Victoria investing in social enterprise, other states being urged to follow suit

Social enterprise may be a widely accepted business model, but with a multitude of definitions its real meaning is subject to much debate. There is also lack of clarity as to where the sector stands in Australia.

“Any enterprise that is driven to make an impact and deliver products or services for positive social or environmental change, as well as financial sustainability, is a social enterprise,” says founder Geoff Gourley of social-enterprise ecosystem One10. “And these are growing at a rapid rate.”

Aiming to boost this growth, the Victorian government is investing money and infrastructure into building a social-enterprise sector. This move is welcomed by Social Traders, a NFP supporting social enterprises, as a $1.2 billion opportunity for the sector and the thousands of disadvantaged people it supports.

When Victoria released Australia’s first Social Enterprise Strategy this year, designed to bolster the sector, it required that 3 per cent of all contracts for the state’s Level Crossing Removal Authority be sourced from social enterprise.

“The Victorian government is leading the way in driving awareness of social procurement as a critical step to tackling disadvantage, and the corporate sector needs to follow,” says Social Traders head of market and sector development Mark Daniels.

“I expect other states and the Australian government to follow suit.”

Need for collaboration

He says the sector is emerging, and to maintain momentum it is important that all state governments take a stand for social enterprise. National research last year found that 34 per cent of social enterprises had been established for only two to five years, while nearly 40 per cent had been active for 10 years or more.  

“Federal, state and local government need to collaborate, share experiences and learnings, and work closely with the NFP,” says Gourley. “Also, social-enterprise leaders need to ensure we head in the right direction. This will result in the best policies being adopted and developing deep engagement with all stakeholders.”

While there has been commentary that social entrepreneurs are selfish, Daniels says negative commentary is easy to make, but it is important to be aware that social entrepreneurs have willingly made their businesses more complex by adding a social element. “There is a larger prospect of failure plus a high degree of difficulty compounded by enormous ongoing challenges – this doesn’t really sound like the natural stomping ground of narcissists to me.”

In Australia, and internationally, it is said there is often a financing gap in providing patient forms of capital for social enterprises in start-up or growth phase. “We believe Australia’s growing social-enterprise market requires a carefully blended mix of capital and support if we are to see a full spectrum of organisations realising their potential,” says Daniels.