Welcome and instruction

Thank you. Its a real privilege to be here today in the beautiful city of Zagreb and at this
summit on Building civil society and social enterprise knowhow for 2020
and beyond.

Through our Global Social Enterprise programme we support policy-makers and thought
leadership. With this in mind, and in dialogue with the EU Commissions policy advisors, we
commissioned a vision for social enterprise in Europe in 2020.

Our aim was to create a dialogue about what the future holds for social enterprise.

I am going to share with you some of these themes, look at the current landscape and what
we need to do to position social enterprise as a business model for the future.

The vision in this paper is intended to be thought-provoking some would say controversial
and it has already inspired a lot of discussion and debate.

We hope that it will help to crystallise the key issues and trends along with the skills needed,
to help us to consider where we want social enterprise to be in 2020 and the skills required
to achieve this.
About the British council
But first a little context: The British Council is the UKs international cultural relations body,
and we create international opportunities for the people of the UK and other countries and
build trust between them worldwide. We operate in 108 countries, including right across
Europe.

Part of our work is about sharing ideas and expertise to support more inclusive, open and
prosperous Societies.
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This builds trust locally and internationally. And we recognise social enterprise as a tool to
achieve this.
Why social enterprise?

Social enterprise is a small but integral part of the worlds economy, but its influence and
impact grows year by year. They exist not simply to sell in markets but to make and shape
markets, not to commercialise social problems but to revolutionise our approach to them.

They employ more people and plough profits back into communities most at need. Their
leadership is much more representative with statistics indicating that there are higher
numbers of women and ethnic minority leaders than is other sectors. The more deprived the
community the more likely you are to find a social enterprise working there.
Since 2009 we have

Provided training to 9,050 social entrepreneurs, across 26 countries

Formed over 150 partnerships across all sectors
Engaged more than 100,000 people face-to-face through study tours, lectures,
dialogues, competitions, and forums

Our impact goes beyond country boundaries. In 2013 we worked with the Asia Europe
Foundation to host a policy dialogue in Berlin. Representatives from 24 countries across
Asia and Europe exchanged thinking and best practice about developing a robust policy
context for social enterprises in the two continents.

The UK and other countries globally, have been trying to create an eco-system for social
enterprise including legal frameworks, procurement policies, financial products and advice
for social entrepreneurs. The British Council supports this globally, sharing knowledge and
best practice on a mutual basis.

In Europe we are committed to reaching disadvantaged young people and recognise the
need for new solutions such as social enterprise. We have recently launched a new schools
pack to support and encourage young people to think about social entrepreneurship as a
viable career option and to harness their skills in motivation, negotiation, creativity and team
work.
So lets begin with the here and now and what social enterprise and the landscape we
operate in now looks like.

In Europe the need is urgent for new solutions and this has increased significantly with our
current migrant crisis. Youth unemployment in some European countries is as high as 48%.
Some 7.5 million young Europeans are not in employment, education or training.

Does social enterprise offer a possible solution? Can it act to reverse some of the key
negative trends that preceded the crisis, such as

rising inequalities,
lack of social responsibility among market actors, and
Reliance on public budgets to deal with the consequences?

New actors, new behaviours

In 2014 the European Commission published a mapping of social enterprises and their eco
systems across 29 European countries. This in combination with the EU Commissions
Social Europe Guide, volume 4 shows a shift in thinking and direction.

The EU 2020 strategy suggests that, the recovery cannot be based on a business as
usual approach, simply going back to the way things worked before the crisis is not
possible.
The Social Europe guide suggests the low rates of economic growth, the complexity of
society, and growing demands for new services are challenging the European model of
development.

So how is the world changing?

Demographic and economic shifts over the past few decades have brought about significant
changes in the social needs of the population:

as life expectancy increases, so does the need to find new ways to care for the

elderly;
as more and more women enter the workforce, child care has emerged as a major
new area of intervention;

As Europe has attracted more and more people from other countries and other parts of the
world, the economic and social integration of migrants has required attention and new policy
tools;
and as the economy has become more knowledge-based, the education systems have
needed to diversify and improve. In addition, society needs to find responses to climate
change and dwindling of natural resources.
The impact of this suggests that people are looking at alternative ways of doing things.

As people suffer the effects of economic transformations that they cannot control or direct,
many are feeling excluded and powerless. Increasingly people are looking outside the
traditional structures of political parties or trade unions, and exploring less hierarchical and
more participatory forms of enterprise.

Slide of size and scale, policy etc

There is a varied picture across Europe with 19 countries having some kind of legal status or
statutes relating to social enterprise, only 7 with specific policy and a further 7 in
development.
In 2015 the EU introduced new directives for public contracts enabling public bodies to
reserve health; a social and cultural service contract exclusively for social enterprises for a
time limited period and encourages larger tenders to be broken into smaller lots.
Are we taking full advantage of this and are public bodies fully creating the opportunities,
and do we have the right tools in our box to do this?

Against this backdrop there continues to be an ongoing dialogue and debate globally around
definition and the key supports required by social enterprises. Wherever you travel my
experience is that many of the same issues are discussed and debated. Such as

Definition
Legal frameworks
policy
skills development and
access to finance

There is some evidence to suggest that where all of these exist they promote the right
conditions growth. The Social Value Act in England and Wales now places a duty on
commissioners to take into account the additional social value created. Increasingly the
public sector is outsourcing services and there is a growth and maturing market place
around social finance.

Some of you may have been in Strasbourg in January 2014 where 2000 social
entrepreneurs and supporters of social enterprise came together positioning social
enterprise as a model for the 21st century. The ten point call to action describes the actions
and eco system required to support social enterprises in Europe.

