to move to the island in the first place. As any community evolves, it must decide which elements it carries forward and which it lets slip away. Perhaps the level of hostility towards incomers in community depends on which elements of the community culture fall into each camp.

The Ins and Outs of Rural Migration

In compiling my literature review on the challenges and opportunities for social enterprises in rural Scotland, I have been struck by the negativity often associated with life and conditions in rural communities.  Two of the biggest challenges for rural community culture are found to be: the decreasing numbers of young people remaining in the community, leading to the increase in ageing rural populations; and the consistent number of ‘incomers’ to rural areas, such as retiring city dwellers, and the effects that this ‘counter urbanisation’ has on community life.

Despite these issues having been highlighted in academic literature, I was keen to hear the perspectives of the Yunus Centre’s own islander population, Jack and Bobby, dubbed ‘the faces of rural migration’, on a few prominent themes from the literature highlighted below. This week we begin by chatting to Jack Rendall, one of our PhD students, who left rural Orkney at the age of 18 to study at University here in Glasgow.

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Jack en route to sunny Glasgow

 

Rural economies are dominated by low paid labour markets and there is a lack of training and education opportunities for young people……

Jack: To gain a highly skilled job within certain industries in Orkney you would need to have college or university education and the chances are that this would only be achievable by moving to mainland Scotland. Consequently, for those remaining on the island the chances of walking into a high paying job would be slim; therefore many people end up in low paid jobs within local businesses. Young people who stay in Orkney may consider something ‘well paid’ if it makes them enough money to support their family, perhaps reflecting differing priorities within the isles. There is a lack of training and education in areas such as renewable energy and other growing industries in Orkney where skills are essential and in demand.

Young people face scrutiny and hostility for wanting to move away from rural areas……

Jack: The reverse is often true amongst young people and their peers in Orkney, as many are ridiculed for having ‘little ambition in life’ if they don’t want to move away. However, older generations may view this differently as young people are necessary for the survival of communities and maintaining history and tradition. Hostility may be felt towards those who have already moved away and openly express their reluctance to return. I’m choosing my words very carefully in this respect so as not to be met off the boat with pitchforks and torches, I would love to return home one day. Either way, there are no real vehement views, part of being an Orcadian may arguably be the understanding that people will always come and go, it’s about making the most of the community you have.

There is little to keep young people occupied in rural locations, which can affect emotional wellbeing…..

Jack: I would disagree, by and large young people are willing and motivated to get involved in island living and there are many opportunities to learn and get involved with things. There’s a great sense of freedom in being able to walk around at night and feel safe or having easy access to beaches and countryside. I appreciate that many people may struggle with this, but for me living in Orkney has only affected my emotional wellbeing positively.

There are many older retirees moving to rural communities which can be a burden on local services e.g. healthcare…..

Jack: It is more apparent in Orkney that those who retire to the islands usually have the money to do so, therefore they are often more economically active; restoring old homes, building new ones and attending local events. They also tend to be very socially active, getting involved in community groups and bringing with them their experience. Whilst this does not lessen the need for elderly social services, it does highlight the fact that they are often some of the most valuable members of the community.

Incomers tend to interfere or try to take over the running community activities, leading to hostilities….

Jack: There are many different types of incomers, so as with any community it is not likely that everyone will be embraced in the same way. Most people are active community members bringing with them enthusiasm, new skills and expertise. Many incomers inevitable get involved in decision making as it is often them who are affected directly by community activity. The way of life on Orkney is constantly changing and adapting, however this does not mean that islanders can’t maintain the same values, and that is what people strive for. Two very important values are to be welcoming and friendly; ‘incomers’ are even front page news on a local island community newspaper which is just one warm example of our hospitality.

Next week we will be continuing the conversation with Bobby Macaulay, one of our Commonhealth researchers who migrated to Glasgow from Shetland…..

Playing the game: balance or trade-off in social enterprise?

This week we have a guest blog from Dr Micaela Mazzei. Her ethnographic research with social enterprises in northern England looks at how organisations deal with operational challenges. Both the subject and the approach to her work is of interest to the CommonHealth team, so we hope you enjoy hearing about her research as much as we do!

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The more social enterprise has risen as a government priority the more it has been defined narrowly around the form of a firm able to balance social and economic objectives. One aspect of my research has been to question this idea of ‘balance’ and how this plays out in practice. I adopted an ethnographic approach; involving 20 organisations for a period of time and using interviewing, observation, and interactions as the main data collection techniques. I focused my research on two northern English city regions that shared a common industrial past but varied in their policy approaches to social enterprise.

Immerging myself in the social economy of Greater Manchester and Tyne and Wear for more than a year, I found that contrary to the idea of balance, the reality is one of constant negotiation between diverse and often competing goals, motivations, and commitments that often lead to trade-offs. The nature of the tensions and challenges arising does vary, however, with differing implications and degrees of intensity depending on the circumstances, motivation and the market in which organisations operate.

