Introduction
The social economy, and social enterprise, is recognised as a growing part of local economies and an increasingly important feature of public policy. There are two overlapping approaches to distinguishing the social economy: normative—as a set of economic activities with a social remit practicing particular values (Amin et al. Reference Amin, Cameron and Hudson2002; Laville Reference Laville and Amin2009), and legalistic—as a set of organisations with particular legal frameworks (not for personal profit, value driven) (Defourny Reference Defourny, Borzaga and Defourny2001; Smith and Teasdale Reference Smith and Teasdale2012). In the UK context, Pearce (Reference Pearce2003, p. 29) conceptualises the social economy in a legalistic sense, to include social and community enterprises, building societies, charity trading arms, consumer retail societies, credit unions, fair-trade companies, housing associations, intermediate labour market companies, local exchange trading schemes, marketing cooperatives, mutual cooperative companies, social firms, time banks, voluntary enterprises and workers’ cooperatives, while excluding non-trading entities. This is commonly adopted in the UK context where the normative values typically associated with the social economy do not map neatly onto the variety of legal forms these organisations may adopt (Smith and Teasdale Reference Smith and Teasdale2012). Together, these trading entities of the social economy are commonly labelled ‘social enterprises’. It is now widely accepted that social enterprises are politically, culturally and geographically determined (Teasdale Reference Teasdale2012). While Kerlin (Reference Kerlin2010) has attempted to show how institutional factors shape social enterprises differently in different countries, more sophisticated analyses are necessary to determine how ‘value based’ organisations are shaped by cultural values and economic and political factors at a local level. While some studies have begun to do this (such as Lang and Roessl Reference Lang and Roessl2011; Somerville and McElwee Reference Somerville and McElwee2011; Hatak et al. Reference Hatak, Lang and Roessl2016; Hazenberg et al. Reference Hazenberg, Bajwa-Patel, Roy, Mazzei and Baglioni2016), this work focuses more on individual organisations rather than social economies. Hence, we still do not know why some types of organisation are more prevalent in some areas than others (although see Sunley and Pinch Reference Sunley and Pinch2012). It remains necessary to understand how policies and institutional and cultural legacies shape social economies—understood as a collection of different types of social enterprise—at the local level (Moulaert and Nussbaumer Reference Moulaert and Nussbaumer2005).
Building upon a tradition of ethnographic research on social economies (Amin et al. Reference Amin, Cameron and Hudson2002; Graham and Cornwell Reference Graham, Cornwell and Amin2009), this study explores trajectories within the social economy (both of individuals and organisations) and the role of place-based institutions. Ethnography provides insight into the processes and meanings that sustain social groups and that are central to the construction and transformation of landscapes, so place-bound and place-making (Herbert Reference Herbert2000, p. 550).
In exploring the meaning and implications of difference in two city regions in the North of England, this paper shows that different localities nurture different relational assets (chiming with Hatak et al. Reference Hatak, Lang and Roessl2016), which develop in line with the economic climate, the nature of the institutions, and the community and culture. These relational assets in turn provide diverse incentives and opportunities for the social economy to develop and grow. As reflected in the experiences recounted by participants in this study, in Tyne and Wear the social economy was found to be more aligned to mainstream statutory provision, while in Greater Manchester this was not the case. By providing empirical evidence on sub-regional details, this paper emphasises that even within the same country there are contextual determinants that influence social economy trajectories. This shows the importance of situating place within a historical, cultural, institutional and relational perspective in order to understand the powers and constraints of context (Amin et al. Reference Amin, Cameron and Hudson2002, p. 122), viewing it as social formation (see also Johnstone and Lionais Reference Johnstone and Lionais2004) reflected in the variety of situated practices enacted. Therefore, a combination of organisation-specific and contextual characteristics shapes the practices. Acknowledging the presence of such differences and, most importantly, the implications they have in shaping the potential for social enterprise constitute important elements for a more nuanced understanding of local social economies (Moulaert and Nussbaumer Reference Moulaert and Nussbaumer2005) and the wider regional economies (Hudson Reference Hudson2007).
The paper is structured as follows: firstly, building on current research concerning the interrelation between place and social enterprise, this paper reflects on the economic practices and relations that constitute diverse economic geographies. The ethnographic approach adopted is then outlined and the findings are presented and discussed, indicating the diverse local cultures of social economy in the two city regions and the situated practices enacted by organisations as influenced by contextual factors. The paper concludes with some implications of this study and suggests areas for future research.
Conceptualising Difference
While it is recognised that social enterprise is conceptualised and practised differently between countries (Borzaga and Defourny Reference Borzaga, Defourny, Borzaga and Defourny2001; Kerlin Reference Kerlin2010; Teasdale Reference Teasdale2012; Jones et al. Reference Jones, Meegan, Kennett and Croft2015), previous studies (for example Kerlin Reference Kerlin2010) have tended to homogenise the nature of nation state and regions, neglecting the potential offered by a finer-grained analysis of difference. Indeed, we have less knowledge of more local determinants which shape social economies (although see Amin et al. Reference Amin, Cameron and Hudson2002) and their potential, indicating that the relationship between social enterprise and place needs further investigation (Muñoz Reference Muñoz2010). Significant academic contributions recognise the difference between and within areas in terms of incidence (Buckingham et al. Reference Buckingham, Pinch and Sunley2012); forms of organisation and membership (Borzaga and Defourny Reference Borzaga, Defourny, Borzaga and Defourny2001; Kerlin Reference Kerlin2010); reliance on private finance (Sunley and Pinch Reference Sunley and Pinch2012); funding environments, local authority engagement and support organisations (see also Somerville and McElwee Reference Somerville and McElwee2011; Sunley and Pinch Reference Sunley and Pinch2014); identities, values, relationships and governance (Lang and Roessl Reference Lang and Roessl2011); and trust and social cohesion (Hatak et al. Reference Hatak, Lang and Roessl2016). Building on these studies that recognise the importance of a context-sensitive approach (Lang and Roessl Reference Lang and Roessl2011) and of developing a fine-grained understanding of the importance of relational dimensions (Hatak et al. Reference Hatak, Lang and Roessl2016), this paper aims to focus beyond organisation-specific characteristics to the (wider) social economies in place.
