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Social Entrepreneurism

What is a Social Enterprise?

Social enterprises are businesses trading for social, environmental and/or cultural purposes and, as a business model, are gaining attention globally, particularly in the UK, Canada and the US where it is increasingly recognised that greater diversity of business models is needed to tackle current economic challenges.

Profit, or surplus, is generated but not distributed to members, owners or shareholders and is therefore available to develop the public benefit business further. Many social enterprises also have an employment focus, with key social goals around creating jobs and/or employment pathways for people experiencing barriers to entering or remaining in the labour market.

Many are also lead by social entrepreneurs, and the model is proving popular with young people who have a passion for a particular purpose as it brings together commercial and non-profit activity into a new hybrid model.

Traditional entrepreneurship is the process of pursuing opportunity and leveraging resources to create value. A social entrepreneur is someone who works in an entrepreneurial way, but for public or social benefit, rather than to make money. While entrepreneurs in the business sector identify untapped commercial markets and gather together resources to break into those markets for profit, social entrepreneurs use the same skills and mind-set to pursue different outcomes. For social entrepreneurs, untapped markets are people or communities in need, who haven’t been reached by other initiatives.

Social entrepreneurs are particularly skilled at finding new uses for derelict spaces, second-hand materials, and under-used people; as well as squeezing money out of the commercial and public sectors. The most successful embody a curious mixture of idealism and pragmatism - high-mindedness wedded to hard-headedness.

Social entrepreneurs work in every sector, and increasingly are establishing social enterprises as the vehicle for realising their goals. In practice, and particularly during the start-up phase, social enterprises operate like many small-medium enterprises (SME’s), but they have an added layer of activity and responsibility as they work towards their social, environmental and/or cultural purpose. This makes it challenging, but very rewarding, work.

Recent research conducted in the UK showed that the local social enterprise sector contributes £24 billion to the economy, is twice as confident of future growth as traditional small and medium businesses, and since the economic downturn began 56% have increased their turnover. In addition to the considerable financial value they contribute, the additional value they create through their social and environmental outputs is exceptional.


Contributed by: Joanne McNeill
Community Capacity Building Officer Social Enterprise, Parramatta City Council
www.parracity.nsw.gov.au/work/business_in_parramatta/social_enterprise