Organisations operate in a volatile environment where changes can occur unexpectedly. A central challenge is dealing with changes that effect finances as this then dictates what happens to an organisations social aim. This has different implications depending on whether organisations operate in consumer markets or public service markets. In most cases organisations struggle to maintain sufficient income to guarantee service delivery and are often involved in ‘playing the game’ to gain resources. However, public funding is also seen as potentially limiting as it dictates delivery, sometimes with poor reflection on the actual needs of the communities organisations are trying to serve. Often services are costed by taking into account all expenses and trying not to work at a loss. However, the more support that is needed for beneficiaries, the more resources organisations need to deploy in order to provide a quality service. This is seldom recognised in contractual agreements. Even those organisations born from an explicit business idea that have successfully benefited from changes in the mainstream market (for example organic food sale) cannot claim a secure position. Despite establishing their offer through a solid client base and expanding organically by investing in ventures in line with their ethos, these organisations are still vulnerable to market changes.

The complex ethical space between the interests of beneficiaries, funders and organisations themselves lead to different prioritisations depending on the circumstances. Generally, when time and resources were available, organisations were found to reflect and debate about the ethical implications of change. However, time and resources were often lacking and therefore decisions had to be made quickly. It is in these situations that the propensity of organisations to focus on either high quality services/products, sharing, or reducing costs emerges, revealing the diverse ways in which organisations deal with tensions.

Recognizing the tensions social enterprises experience implies that there is a need to scale back on market expectations and/or support welfare functions more appropriately.

What should we scale when “scaling up”?

 

This week, Professor Cam Donaldson, Principal Investigator of the CommonHealth project, shares his thoughts on scaling-upeyeball-155174_640

As an economist, I often find myself thinking and saying things that recipients of my utterances might think contradictory to my parent academic discipline. A general example of this is that “we don’t have to put a monetary value on everything that might count within a cost-benefit analysis”. Within the context of our commonhealth research programme, my latest bugbear is going to some meeting on social enterprise and hearing some smart-arse make a comment about scaling up! This is usually a negative comment about the lack of ability of social enterprise to scale up, supported by a statement or implication that scaling up is necessary. It may even be accompanied by a smug look, reflecting on a controversial point well-made (given the audience) as the social enterprise love-in is stopped in its tracks.

Me? I just tend to copy the antics of an animated colleague of mine when such points are made – I roll my eyes!

First of all, not only is the point an easy (even lazy) one to make, but also it is factually wrong. There are plenty of examples of very large social enterprises out there; moreover, many of these entities have scaled up whilst staying true to their original missions and principles. They are not hard to find – so just make sure you go to meetings armed with a couple of examples in case the scaling-up bogey person is there.

Second, you might, if there is time, venture into a more philosophical and evidence-based debate with said bogey person. This could go along several lines such as:

  • Dismissing the point by arguing that many social enterprises, by their very nature, are local. In many respects, this is the essence of social enterprise, is it not? We know, for example, that things like social capital and social connectedness are positively related to health and well-being. Perhaps these things can only be generated by the more-intensive, community-based and local nature of social enterprises. It is these kinds of relationships that commonhealth is trying to tease out. As a result, and I am afraid to say, I do not really find myself thinking too much about issues of scale, in its conventional sense, in any of commonhealth’s eight projects. To me, it is a second order issue. Context is everything. So, if a well-functioning and socially-productive social enterprise can scale up without losing the essence of what it does, then, of course, more of this good stuff should be spread throughout society.
  • But, a further note of caution might centre on the argument that that attempting to scale-up social enterprises in terms of trying to impact positively on public health could lead to exacerbating the very same problems that we are trying to fix. Might it be that the NHS monolith is incapable of responding to differing health needs across the UK, thus leaving places with differing health needs (e.g. Glasgow and remote-rural populations respectively) underserved? So, the scale of the NHS, arguably one of the very things for which it is revered, may restrict its success through its lack of ability to get upstream in the ways that social enterprise can.
  • Returning to the issue of still wanting to spread the good stuff around, this brings another question into play – what is it that we want to scale up? There is a much more interesting discussion to be had here beyond just thinking about scaling up in some sort of financial or economic-growth terms. Can we apply thinking about scaling up to other dimensions of social enterprise and what might be the implications of this? For example, it might be that what we need to discover are answers to questions such as how we scale up social capital and connectivity. If the evidence shows that we do indeed want to do these things, the implications then become very interesting, and involve things like trying to create the right environments for economies based on principles of mutuality and reciprocity to flourish. Such flourishing might involve lots of small (social enterprise?) entities operating in their natural (localised) settings. Some, too, might still grow in the conventional manner of scaling up, because that is what is appropriate for them – and we also know that the scale of social problems in some parts of the world (e.g. Bangladesh) are so vast that thinking of scaling up in more conventional ways is more important than, perhaps, the scaling down that might be required in parts of the UK (health) economy. Context, once again, is everything.

The next time scaling up is mentioned, if there is time for the debate to go along some or any of these lines, my eyes will stop rolling and be firmly fixed on the prize!

 

Professor Cam Donaldson