Diverse economies theory (Gibson and Graham Reference Gibson and Graham2006) offers an interpretive lens to reading the heterogeneity of economic practices that can be found in different social economies. Considering the economy as a ‘heterospace’ of profit-oriented and political, ideological, emotional and ethical space of motivation and choice (Gibson and Graham Reference Gibson and Graham2006, Reference Gibson and Graham2014) enables the conceptualisation and exploration of the multidimensional nature of economic practices—as possibilities for various actions. So, for example, organisations have at their disposal a variety of organisational, labour, transactional, property and financial resources to draw upon in order to sustain their activities. Depending upon the mode of conduct considered (e.g. labour, transaction, or organisational), the social economy can be placed in different segments of the economy; that is using diverse practices to connect with markets and states in different ways (Amin Reference Amin and Amin2009), allowing for different ‘framings’, conceptions as to the meaning and role of the social economy in each locality. Ultimately, economies are “contingent outcomes of ethical decisions, political projects and sedimented localised practices, continually pushed and pulled by other determinants” (Gibson and Graham Reference Gibson and Graham2006, p. 3).
In order to fulfil their social, environmental and/or economic aims, organisations experiment with the variety of economic practices available to them, thus developing hybrid networks of relations with other social actors, organisations and firms. Indeed, a single organisation can be found to undertake multiple activities that shift across the diverse economy framework, inhabiting multiple economic spaces, and, as a result, creating various connections with disparate elements of the diverse economy (Healy Reference Healy2008). This notion of connectivity resonates (to an extent) with the concept of hybridisation proposed by Laville and Nyssens (Reference Laville, Nyssens, Borzaga and Defourny2001), as a process whereby (experimental) relationships are forged with state, market and the community as a means to strengthen the idea and purpose of social enterprise. The idea is that economic behaviour is ‘embedded’ in networks of interpersonal relations (Granovetter Reference Granovetter1985) and thus these relationships can be considered as a form of resource (Bathelt and Glücker Reference Bathelt and Glükler2005; Hatak et al. Reference Hatak, Lang and Roessl2016). In order to maintain social and material sustenance (Lee Reference Lee2006), organisations can use a variety of different practices.
Arguably, all elements of the diverse economy framework are instilled with cultural inflections and therefore the practices enacted also reflect contextual diversity. ‘What is available’ to organisations (that is the inflections of the various resources) is, in turn, shaped by where they are located. Interactions occur among actors, institutions and networks, which stem from the culture, legacy and history of a place: the contextual influences. Indeed, local differences in the ‘external’ institutional environment shape the opportunities and scope for social enterprises to develop and sustain their markets (Sunley and Pinch Reference Sunley and Pinch2014). The socio-economic context, the nature of the networks of support (Amin et al. Reference Amin, Cameron and Hudson2002) and the local government sympathetic attitude (Somerville and McElwee Reference Somerville and McElwee2011) have been noted as factors at play in the development and long-term success of social economy organisations. Attending to these debates, it could be argued that social enterprises utilise different relational aspects to access resources depending on the context in which they operate, and this is reflected in the different geographies of practice (Wall Reference Wall2012).
Empirical Investigation
Previous ethnographic approaches in the study of the social economy (for example, see Amin et al. Reference Amin, Cameron and Hudson2002; Cameron Reference Cameron and Amin2009; Graham and Cornwell Reference Graham, Cornwell and Amin2009) have uncovered the processes and meanings underpinning sociospatial life and detailing the role of place in the reconstruction or deconstruction of social life (Herbert Reference Herbert2000). This exploratory study draws methodological inspiration from the work of Amin et al. (Reference Amin, Cameron and Hudson2002) to provide evidence as to why place matters in studying the social economy. The ethnographic approach adopted entailed spending 6 months in each location, exploring the institutional and social environments in which organisations operate through interviews with key stakeholders, participation in events, interaction with local actors and immersion in the local socio-political and cultural contexts. The fieldwork was carried out between March 2010 and June 2011. While specific situations may have changed since the data were initially gathered, it is the intention of this paper to reflect upon the processes and meanings (Herbert Reference Herbert2000) that still speak to the interrelation between social enterprise and their contexts.
In each locality, a purposive sample of ten organisations was selected through snowballing, self-identification in publicly available material and membership of ‘local’ social enterprise networks. Operationalising Gibson–Graham’s framework, the sample reflected the heterogeneity of social economy activity, including organisations adopting different legal forms and operating in a variety of sectors. A further distinction was made to include an equal number of relatively new (existing for less than 5 years) and established (existing for more than 5 years) organisations, in order to compare and contrast experiences at different stages of development. The primary data collection was based on (semi-structured) interviews and unstructured participant observation (Gilbert Reference Gilbert1993). This enabled flexibility in responding to unexpected information and exploring issues in more details as emerging from the field. By combining interviews with observations and exploring perceptions, interactions and relations with others in the specific contexts, the objective was to gain insights into the dynamics of organisational development, culture, performance and achievements in place. While based in the organisations, the researcher engaged with all members of staff and volunteers, as well as beneficiaries and external stakeholders. Formal interviewsFootnote 1 were held with senior management, staff and volunteers as well as local stakeholders such as policy makers, local government functionaries and social economy intermediaries. The research questions explored such issues as the history and evolution of the organisation, the triggers of change and the strategies adopted to manage the relationship between the business and social goals. The analysis focused on identifying emerging themes, looking for patterns, causalities and producing a comparative evaluation of comments. The following sections present the ‘thick description’ (Geertz Reference Geertz1973, p. 3) of the (ethnographic) findings.