Social enterprise in 2020

So what did our vision for social enterprise in 2020 say? Maybe not what you might think,
given that the opportunity seems ripe to approach things differently.

By 2020 most grant aided charitable groups will look more like social enterprises with
a large part of their income coming from earned income.

Changes in procurement practice within the EU will continue to place a focus on

social value and this will change the way all businesses operate.

All organisations will be categorised by their ability to deliver a social return on

investment, blurring the boundaries between social and private enterprises.

by 2020 many organisations will produce an annual impact statement, allowing

society to judge all organisations. Social enterprises will no longer be able to claim
they are better than private enterprises.

Governments will be contracting rather than delivering services, demanding better

value for money.

There will be a growth in payment by results and social good for minimum financial
output will become the norm, and many private enterprises will be doing this better
than social enterprises.

Definition will matter less and many private businesses will fall within the broad
definition of social enterprise, and this will lead to an increase in collaboration with
the private sector for both delivery and private investment into social impact bonds.

There will be a growth in social lending and trusted social enterprises with their roots
in poor communities will offer bank accounts and loans to people otherwise excluded,
they will partner with credit unions, financial mutual and commercial banks.

The pendulum will swing from grants towards loans and venture capital.

We will see large national and international social enterprises emerging, powerful
digital networks developed by young people.

Smaller social enterprises will not be delivering big contracts but acting as the
inventors and testers of new approaches, they will adopt the role of research and
development labs, moving into high tech university spin outs.

Social enterprises will exist not just to sell into markets but the help shape them.

We will see strong and practical leaders emerging sharing best practice and
networking.

The great success of Social enterprises in 2020 will see them leading the way in youth
unemployment and job creation, working with the most excluded from the job market,
creating new jobs for disadvantaged people in areas of poverty and deprivation.

We will see a growth in franchises in response the pressure to scale up but helping to
scale new ideas rapidly across Europe and beyond. Charities, church groups,
schools and local authorities and even for profit businesses will look at these
opportunities.

Many social enterprises will struggle to preserve their social innovation, client centred
approach and independent voice within the tight constraints of service delivery contracts.
For profit companies will compete to deliver the same services for a lower price.

There will be a growth in collaborations in order to demonstrate and quantify their

impact

The drive for social enterprises to become investment ready will lead to increasing
demand to develop skills in business for their leaders.

More leaders from the for profit sector will be brought in and they will be supported
by a raft of qualifications in social enterprise from universities and business schools.

The role of social enterprises in 2020 is to take risks and push boundaries. They will be
shaping markets, not simply existing to sell in them.

Preparing for the future

In my view in preparing for the future and staying close to the values and principles
embedded in social enterprise as a way to do business we have some big mountains to
climb.
The vision for 2020 provides lots of clues are what we need to doing to retain and grow our
position and profile. We need to be investing in skills that equip us for future.
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One of my observations as someone who has worked in the sector for over 20 years is that
we often operate in a bubble. Desperate to protect what we do, but also so local and so
busy doing the doing that we forget that the success of most businesses is built upon their
networks

So what how do we arm ourselves with the right skills for the future?

Education, engaging our schools and universities to equip young people with the
skills they need in both business and values required to develop and run a social

enterprise
Investment readiness developing programmes of support that ensure social

enterprises are robust and investable either as delivers or innovators of services

Social Impact reporting and measurement to remain competitive we must
ensure that organisations can demonstrate their impact. Private sector organisations
are already alert to this and it is no longer enough to assume that because you are a

social enterprise this says it all, you will have to demonstrate this in the future
Strategies for collaboration and growth regardless of changes to EU
procurement policy scale will matter and operating in silos will reduce the
competitiveness of social enterprise and reduce appeal to investors and social

lenders
Procurement knowledge, skills and expertise preparing innovative and cost
effect tenders is a skill and organisations need to equip themselves with the right

people to compete effectively

Social franchising franchising could be an effective easy to scale a social
enterprise, replicating success and enabling wider geographical impact, promoting

collaboration, brand recognition and impact

Leadership - we need to invest in stronger cohort of European social enterprise
leaders who will lead and Influence: leading on Research and Development for social
problems, continuing to challenge and innovate

In conclusion
The British Council hopes that the vision we have consulted on and produced will help us to
consider what pressures are at play, what the future may hold for social enterprise, and what
action we can take to maximise impact and create strong, inclusive and prosperous
societies.

You might argue that if all business aligned itself more closely with a social enterprise the
world would be a better place. But I believe for many, profit will always be a driver for,
personal wealth and will win out against social values and social impact.

Private enterprises will become smarter about the ways they win business and win be
smarter about the ways in which they demonstrate their impact and thats a good thing, but
they wont fundamentally hold the values at the heart of a social enterprise.

I wanted to illustrate this with one example

The innocent foundation gives 10% of their annual profits to do good things with, mainly to
NGOs in the countries where fruit is produced. So far they have committed over 2.4m and
directly helped over 530,000 people.
Innocents mission is to make it easy for people to do themselves some good and to make it
taste good to and by getting natural healthy products to as many people as possible.
They have become the number one chilled juice brand in Germany, Austria and Denmark.
Innocent say We strive to do business in a more enlightened way, where we take
responsibility for the impact of our business on society and the environment, aiming to move
these impact from negative to neutral or (better still) positive
Innocent are now owned by Coca Cola but they have succeeded in maintain their values and
ethos but their size and scale with a giant like Coke backing them will make it increasingly
hard for smaller social enterprises to compete and demonstrate their impact.
So I leave you with one question is 10% of your profit enough?
Finally the British Council will continue to develop and grow its Global Social Enterprise
programme. On our Guardian partner zone you can read stories about social enterprise in
places as diverse as India, China, and Hungary.
Thank you and I hope this has helped to frame some of your discussion in your workshops