by Jonathan McAlpin, Director of Operations, UCIT

The global economic crisis is hitting Northern Ireland with growing unemployment, cuts to wages and pensions, increasing energy prices and stress in many of the business sectors across the region. However, this is a time of opportunity for the social economy.

The social economy flourishes where there is market failure, bringing employment to those most marginalised in society and creating solutions to some of our most pressing social problems. Ultimately, the social economy is founded on a passion to create positive social change.

The big question is how can this be achieved?

We need vision, leadership and to be outward looking. There is a tendency however to compartmentalise activity and create silos. Sitting within our social economy silo, we tend to speak only to those in government, who we have grown comfortable with as the providers of grants. This must change. We need to be more innovative, outward looking and embrace the opportunity to work with our private sector colleagues to bring about social change. We need the sort of vision and leadership shown by the Nobel laureate, economist and social entrepreneur, Professor Muhammad Yunus.

The vision of Professor Yunus led him to establish Grameen Bank, a micro-credit operation lending to the poorest in society in Bangladesh, helping them to start micro enterprises. The success of Grameen bank has fostered the creation of a number of social businesses under the Grameen brand, including Grameen Healthcare, which operates 48 clinics across Bangladesh bringing healthcare services to people in poverty; the Grameen Eye Hospital, which performs 50,000 eye operations and 10,000 cataract operations per year; Grameen Danone Ltd, a joint venture with the French food giant Danone which produces nutritional yoghurts tackling malnutrition in Bangladesh and Grameen Veolia Ltd., a social business set up as a joint venture between Grameen Healthcare and Veolia Water to bring affordable drinking water to inhabitants in rural Bangladesh. Northern Ireland may not face the same problems of extreme poverty, starvation and diseased water, but the principle is the same. Our challenges are about reducing energy costs, increasing employment opportunities and caring for those most vulnerable in society.

At the recent ‘Good Deals’ conference in London, the Minister for Civil Society, Nick Hurd, spoke of the need to connect private business and social enterprise to bring about social change. He highlighted government plans to open up the public sector services market through changes in procurement, which will enable charities and social enterprises to increase their role in delivering public services on a “payment by results” basis.

Although much of this could be dismissed by some as Tory rhetoric, there is an important point here that more intelligent commissioning can bring about efficiencies in public service delivery. Procurement represents an opportunity for the social economy to acquire new business, generate new revenue streams and deliver much needed services to those in the most disadvantaged communities in our society.

With political leadership, the introduction of social clauses can be brought into the procurement process. This will encourage greater collaboration between the private sector and social enterprise, which, in turn will improve efficiency in public service delivery. Social enterprises can ensure that services reach the most vulnerable in society and that profits are reinvested for social good.

The social economy is intertwined throughout the fabric of society and hence has a key role to play in providing the infrastructure that is needed to rebalance our economy and foster economic growth.

Good local examples

Indeed, there are many local examples of how this works in practice. The Enterprise Northern Ireland network provides physical, industrial infrastructure, as well as professional business training and advice, to nurture the growth of private enterprises; the School for Social Enterprises offers professional, management and leadership support to develop the management capacity of the social economy and UCIT, as the leading social finance organisation in Ireland, brings investment into the sector.

The challenge for 2012 is for the social economy to raise its vision. The entrepreneurs within this sector need to show leadership by engaging with their private sector colleagues to play their part in rebalancing the economy.

The Programme for Government highlights that the social economy has an important role to play but, critically, if this sector is to make its mark it needs investment.

The Social Investment Fund needs to be an investment fund and not another grant programme. We need to look at innovations such as the Private Equity Foundation in England, which has brought private equity and third sector professionals together, merging the worlds of business and charity to bring about positive social change.

If we are really going to make a change in 2012, the social economy, private sector and pubic sector must work collaboratively. We must be innovative and the challenge to the social economy is to raise our vision and show leadership to bring about positive change. Are we up for it?