The Diverse Local Cultures of Social Entrepreneurship
In order to understand what determines the presence and development of particular types of associations and institutions in a place, it is important to consider the political, social and economic background to institutional development (Purvis Reference Purvis1990). The nature and variety of networks of relationships found in a place determines the generation of different ideas and shapes the activities of SEs. They also influence the emergence of different institutional choices and their development more or less independently from a national social enterprise policy agenda. As the subsequent sections show, the peculiarities of Greater Manchester have ‘framed’ the social economy as both an expression of a different way of doing business and a contributing factor of the local economy. Conversely, the characteristics of Tyne and Wear have led to a framing of the social economy as an actor in the welfare market: a means to create employment and stimulate small-scale entrepreneurship. The socio-economic characteristics of place (i.e. levels of deprivation, local economy and the people living here), the networks, the type of statutory support and recognition have contributed to create expressions of diverse local cultures of social entrepreneurship.
Socio-economic Contexts
Both city regions are characterised by high levels of socio-economic deprivation. According to the English Index of Multiple Deprivation (Communities and Local Government 2010), four out of ten local authorities of Greater Manchester are among the top 50 most deprived in England. Manchester ranks as the fourth (out of 326) most deprived local authority in England, Salford 15th, Rochdale 25th and Oldham 42nd. Arguably, the more deprived an area, the greater the demand for socially useful services and/or products (not covered by the market and/or local government). However, in Greater Manchester the presence of a large diversity of ethnic communities has also contributed to generate demand for a variety of different services, which is reflected in the number of voluntary and community organisations serving the ethnically diverse communities of Greater Manchester. The membership of the Manchester BME (Black and Minority Ethnic) network alone comprises 150 organisations working with diverse communities around the city and offering services to tackle language needs (160 languages spoken in Manchester’s schools),Footnote 2 and to access services that are not covered by mainstream provision.Footnote 3 This city region has always been the focus of migration, hosting one of the most ethnically diverse populations in the UK. The presence of different ethnic groups has triggered increasing demands for equality and recognition over the years, but also constitutes the basis for the generations of ideas, expression of diversity of values that ultimately contribute to shape the activities of groups focused on meeting social demands and diverse economic objectives.
Indeed, the type of people living in an area influences both the services needed: the types of products social economy organisations might offer and the types of social enterprises, which, in turn, reflect different needs, motivations and goals. The high levels of socio-economic exclusion, the ethnically and culturally diverse population and the presence of an ethically minded middle class have shaped the nature of the local social economy in Greater Manchester. Moreover, these factors have also helped form a diverse social economy in this city region, whose activities extend from tackling unmet social needs to articulating the demands for more sustainable and ethical production, distribution and consumption systems. It is indicative of this diversity that in conversations with Manchester’s stakeholders the notion of social enterprise brought forward comprises the following: “voluntary and community sector service delivery, co-op movement, and ethical businesses working to make Manchester greener, healthier and more equitable by developing and promoting economic working practices in line with their values” (notes from conversation with representatives from Cooperatives UK).
This variety in turn has enabled conversations in communities of difference (Gibson and Graham Reference Gibson and Graham2006). For example, almost all of the stakeholders interviewed noted an increased cooperation among the Chamber of Commerce, Cooperative movement and Greater Manchester Centre for Voluntary Organisation (GMCVO). As one noted:
[…] successful relationships have been built with other enterprise agencies and also other third sector partners […] (Former Director of Manchester Solution).
Moreover, in Greater Manchester, local and city region authorities recognised (at least nominally) “the creative potential of exchange and cross-pollination among independent and decentralised networks” (Association of Greater Manchester Authorities 2009, p. 39). And further stated: “It’s not enough simply to improve social capital—the type of networks operating and how they are used and connected is crucial. By supporting more conversation, connectivity, collaboration, and challenging ideas in a constructive environment, MCR has an opportunity to lead the way as a city region that really gets it right for the 21st century” (ibid.).
While Newcastle itself is not as deprived as Manchester, four of the five local authorities making up the conurbation of Tyne and Wear are within the 50 most deprived in England (Communities and Local Government 2010). The IMD data indicate that this city region experiences high levels of unemployment and low levels of income. Sunderland and Newcastle is among the 20th overall (28th and 29th in terms of income and 11th and 20th in terms of employment, respectively) most deprived local authorities in the country. Such high levels of income and employment deprivation have triggered an interest in social enterprise and generated demand for this type of activity, particularly focused on Intermediate Labour Market initiatives. The post-industrial legacy (i.e. move from manufacturing to service industries) shaped the labour expectation of much of the workforce that used to rely on big employers for work, wages and support, and consequently weakened attempts to encourage local entrepreneurialism. Community participation has tended to be through formalised channels of trade unions, churches and political parties, so the social economy could be said to be more managed (Hudson Reference Hudson2005) and aligned to policy priorities. Consequently, the channels through which social entrepreneurship tended to emerge were in relation to tackling need rather than activist-led ‘alternative’ proposals to economic engagement. Many organisations in Tyne and Wear stem from New Labour investment in the third sector or in response to the investment in regeneration programmes such as the Single Regeneration Budget (SRB), Local Economic Growth Initiative (LEGI) and New Deal for Communities, all targeting to some extent employment generation and entrepreneurialisation. As the Enterprise Programmes Senior Specialist at ONE North East pointed out:
Regionally there has been a significant amount of funding going into social enterprise development. ERDF [European Regional Development Fund] funding mainly at local authority level has a social enterprise element, including pre start up activities and also some social enterprise support. Then there is the LEGIFootnote 4 programme which has also a social enterprise element […].
