The evolution of the social enterprise
7 min read
26 March 2013
Lesley Cowley, CEO of Nominet, explains how the Internet has catalysed the growth in social enterprise and will continue to do so in the future.
It’s difficult to remember a time before the internet, especially for those who can recall the excitement and anticipation created by the .com boom. According to research, Brits spend on average just 1.2 waking hours not using any technology, taking into account everyday items such as computers and smartphones. This transition to the online world can also be seen in many areas of the business world, including social enterprise.
A social enterprise is primarily an organisation which aims to address unmet needs, reinvesting profits into its chosen social mission and using business strategies to jumpstart social change. Social enterprise can be traced back at least as early as the 1840s, when a workers’ co-operative in Rochdale was set up to provide high-quality, affordable food in response to exploitative factory conditions. In the pre-internet days, social enterprises were generally limited to local communities using church and town hall message boards and word of mouth to publicise social problems and how to solve them.
Today, the benefits of the internet have transformed the potential reach and impact of social enterprise. Entrepreneurs now have the opportunity to expand their reach beyond local communities and encourage the involvement from others with similar ideas anywhere in the world. Previous to this, an entrepreneur would have to rely on their personal connections in order to make the business commercially viable. A more connected and aware society increases openness and transparency and therefore social issues are more likely to be acted upon.
Another benefit the internet has brought to social enterprise is the ability for entrepreneurs to refine and improve their proposal before it is launched – a term known as “open innovation”. For example, Kraft Foods, the food and beverage company runs Kraft Collaboration Kitchen, which encourages entrepreneurs and experts from other business sectors to form mutually beneficial partnerships which results in improvements to its products.
Similarly, in social enterprise, rather than launch a product or service without getting feedback from the selected community, a social entrepreneur can use the internet to involve the community in the initial decision making process and in return get a more effective result first time around. This is comparable to the first ancient democracies which used more people in the decision making process making the final result suitable for the masses.
Social enterprises can also make improvements to their business models by connecting with other organisations with similar motivations to share knowledge, resources and tools. For example, UK Online Centres Foundation co-ordinates a network of more than 3,800 centres across the country, including libraries, Housing Associations, community centres and schools, providing training and support to hundreds of volunteers and community leaders who tackle digital and social exclusion. They provide community activists with the tools they need to take their first steps online, including information on legal frameworks, taxes and managing money. These online tools are then scalable and adaptable to fit in with the exact needs of the business.
The internet itself has not just improved and extended social enterprise, it has opened up a whole new world of opportunities. The Nominet Trust, an independently run charity, funds a new programme called Apps for Good by global education and technology network CDI Europe. The programme encourages young people to learn about and build mobile apps that focus on solving real life community issues they are affected by.
Another example of the frontiers opened up to social enterprise by the internet is through open data – data that is freely available for everyone to use. For example, School Scope turns official government data about schools and uses feedback from users of the platform, to turn into easily digestible information that parents can use to determine which school is most suitable for their child. The internet not only gives social enterprises like these the chance to develop the skills and entrepreneurial spirit of young people but also gives their peers the opportunity to improve their communities and highlight organisations which are failing them.
In the future, the internet will no doubt empower social enterprise even further with its mission to bring about social and environmental change. It will be interesting to see the progress in developing countries as their technology infrastructure improves. To some extent social enterprise has already made inroads in this area. For example, the Indigo Trust, a foundation that funds technology-driven projects to bring about social change, largely in African countries, is already driving technology innovations in areas that need it. As new Internet technologies develop, the nature of social enterprise will evolve. One of last year’s Nominet Internet Award winners, Hao2.eu Ltd, an organisation which provides access to employment, training and business opportunities for people with Autistic Spectrum Conditions (ASC) via the medium of 3D virtual world technologies, may in the future be able to accomplish the extraordinary as the technology develops and augmented reality type applications become more mainstream.
We should also expect to see many more small social enterprises spring up as technology develops and more people around the world get online. The Internet provides social entrepreneurs with so many opportunities and tools to get started that it is possible for anyone with a passion and drive to do good for social improvement. If the internet can make an eight-year-old with a passion for collecting marbles into the UK’s youngest entrepreneur, imagine what it can do to help social enterprise.
Lesley Cowley is CEO of Nominet.