Eight reasons why student-led social enterprise is on the rise
Students are turning energy for protesting about causes they care about into business plans, thanks to a ‘perfect storm’ of awareness of and support for social entrepreneurship, says Manchester Business School’s Dr Robert Phillips
Students have always had a reputation for being radical, with each new generation demonstrating for the causes of the day as they begin to take an interest in politics.
But social enterprises have become a way for students to proactively address real world problems by taking matters in to their own hands – and with the satisfaction of making a change themselves.
A mix of increasing support in the sector and a frustration with increasingly visible social problems has combined to create a climate in which students are creating social enterprises aimed at issues local, national and international. They are using both their academic and cultural backgrounds to inform their business, with those from all subject areas, including science, engineering, business and humanities, getting involved.
The issues addressed are also wide ranging, including problems brought on by austerity and our ageing population, to specific issues such as integration of refugees, food waste, poverty, suicide, reintegrating prisoners, empowering women and minority groups and environmental concerns such as plastic waste.
While some students volunteer and others donate to (or collect for) charities, working with a social enterprise allows those who have some time but little money to earn something while helping a cause they feel passionate about.
One of the biggest reasons for the rise is simply that awareness of social issues among young people has increased. Entrepreneurs require problems that need solving, and social entrepreneurs are no exception. In today's digitally connected world, it's harder to ignore problems from the other side of the planet. Wars, disasters and chronic social issues are reported first hand on social media by those at the scene – making it easier to feel empathy for these causes.
Those who move away from their hometown to study are also committing to their adopted homes by addressing local issues on their doorstep. Homelessness, for example, is highly visible for many who attend big city universities in the UK. Campaigns can quickly gather momentum on social media, which then drives action, such as the recent campaign to reduce plastic.
How are higher education institutions responding to this? University support takes a variety of forms, from business plan competitions with social enterprise categories, to mentoring, conferences and workshops.
Leadership posts have been created to co-ordinate activity; universities themselves have their own social responsibility targets, and are therefore eager to help.
Technology transfer departments in universities – typically involved in licensing technology to industry and helping create and nurture spin-out companies based on technological innovation – are also now looking at creating social value. Many university-based business incubators as well as many in the private sector are supporting student social enterprises to make the transition from university life to commercial reality.
Nesta, the social innovation foundation, conservatively estimates there are more than 200 incubators and 160 accelerators in the UK (with about half in London) – many now cater specifically for social enterprises, such as Hatch Enterprise (London), The Young Foundation (London/Belfast), UnLtd's Thrive and Dotforge, for tech social enterprises (in Manchester).
The financial situation has improved, with a plethora of funders now offering grants – such as UnLtd, the National Lottery Community Fund, the Arts Council and the Esmee Fairbairn Foundation. Crowdfunding is also possible (generally using the donation or reward-based models), and even banks such as NatWest offer loans specifically for social enterprises.
Once up and running, governments are helping social enterprises to reach a larger market by allowing councils to outsource to social enterprises if they offer a cost-effective solution and provide value for money for taxpayers, as determined by the Public Services Act (Social Value) of 2012. This act was reviewed in 2018 and there is now a commitment to both widen the scope of the act and challenge all companies tendering for government contracts to explicitly show the social value they will create.
New company structures aimed at social enterprises make it easier to set up with less risk to the founder, funders and beneficiaries, with Company Limited by Guarantee and Community Interest Company (CIC) being the most popular formal structures.
As well as philosophical reasons prompting students to get involved, there are practical reasons, too. Going to university has become the default option for many school leavers – leading to more competition for the best jobs, degree-creep with more people going on to study for postgraduate degrees, and an increased difficulty in standing out from peers. Almost all recruiters say entrepreneurial qualities are essential in new graduates, so social entrepreneurship is a good opportunity to add skills and personality to a CV, should the student opt to get a traditional job rather than continue with their venture.
Media exposure has also gained considerable momentum. For many years The Big Issue was the archetypal example of a social enterprise; few others achieved such profile in the public eye. Now, we're hearing about lots more organisations, as the mainstream media is reporting good news stories, while social media ensures that these social enterprise success stories are more visible, easily accessed and shared.
This perfect storm of awareness and support means students are actively contributing to the increase in social enterprises in the UK. The notion of creating and growing social value by entrepreneurship is firmly in the minds of our graduates.
Dr Robert A. Phillips is Senior Lecturer, Manchester Enterprise Centre, Alliance Manchester Business School, University of Manchester. Twitter @DrRobPhillips
Dr Rob’s eight reasons why student social enterprise is on the rise:
- Support networks – such as incubators, mentors and clubs specifically for social enterprises – are now at critical mass.
- More available funding, such as through crowdfunding using the donations (which has seen a huge rise over the last few years), and from funders such as UnLtd.
- Declining trust in established charities.
- The value of gaining entrepreneurial skills: even if the student goes on to apply for a job, their experience means they stand out among the rising number of people with university degrees.
- The personal satisfaction: compared to volunteering or protesting, it can be emotionally more satisfying to have a leadership role in this kind of problem solving.
- Bigger market: students can observe, identify and learn about problems directly around them – but also around the world via social media. Rising population, austerity, ageing population, refugees, food waste, poverty, suicide, empowering minorities, reintegrating prisoners and environmental issues such as plastic waste are all focus areas for social enterprises.
- Government making the ecosystem more social enterprise friendly by allowing new company legal structures for social enterprises and allowing councils to contract them if they are more cost-effective than doing it themselves.
- Increased publicity for success stories in the media.
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