Mohan and Wilding (Reference Mohan and Wilding2010) found that from the early 1990s onwards, the proportion of charities in the North East has grown significantly above the national average. Mohan and Wilding (Reference Mohan and Wilding2010) attribute this trend to the greater availability of public funding in the North East, due to the scale of need and, consequently, greater investment. Kane and Mohan (Reference Kane and Mohan2010) also found that nearly half (49%) of charities’ income in the region comes from statutory sources, a figure that is much higher than the rest of the UK (38%). Indeed, their analysis further indicated that one in five of all charities in the region work in fields associated with regeneration, employment, training and young people, much higher than the distribution for the UK as a whole (Kane and Mohan Reference Kane and Mohan2010). Indeed, Mohan and Wilding’s (Reference Mohan and Wilding2010) analysis also showed that while—during the 1990s—most newly founded regional charities were involved in education (45.2%), a decade later, those focused on the environment were predominant (36%), reflecting the increased support for low carbon and renewable energy that the Regional Development Agency ONE North East introduced, to create market opportunities in this field.
In a context of economic depression, low wages and income deprivation, the possibilities for organisations to develop a differentiated offer is limited to the parameters of local state support, as reflected in the nature and extent of the networks of support.
Networks of Support
In Tyne and Wear, the networks of support for social enterprise (i.e. Black, Ethnic Minority Community Organisations’ Network (BECON) and the Pentagon Partnership) had been established or appropriated by local government—formalising relationships between established organisations supporting the third sector and the various statutory agencies—rather than stemming from community action and alternative proposals. For example, the BECON and the Pentagon Partnership were formally established by statutory agencies—with the UK Home Office funding the former and an interface between the Voluntary and Community Sector and the Tyne and Wear economic regeneration partnership funding the latter—rather than being borne out of local civic initiatives. Moreover, and differently from Greater Manchester, many local stakeholders considered these networks as fragmented in their activities and impetus. Rather than being part of a cohesive strategy or vision for the sub-region, embodied—in theory—by the Compat (the agreement between government and the local third sector), the various thematic networks revolved around the core funding that sustained their activities up until the change in the UK government to the Conservative-led coalition in May 2010. Once the funding ceased, the networks begun to suffer, to the point that, as one commentator noted: “they are now falling apart” (Chief Executive, Newcastle SE).
One of the interviewees criticised the work undertaken by support organisations in the sub-region, highlighting concerns as regards to the role some organisations have had in ‘inflating’ the number of actual social enterprises, as a means to provide credibility to their own organisations. At that time, he argued, the focus was strictly in developing social enterprises (for support organisations to hit their targets) even when the social element had to be ‘constructed’. Since traditionally (social) entrepreneurship had been low, activism was lacking—probably as a consequence of the legacy of the industrial past, which guided civic expression through formal channels of representation (e.g. local councillors and trade unions), local government has taken the lead in guiding the development of the social economy in the city region.
An analysis of the GEMFootnote 5 UK figures shows that entrepreneurial activity in the North East began to grow from 2002 (Harding Reference Harding2006) onwards, following increasingly positive perceptions about entrepreneurship in general. Data from the Office of the National Statistics (ONS 2010) Annual Population Survey (2014/2015) show that self-employment in this city region is still, however, lower (7.4% of economically active people aged 16 and over) than the rest of Great Britain (10%). One of the local commentators noted: “Mostly they (social enterprises) have developed in the last 2/3 years here, from changes in the funding to the VCS [Voluntary and Community Sector] […]. Fundamentally there are two reasons for this: one is a greater understanding of the business model and two the change of funding to the CVS [Council for Voluntary Service]” (John King, Business Support Team, ONE North East).
Consequently, reflecting the needs of the local area and the availability of funding, organisations have grown more aligned to local policy priorities, in the absence of other types of support. The words of one of the social enterprise interviewees are indicative of this trend:
The drivers for our organisation have been the growth of social enterprise agenda and Local Authorities taking more notice of this model […]. Secondly the environmental agenda, in fact the previous government (Labour) transport minister had already considered car sharing schemes and car clubs. Thirdly, our commitment and expertise […] (Director, Newcastle SE).
In Greater Manchester, the numerous networks (formal and informal) are mostly activist-led, stimulated circles of relations, diverse choices of institutional forms, support and information sharing among their members and externally, outside the administrative area which contributed to develop a different understanding of social enterprise. For example, in conversation with representatives from Cooperatives UK, it was noted that in Manchester the presence of an established network of environmental activists (led by MERCI)Footnote 6 contributed to the creation of many organisations, including the so-called ‘green-eco-lifestyle based’ cooperatives, mostly located in those parts of the city where sympathetic residents supported their offer. In conversation with many stakeholders and local social enterprises, it became apparent that MERCI offered the physical meeting space for likeminded people and organisations. Many of the organisations in my sample came from this background, longstanding examples of social enterprise thriving from the renewed interest in environmental activities, such as locally grown produce, recycling and re-using products.
