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EXECUTIVE SUMMARY
Introduction and Context
1. The Government's Commitment to support social enterprise was set out in early 2007. This has been followed by a significant programme of investment in the development of the sector over the next three years.
2. This research was commissioned to help inform the Government's approach and spending priorities for the sector; in particular, its interest in promoting the start-up of new social enterprises in Scotland.
3. Carried out between April and July 2007, the study examines those initiatives in Scotland and beyond that promote social enterprise start-up. It maps out existing provision in Scotland, identifies the key gaps and challenges, suggests alternative approaches to enhance provision, and makes recommendations on future activity.
Social Enterprise Start-up
4. Taking into account all of its different forms, the best estimate is of 3,000 social enterprises currently operating in Scotland. However, there is limited intelligence available on the formation of new social enterprises across the country.
5. The start-up of social enterprises is a challenging process. Any attempt to understand this process must acknowledge social enterprise as a distinct business model and recognise the central role that social entrepreneurs play in this.
6. To enable social enterprises to flourish, an effective pipeline of support is required. This should offer different forms of intervention at different stages in an enterprise's development.
7. To date there has been no agreed rationale for, or approach to, assisting start-up social enterprises, or agreement on the circumstances under which various forms of support might best be provided.
Current Start-Up Provision
8. There are a growing number of support providers and initiatives across Scotland that contribute to the promotion, encouragement, and support for new social enterprises.
9. A review of current support arrangements suggests that:
- there is usually little differentiation or distinction between pre-start, start-up, and post-start support;
- there is a broad array and mix of support initiatives currently available;
- there is no national framework or programme to support social enterprise start-up specifically; and
- localised arrangements for co-ordinating support services vary considerably.
Delivering Start-Up Support
10. Current arrangements for providing start-up support in Scotland can best be characterised as fragmented, complex, uneven and inconsistent.
11. The research has identified a number of reported challenges, including:
- a lack of leadership and guidance, at both a national and local level, on support for social enterprise formation;
- a lack of connectivity between the various sources of funding, training, and advice;
- a geographic variation in the coverage of support across the country, and a cluttered/complex landscape of provision in lowland Scotland;
- a lack of knowledge about the scope and scale of existing start-up activity and where additional support is needed to stimulate or respond to it;
- limited support available to groups pursuing acquisition, franchising and buyout as a start-up path;
- inadequate resourcing of the start-up support providers and uneven coverage of subsidised provision to start-up groups;
- a lack of uniformity in relation to the mix of provision available, making it difficult for start-up groups to navigate the support system; and
- a lack of evidence generally on the quality of start-up support available, and limited evidence on what works well and why.
Comparative Approaches
12. While the importance of encouraging start-ups has been recognised across the UK, each administration continues to develop its own unique approach in response to local circumstances.
13. A review of the key approaches to delivering social enterprise start-up in each part of the UK indicates:
- an attempt to organise, rationalise, and simplify start-up provision across the English regions;
- an attempt to provide a specialist start-up service in Wales, informed by national targets; and
- an attempt to organise support initiatives within an integrated national start-up programme in Northern Ireland.
14. The emphasis on, and approach to, supporting start-up enterprises in Scotland does not appear to compare favourably to that in other parts of the UK.
Start-Up Interventions
15. There is an array of interventions that might now contribute to an increased rate of social enterprise formation in Scotland. These go beyond traditional forms of funding, training, and advice to the social enterprise sector.
16. Increasingly these interventions take a tailored approach. They often target start-ups in particular sectors (e.g. health) and localities (e.g. rural areas), or among specific client groups (e.g. young people).
17. There are various initiatives currently operating that highlight the potential to mobilise, motivate, and support higher levels of socially entrepreneurial people from which start-ups will emerge.
18. There is also an increasing experimentation with, and interest in, initiatives that seek to harness the brightest and best social enterprise ideas and accelerate their early development.
The Way Forward
19. Overall, the study identifies significant potential to strengthen the support available to start-up social enterprises in Scotland. It sets out a number of areas where further action should be taken by the Scottish Government:
- better intelligence on the scope and scale of social entrepreneurship and social enterprise formation across the country;
- clearer guidance on why social enterprise formation is important to Scotland and what might be achieved;
- increased action to raise the profile of social enterprise as a start-up option and to stimulate the aspirations of targeted groups;
- clearer agreement between support providers on how start-up support can best be organised and delivered;
- the introduction of an agreed form of accreditation to ensure the quality of publicly funded start-up support to the sector;
- information and guidance to start-up groups that enables them to understand and navigate the support available to them across Scotland;
- the increased availability of accredited training to support the formation of new social enterprises;
- the introduction of a new social enterprise start-up fund, which provides integrated funding (grants and loans) and business support;
- the piloting of initiatives designed to incubate, accelerate, and scale-up promising social enterprise start-up ventures; and
- strengthened arrangements to monitor and evaluate the impact of start-up support arrangements.
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