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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Food…Glorious Food?

‘Our freedom to choose one bundle of commodities rather than another may have an important effect on the living standards we can have, the happiness we can enjoy, the well-being we can achieve…The perspective of freedom, with its diverse elements, is much too important to be neglected in the making of food policy.’ Amartya Sen,1987.

Capewell 2015 10 corporations food

I was fortunate enough to attend Public Health Scotland’s annual conference last week, ‘Securing Scotland’s Health.’ I was really impressed by the attendees’ passion for the fight against health inequalities to secure a better future for all of Scotland’s residents. For me, this commitment to the cause was summarised best in Professor Simon Capewell’s plenary session entitled ‘Securing Scotland’s Health by Pills or Policies?’

Professor Capewell is an epidemiology expert from the University of Liverpool. His central proposition is that there are things that impact negatively on our health which we as individuals cannot control and for those things policy change is the best solution. Amongst his examples of past public health policy successes were mandatory seat belts, tobacco sales and smoking bans. Minimum price for alcohol might be a future success, but is currently being fought in the European courts by the Scottish Whisky Association (SWA). The SWA claims the robust academic evidence that minimum pricing works is flawed, a tactic Capewell claims was used by the tobacco industry and is now increasingly adopted by the food industry. Green MSP Patrick Harvie has also recently accused the drink industry lobbyists of mirroring tactics used by the tobacco lobby to fight what he calls ‘life-saving legislation.’

Professor Capewell is particularly concerned about how widely and effectively industries can fight health policy. He ran through some worrying facts about the food industry, including that most of the food in a packet that we buy in the supermarket originates from one of only 10 huge multinational organisations (see picture above). Pepsico alone has a global annual turnover of over $65billion, greater than the individual GDP of over 100 countries. Professor Capewell argued that these companies are very powerful, and hence their tactics to undermine strong research evidence and influence governments through lobbying can be particularly destructive to the common good. The food industry matters greatly to public health. Across the conference it was shown that diet-related deaths are higher than alcohol and tobacco-related deaths combined, and that diabetes has more than doubled in males in areas of highest deprivation.

But thankfully all is not lost. In her blog for the Guardian last year, Ilana Taub stated social enterprises are making a difference throughout the food cycle in the UK, and evidenced her statement with examples of social enterprises growing food, distributing food, making & eating food together, and dealing with food waste. Taub believes social enterprise is making the food system in the UK more socially just, and highlights the importance of food not only as source of good health but also as a social process which creates bonds between people. Such intangible community bonds are embedded in our relationship with food and our cultural & social traditions, most of which revolve around locally-produced in-season or easily stored crops. For example, St Andrew’s Day is almost upon us and many of us will sit down to haggis, neeps and tatties, whilst in the USA Thanksgiving celebrations will see families and communities come together to eat a traditional meal.

Fortunately for us, social enterprise in Scotland has embraced the challenge of ensuring locally grown food is available in some deprived communities and many continue to preserve the intangible social value of food through their activities. So perhaps on St Andrews Day we should raise a glass to the Scottish Community Food Social Enterprise Network, and thank them for playing their part in ‘Securing Scotland’s Health.’

Picture Source: Capewell, S (2015) Securing Scotland’s Health by Pills or Policies? Presentation at Faculty of Public Health Conference Securing Scotland’s Health, 5 – 6 November 2015, Peebles Hydro.

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!

Gateshead_Angel_of_the_North

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.