Many other organisations stemmed from political activism and, in particular, environmental activism. For example, in Manchester, the concept of social enterprise arrived in the form of ethically run and environmentally conscious businesses like the Manchester Futon Company, an organisation that since 1990 operated by the principle of planting a tree for every wooden futon frame made.Footnote 7 During the 1990s, despite (or because of) the high levels of deprivation, around 40 businesses were operating out of residential accommodations in Hulme, including Ethical Consumer Magazine and a supplier of organic fruit and vegetablesFootnote 8 (Ramwell and Saltburn Reference Ramwell and Saltburn1998). As indicated by one of the social enterprises:
The (name omitted) was at the centre of the Hulme community, responding to its needs directly or indirectly. It was the time when Hulme was called the People’s Republic as people were looking after each other. This (organisation) was an example of the many initiatives at the time going on here (Board member and founder, Manchester SE).
In the late 1990s, when the debate about social enterprise in the UK accelerated and the policy agenda was outlined, these organisations gathered around the Manchester Progressive Enterprise Network (MPEN), spearheaded by MERCI, and participated in the promotion of the social economy as a means to deliver maximum environmental, community and economic benefit. MPEN was one of the Community Networks for Manchester,Footnote 9 part of the Local Strategic Partnership, and was formed by over 50 community enterprises, workers co-ops and not-for-profit businesses. A local commentator noted:
With MPEN you could understand what social enterprise was the bike repairs, the recycling. But then when it started becoming a new term for any trading Charity or any trading public service then […] instead of being something that individuals are aspiring to, it becomes a method to delivery public service that sounds better than privatization […] (GMCVO).
This institutional variety has enabled organisations to rely on various forms of support, not solely monetary and/or commercial in nature, forging working relationships and alignments in conjunction with organisational needs. Different types of networks enable organisations to access resources and knowledge, and contribute to the creation of various types of organisational models (Johannisson et al. Reference Johannisson, Alexanderson, Nowicki and Senneseth1994; Lang and Roessl Reference Lang and Roessl2011; Hatak et al. Reference Hatak, Lang and Roessl2016). In Manchester, the tradition of self-help (mostly in deprived neighbourhoods like Hulme, but also among the longstanding black and minority ethnic communities) has strengthened community assets, the resources that have led people to guide the development of their communities, so that when the New Labour partnership working agenda was brought forward, in this city region a variety of stakeholders were able to become involved in articulating the needs and motivations of their representatives.
Statutory Responses
Despite their shared industrial heritage, it became apparent from this study that these two city regions displayed distinct approaches to social enterprise development. For example, social enterprise support was planned at regional level in the North East, while the North West adopted a sub-regional approach. Thus, while still in receipt of core regional funding (which ended in March 2008), the North East Social Enterprise Partnership (NESEP) was coordinating the work of sub-regional partners (i.e. local authorities) in developing social enterprises and ensuring similar methods throughout the region. Conversely, in the North West each sub-region had its own Action Plan and the role of the Regional Development Agency (RDA) was to ensure support for social enterprise. Moreover, a review of Regional Economic Strategies (RES) revealed varied regional approaches and understandings of social enterprises and their role in regional economies. For example, the North East RES stated that “particular consideration will be given to social enterprise as a solution to social and environmental issues, as well as a source of employment and wealth” (ONE North East 2006, p. 47). The focus of this region was on social enterprise as a source of employment, a route into economic activity (ibid., p. 96), particularly in deprived communities (ibid., p. 49) where the business start-up rate was low and the proportion of disadvantaged areas was high (ibid., p. 47). Conversely, the North West RES considered social enterprise to be part of the programme to improve productivity and grow the economy alongside other forms of enterprise (North West RDA 2006, p. 5). In recognising the role played in supporting communities, social enterprise alongside trade unions and faith communities were identified as important actors in developing community cohesion (ibid.), and providing high-quality local services through the development of local and regional compacts with local statutory agencies (ibid.).
Local authority response and intervention in social enterprise development contribute to shape the expectations posed on these organisations (Amin et al. Reference Amin, Cameron and Hudson2002; Somerville and McElwee Reference Somerville and McElwee2011). In Greater Manchester, the diverse institutional context, the continuity of the political leadershipFootnote 10 (which has guaranteed that policy approach was followed through) and its ambivalence towards the local social economy have favoured a more independent development of the social enterprise agenda locally. For example, by recognising the distinctiveness of the many voluntary and community groups, the local authority in Manchester has worked collaboratively with these organisations, providing funding for them to support the many diverse communities within the city. Manchester City Council was one of the first local authorities to produce a dedicated Community Engagement Strategy (2003–2008) setting out four key themes underpinning the relationships between public and voluntary and community sector organisations, namely governance, voluntary and community sector delivery, social infrastructure, and social capital and cohesion.
On the other hand, the local authority, by adopting a laissez faire approach towards other forms of economic engagement (particularly towards the new economic development agencies entering the social enterprise market), has enabled many organisations to respond ‘freely’ to new opportunities, adopting and modifying market-based approaches to fulfil their social/environmental aims. For example, in conversation, the former director of a Third Sector agency linked to the Chamber of Commerce disclosed that when developing the local Social Enterprise Action Plan, the Council made available the sum of £100 k and requested 3SE and MPEN to work together in devising a programme to support social enterprise development in the city, with little to no interference.
