The ęsocial economył is no panacea for social exclusion






















November
2001From Economic & Social Research
Council
The ęsocial economył is no panacea for social
exclusion
Can socially excluded communities in areas of
economic decline trade their way out of welfare dependency?
That seems to be the assumption behind the promotion of
ęsocial enterprisesł by the Government - through the Social
Exclusion Unit - and by the European Union. These ęsocial
economył organisations are seen as important sources of new
work and new types of welfare provision at the local level.
But according to new ESRC-funded research by Professors Ash
Amin and Ray Hudson and Dr Angus Cameron, the UKÅ‚s social
economy simply does not have the capacity to support the
demands made of it as a solution to the problems of social
exclusion in marginalised neighbourhoods. Their study of a
range of community-based not-for-profit organisations in
Bristol, Tower Hamlets, Middlesbrough and Glasgow indicates
that:
 only 3 percent of UK social economy organisations operate
without public funds  rarely is activity in the social
economy driven by members of excluded communities, while jobs
are often poorly paid and unstable trading opportunities
in the very poorest communities are often severely
circumscribed, thus casting doubt on the capacity of social
enterprises to provide welfare services on a sustainable
basis.
The term ęsocial economył is commonly used to denote the
market for services sold by not-for-profit organisations in
response to local welfare needs not met by the state or the
private sector. It is increasingly viewed as a panacea for
hard-hit communities at the same time as decreasing the burden
on the welfare state.
But as Professor Amin comments:
ęPolicymakers should not look to the social economy as the
solution to problems of social exclusion in areas of economic
decline and marginalisation. The reality in most places is
that of an under-developed social economy. This is not
surprising since areas of marked social exclusion are
precisely those that lack the composite skills and resources
necessary to sustain a vibrant social economy.Å‚
Nonetheless, the research also reveals that in some places,
favourable economic, social and political conditions can allow
for the development of successful and innovative social
economy organisations. Such local success stories include:
 SOFA, a Bristol-based organisation, which refurbishes
second hand furniture to be sold at very low cost the
Bromley-by-Bow community health and medical centre in the East
End of London the Wise Group in Glasgow, which provides
paid in-work training for the long-term unemployed.
It also clear, however, that no model of best practice can
be abstracted from examples such as these to be transplanted
between places. Rather, success seems to be a product of
non-transferable place-specific factors, for example, an
active local civic culture, a supportive local authority, the
presence of key ęanimateursł, and a vibrant local economy.
The study concludes that social enterprises
in the right
places and with the relevant support
do have a role to play
in complementing provision and regeneration via the state and
the market. Importantly however, policy-makers may need to
question their assumption that the social economy can become
part of the mainstream. Many successful enterprises see what
they do as advocacy for another way of life, one based on
social commitment, ethical and environmental citizenship, and
work as a vehicle for self and social enhancement.
Professor Amin elaborates:
ęThis is the real strength of the social economy. It can
never become a growth machine or an engine of job generation.
Nor should we expect it to replace the welfare state. But it
can stand as a small symbol of another kind of economy, one
based on meeting social needs and furthering social
citizenship. As such, the real potential of the social economy
might lie in renewing democracy by encouraging
capability-building and grass roots participationł.