In Tyne and Wear, a number of social enterprises studied have emerged from New Labour investment in regeneration programmes (particularly the Single Regeneration Budget, New Deal for Communities and the LEGI) and Third Sector development, particularly as a means to provide employment opportunities for local people. For example, the Newcastle Partnership (i.e. the local strategic partnership) found that worklessness was the main priority in Newcastle and then instigated various actions to try and address this. This is reflected in the high number of organisations operating in ‘education and lifelong learning’. According to the National Survey of Third Sector Organisations (NSTSO), in 2010 more than half of the responding organisations in Gateshead (53%) and Newcastle (50%) and almost half in Sunderland (40%) mentioned ‘education and lifelong learning’ as being the main area of occupation, which is higher than the English proportion (28%).
The evolution of social enterprises in Tyne and Wear is shown to have been more ‘managed’ by statutory agencies, in terms of funding, support and endorsement. Many commentators have noted that regionally and sub-regionally there was a conscious effort to develop a ‘business model’ (i.e. setting up a social enterprise as a means to get people employed and at the same time develop a business), and thus funding and support were targeted to its generation. In order to co-ordinate the activities of the various support agencies and manage the numerous funding streams with the purpose of stimulating enterprise creation, ONE North East developed an ‘Enterprise Framework’ which sought to raise awareness and interest in the enterprise culture by building the capacity of individuals to start a business and developing the support offer accordingly (CLES 2008).
Each element of the framework saw the contribution of specific teams within ONE North East coordinating national and local funding and drawing on the expertise and presence of support providers. This coordinated effort and significant public investment have had an effect on the structure of the third sector locally, partly in terms of the areas of activity delivered by third sector organisations and partly in terms of volume, often resulting from the push to generate more social enterprises as a measured outcome for support agencies’ funding. One commentator noted:
There is rhetoric of supporting social enterprise as a kind of panacea for creating regeneration. The reality is that it’s crumbs on the table. Often, an agency will be concerned with outputs and they will come with social enterprise but not immediately. You have to build on the soft capacities first before dealing with hard outputs (North East Social Enterprise Partnership).
The local government has been instrumental in directing the development of the dominant notion of social enterprise as a means to solve problems, operating as an adjunct to the mainstream in supporting the most marginalised of society. Within a context of scarce economic diversity, where reliance on public funding is higher than other regions, inevitably, much of the development has been aligned to policy priorities.
In summary, different economic geographies have shaped the diverse expectations of the role of social enterprise and their institutionalisation (Mendell and Nogales Reference Mendell, Nogales and Noya2009). In Tyne and Wear, this was aligned with policy priorities and dependent on these, whereas in Greater Manchester this was rooted in a culture of political activism, recognised as parallel to the mainstream, with various degrees of vicinity and alignment to it. Each locality was found to offer different incentives to organisations, both in terms of institutional choice and opportunities for development, as reflected in the experiences recounted by the organisations part of this study.
Situated Practices: The Contextual Factors at Play in Social Enterprise Development and Consolidation
Inception Years
Three factors appear to feature recurrently in contributing to shape organisational development, more or less in line with their ethos, in the early years of their existence: the personalities of key individuals involved, the type of funding and the availability of support. The interplay of these variables contributes to influence the developmental trajectories of organisations, by opening up differing opportunities for them to become more established and operate in line with their aims.
Firstly, in relation to the personalities of those involved, their commitment to the cause and their ethical zeal drives the organisation in developing a shared vision and begins the process of translating it into practice. As one interviewee noted:
I would also say that having everyone working with a collective vision and as part of the overall team is the main thing that keeps us all singing from the same hymn sheet (Director, social enterprise, Manchester).
However, while this is common to most organisations in the two case study areas, the emphasis on the importance of appropriate skills, that is the expertise in spotting opportunities, is more common among those organisations that want to improve relationships with statutory bodies to deliver contracts on their behalf. This trend appears more evident in Tyne and Wear, where the reliance of organisations upon statutory support is stronger compared to that found in Greater Manchester. For organisations initiated as statutory-led ventures, the presence of expert staff, officers seconded to the organisation in order to deliver services, acted as a great advantage. As noted by the Chief Executive of a social enterprise in Newcastle:
I have been working in the East End for 21 years. I have experience in working for a local authority […] so of dealing with officers and political networks as well as knowing the system and how to navigate in the networks of different sectors [public, private and community], which also means knowing the funding process and how to access it.
This experience lends expertise, guidance and the opportunity to develop important links among different agencies, operating in the same area of work. As Laville (Reference Laville and Amin2009) notes, familiarity with institutional channels of financing constitutes an advantage for many ventures during their start-up phase, albeit often resulting in the promotion of those projects that are more likely to gain support from the ‘important’ stakeholders (e.g. local funders, like councils or other statutory authorities) at the expense of other ideas.
Secondly, the type of funding organisations can rely upon from the outset contributes to shape their development in different ways. Most organisations manage to survive with very little funding in their initial years. Overheads are low, since there are virtually no paid members of staff, and the founders work overtime, borrowing privately or getting small grants and donations in order to continue operations. At this stage, the availability and type of funding organisations can rely upon contributions to devise a ‘product’, shape their offer and consequently their development. Essentially, the less constrictive the funding, the more able the organisations are to develop in line with their ethical aspirations. Many organisations in both case study areas benefited from UK National Lottery funding during the start-up phase. For many organisations included in the Greater Manchester sample, grants and donations play an important in the early days, particularly among those stemming from community action.
The [organisation] was at the centre of the community, many people were turning up and helping out […] it also received lots of support and donations. We got the British Heart Foundation donating electrical goods which we then sold and made some money with. The Housing developers got us some free new carpet we also sold […] (Founder of social enterprise in Manchester).
Conversely, in Tyne and Wear, where most organisations researched were formed by intervention from statutory bodies, the pathway to development is determined from the outset. The approaches to fundraising tend to reflect the availability of public funding rather than promoting alternative ways to gather resources.
Finally, the third factor that contributes to social enterprise development in line with its social goals is the support available to organisations in the early days. This support in turn is underpinned by the recognition of the validity of what organisations do and what they stand for, and thus translated into different forms of endorsement which can facilitate progression in line with ethos, in so far that the recognition focuses on the share value that joint working can generate. Local networks play a crucial role in connecting emerging initiatives and enabling a process of skills and expertise sharing that helps organisations formulate their offer independently from statutory intervention. However, while in Greater Manchester these networks have borne out civic activism and thus nurtured a culture of self-help, in Tyne and Wear support and recognition from statutory partners appear to play a more important role, leaving little space for experimentation beyond recognised policy priorities and tested approaches. Nevertheless, local authority endorsement can also secure funding and create a more level playing field, building working relationships with other partners. This is of crucial importance in a context where alignment to policy priorities is required for organisational survival. For example, recognising the contribution that some organisations can make to local communities and the environment, many local (Newcastle) Councillors from different political party affiliations have lobbied in favour of piloting the first car club in the Jesmond area of Newcastle. In the director’s words:
It was off the back of this pilot and many hours pounding the streets flyering and attending Resident Association Meetings etc. that we managed to build up some credibility around the car club concept—and the rest is history […] Newcastle City Council have been superb in supporting us by taking upon local residents to run their car club rather than contracting with a commercial operator from London!
The recognition granted by the Local Authority has also enabled this organisation to develop a dialogue with Nissan (based in Sunderland) to trial some of the new Leaf Electric cars. Being seen as a credible partner for joint delivery has given the opportunity to the social enterprise to capitalise from a (relatively) more level playing field, building working relationships with other partners, that while potentially not fully disinterested (i.e. Nissan can benefit from marketing and CSR) it fulfils the ethos of the social enterprise to reduce car use and improve more environmentally responsible transport.
In summary, in the inception years, organisations in Tyne and Wear have a clear understanding that their potential is shaped by their ability to attract statutory funding, and thus they tend to emphasise the professional skills set of those leading the organisation and the alignment to policy priorities from the outset. Conversely, in Greater Manchester, the evidence underlines the relevance of informal networks and the varying mix of resources that organisations feel they have at their disposal, both monetary and in-kind.
Continuation Years
During the consolidation phase, a number of factors—combining social enterprise-specific characteristics with external influences—appear to contribute to shaping the diverse possibilities for organisations to operate in line with their ethos. Firstly, the ethical steadfastness of organisations is important to develop a culture that ensures that the values are shared and lived. The notes from a conversation with one of the social enterprises in Manchester indicate this:
When it comes down to it, it is all of us, from trustees to volunteers who define the relationship between our goals and our social/ethical aspirations. […] It is possible to be entrepreneurial and fulfil a social mission, but it depends on the staff motivations and their good will.
Secondly, it is important that the values also permeate the ways of working, which in turn enables organisations to obtain recognition with external partners and/or customers. For example, one of the organisations’ employees noted:
People coming to the shop want a trusted brand; a trusted provider where they know what they are getting is certified. […] It is fundamental to always keep a close eye on things, monitor and in this business keep on top of information. In the shop for instance, it is about always being informed on what happens, take overs. Therefore it is fundamental to always monitor sources, of all types not only products sold but those used within the shop, down to the cleaning products. Our clients are well informed, so it is important to keep up to date (Manchester social enterprise).
This recognition underpins customers’ buy-in and potential collaborations in service delivery, ensuring that there is viable product for the right market.
Organisations in Tyne and Wear tended to emphasise a process of accounting for the values they stand for, monitoring performance against them. Some organisations ensure that the recruitment process balances the need for skills and values, thus selecting people on the basis of their experience but also their ethics. The words of the Chief Executive explain further:
The key is being open about what we do. Being responsive, flexible and willing to change, but the value set of the organisation is what remains still. The drive is to enable the organisation to meet people’s needs. It is also key to construct the team that makes the organisation. I have learnt the lesson, skills are necessary but mostly it is about values, as these are those that drive the change. This is now reflected in our recruitment process […] (Newcastle social enterprise).
The process of articulating clearly what an organisation stands for, the values, was also found to support the development of a shared understanding of what the organisation stands for both internally and externally, which, in turn, supports the development of strategic alliances around the central focus of the organisation. It is indicative of this that a homeless charity in Newcastle has built a strong network of strategic alliances around the central focus of the organisation. Since the late 1990s, this social enterprise has ensured its presence in all the main Newcastle and North Tyneside groups such as:
[…] the Newcastle homeless prevention network; the Newcastle Primary Care Trust mental health and housing group, the North Tyneside Drugs and housing strategic panel; and the North Tyneside supporting people core strategy group (Newcastle social enterprise).
Moreover, reflecting wider shifts in the homelessness agenda, the organisation began to look beyond the locality, as well as beyond the provision of only accommodation, and to participate in a wider, national debate on ways to tackle the homelessness issue. The Chief Executive of this social enterprise sits on the government select Committee on homelessness, for instance.
These strategic alliances serve as a means to stimulate joint working among organisations with similar aims or to influence statutory authorities in the design of services that can benefit communities (e.g. public health authorities). For example, in the words of the director of one social enterprise:
Opportunities come from linking up the issues affecting the East and the West (of Newcastle) linking up with other programmes like the health and social care. […] we have an interest in working cooperatively with Sure Start centres as we share complementary activities and the relationship is now being developed further in order to provide a more comprehensive approach […] (Newcastle social enterprise).
During the continuation years, as organisations affirm their delivery and become involved in complex relationships with funders, employees, partner organisations, statutory requirement and beneficiaries’ needs, they tend to adopt more formalised management structures and policies that enable them to work in increasingly competitive markets. For example, the Chief Executive of a social enterprise rooted in a programme to regenerate the east end of Newcastle joined business training programmes, such as the RDA-funded ‘Coaching for Growth’, to familiarise with result-oriented management techniques, measuring efficiency and profitability. This new knowledge was then transferred into the organisational structure. It changed its legal status and evolved into a Company Limited by Guarantee, with a re-engineered provision through a sister company. However, this is not tantamount to becoming focused on profit maximisation, often rather a survival strategy.
In Greater Manchester, organisations tended to emphasise deliberation as a means to embed values, thus enabling a shared decision-making process and through this practice also reworking and redefining the nature of the product, alongside identified needs or customer preferences. The example of a second-hand furniture provider aiming at recycling and selling low-cost items to people in financial difficulties is indicative of this reflection. Questions about the stock have emerged through the years, particularly as to whether the principles of recycling should be or should not be prioritised over the principle of providing people in need with affordable furniture. Essentially, some members of staff wanted to buy new furniture (e.g. beds and white goods) in order to fulfil its social aim without penalising or marginalising its customers, and avoid the creation of a ‘market for the poor’. However, other members of staff see the move to purchase new items as a drift from their environmental aim to recycle and reuse unwanted goods. This debate, on-going at the time this research was carried out, formed the basis of the democratic, ethical decision-making process. All the proposals are vetted on the basis of the ethical framework of the organisation, and in seeking evidence on whether this route should be pursued or not, all members of staff and the board participate in the wider debate about organisational values.
In summary, in the continuing years, the differential impact of context is reflected in the diverse practices organisation enact either through collaboration, strengthening working relationships developed in time or focusing on strategic alliances. What is common in both areas is the fact that these organisation-specific characteristics alone are not sufficient to support the consolidation process in line with the social aims. Indeed, the very nature of the local economy determines the viability of the product offered. The fragility of the Tyne and Wear economy (Tyne and Wear City Region 2006) generates demand, but does not lend itself to entrepreneurial experimentation. The local government is the main customer hence why it is important to align product to policy priorities (see also Sunley and Pinch Reference Sunley and Pinch2014) and funders’ requests for more social services, training provision for unemployed people, or for products that could otherwise not be afforded in the mainstream. However, this raises questions of market saturation and/or ability to absorb the social enterprise offer. Only in areas like Newcastle where the local economy is more dynamic, the offer is more diverse. This trend is also found in Manchester where the local economy is more dynamic and where pockets of ethical middle class people have generated and sustained demand for various (ethical) products while connecting local issues to wider causes. In summary, what a social enterprise can achieve depends on the context from which they emerge and operate.
Concluding Considerations
The findings from this research reveal that even within the same country there are contextual determinants that influence social enterprise developmental trajectories. Each locality nurtures different relational assets, depending on the nature of the institutions and the community and its culture. These relational assets in turn provide diverse incentives and opportunities for the social economy to develop and grow. This paper provides evidence that different relationships are used as assets/resources by organisations. In one place (Tyne and Wear), the social economy developed as a function to mainstream provision and organised accordingly, with organisations more dependent on statutory support but which develop in line with the policy priorities of their locality. In another area (Greater Manchester), the social economy was found to be rooted in a culture of political activism and thus recognised as existing in parallel to the mainstream provision. This means that in some cases organisations cooperate with statutory agencies to deliver services, while in others they operate in competition with the mainstream—thus with more space to manoeuvre. By reflecting on the context of institutions, culture and legacies that condition choice and relations in and of social enterprise, this paper provides some cultural insights into a relational perspective, contributing to the debate around the relations between the spatial and the social (Yeung Reference Yeung2005), broadening its understanding to the historical, cultural legacies of the place in which social enterprises are embedded.
The history and legacy of a place are important to understand the future potential of any place “without falling into the trap of equating path dependency with a deterministic iron law of history” (Hudson Reference Hudson2007, p. 1158). Acknowledging different legacies enables an improved understanding of the developmental possibilities of a place. Indeed, each place is different in providing opportunities for social enterprise to emerge and to consolidate as the nature of networks of support, institutions and culture differ from place to place. This finding enhances our empirical knowledge of social enterprise and its potential impact, by reflecting on the importance of a more nuanced understanding of the context, not only in the UK, but also in other countries. This geographical variation and differing potentials are often neglected in policy, which instead tends to privilege universalised measures and uniformity of expectations. It could be argued that a differentiated approach in policy development, sensitive both to varying historical trajectories and constraints and possibilities these represent for future development, is required with better academic scrutiny of the development of appropriate policies. Furthermore, there are at least three areas of geographical enquiry on social enterprise that would benefit from further research. Firstly, more systematic, comparative research is needed to better understand how context matters. While this study focuses only on two city regions, more ethnographies of the social economy would help further our understanding of the variation in social enterprise experiences, expectations and outcomes across different contexts. Secondly, more research is required on the role of the social economy in the creation of new markets, as economic spaces, or spaces of empowerment, that is social spaces. Thirdly, further exploration is needed on what constitutes an enabling environment for social enterprise sustainability in respect of their local determinants.
Acknowledgements
The author is very grateful to Simon Teasdale and Michael Roy for their helpful comments and the anonymous reviewers for their important feedback.
Funding
This research was funded by the Economic and Social Research Council (ESRC) CASE studentship award between the University of Durham and the (now closed) North East Regional Development Agency—ONE North East.
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