Tompkins Institute's 4th Annual Festival of Community Economics

  June 26-28, 2003
Sydney, Nova Scotia
Canada
ENTREPRENEURS AND COMMUNITY BUSINESS
BCA Group
Abstracts of Papers for 2003 Conference











 

 

 

 

 

 

 

 

 

 

 

 Updated June 05, 2003

THE ROLE OF SOCIAL ENTERPRISES IN WELFARE REFORM: CONTRASTING POLICY OBJECTIVES WITH PRACTITIONER PERSPECTIVES IN THE UK

Sarah Edwards, Colin Mason and Steven Pinch

The Labour Government in the UK is increasingly looking to social enterprises to provide welfare services as a means of modernising and reforming public services. This can be seen as part of its development of a ‘middle’ or ‘third’ way between the traditional left and right wings of the political spectrum. Social enterprise has been put firmly on the policy map in a series of papers from the Government’s Social Exclusion Unit. For example, PAT3, published in 1999, stated that “social enterprise can strengthen the social and economic fabric of deprived communities, not least by providing services that are not profitable enough to attract private sector firms. They can act as a bridge between a deprived community and the mainstream economy.” A national strategy for social enterprises was published in 2002 and as a consequence, the profile of social enterprise as an alternative service delivery mechanism has been significantly raised. However, the UK government’s view of social enterprise as a welfare solution is neither unproblematic nor uncontested. This paper examines the views of those people who are running social enterprises. The consensus of opinion is that social enterprise lacks the capacity, financial resources and, in some cases the will, to become an alternative service delivery mechanism in welfare. Practitioners on the whole see themselves as being part of the welfare safety net and have no desire to ‘transform’ the welfare system. There are also concerns about the appropriateness of the social enterprise model which government promotes and about its accountability, particularly to users. Thus, there is a fundamental dichotomy between social enterprise practitioners who see their role as complementary to other forms of provision, and government which sees social enterprise as a model for reforming existing welfare institutions. Thus, although social enterprise is emblematic of ‘postmodern’ attributes being displayed in a welfare setting, it is unlikely to form the basis of a new era in welfare.



ACTION RESEARCH AS ENTREPRENEURSHIP: THE CO-OPERATIVE CORPORATION AS AN EXPERIMENT
By Greg MacLeod, Charles Davis and Wade Locke

In “Making a Place for Community” Williamson, Imbroscio and Alperovitz criticize much of community economic development scholars and practitioners in that their proposed strategies do not have long term impacts on local economies. They call for community enterprises that “aim to root capital in place or change ownership patterns.” In this paper, I propose the model of a co-operative corporation that responds to this criticism. This model is proposed in the ISO sense (International Minimum Standards). It will consist of six requirements.

1. It must have an expressed primary purpose of worker and/or community good.
2. At least 50% of its corporate assets must be democratically controlled, one vote per person.
3. More than 50% of revenue must be generated from market sources.
4. It must be multi-functional.
5. It must have a stable relationship to one place.
It must have a policy of developing significant net equity which is indivisible and treated as community equity.


SAIOLAN: THE INCUBATOR CASE IN MONDRAGON.
Mikel Cid

For decades, the governments of western countries have promoted local entrepreneurship as an important element in their development agendas. Promoting job creation is a key factor in economic development. However, not every government has had successful results from their policies. Some of them have assigned the primary role in economic development to large corporations through policies of attracting external investment (Reed, 2002). Some places have achieved success following this strategy and have been able to create jobs for their citizens working in facilities belonging to foreign agents. But others have not.

As an alternative to the dominant exogenous model related above, there is the endogenous one. This is exactly the purpose of the local incubators: to help local citizens in creating their own enterprises.

The purpose of this paper is to show a particular case of incubator set up more than thirty years ago in the town of Mondragon in the Basque Country of northern Spain. Saiolan, which translated from Basque means “perform and work”, was set up as a result of the substantial loss of jobs in the industrial crisis of the early 1970’s in the Basque Country. It was established in 1971 within the facilities of the Polytechnic School (known today as the Faculty of Engineering) of Mondragon University. Saiolan, as an incubator, works in promoting new businesses in the area. They meet entrepreneurs, individuals or groups, and study the feasibility of developing their business idea. They test the ideas through their knowledge and experience, and once the idea is accepted as feasible, they provide funding and know-how to the business and a salary to the promoters. This relationship lasts for three years; then the business should be able to support itself. Since its establishment, Saiolan has had a great evolution in its organization and legal nature influenced by its notable growth, and today it continues to function as an effective bridge between the academic world and local enterprises.



THE UK SOCIAL ECONOMY: PANACEA OR PROBLEM?
Ray Hudson

There is a great deal of talk in the UK today about the restorative powers of the social economy. The non-profit sector, usually in the hands of the third sector, is imagined as a mainstay of future social organization in both the developed and developing world, set to co-exist with or substitute the welfare state, meet social needs in hard pressed communities, constitute a new economic circuit of jobs and enterprises in the market composed of socially useful goods and services, empower the socially excluded by combining training and skills formation with capacity and confidence-building, and create a space for humane, co-operative, sustainable, and ‘alternative’ forms of social and economic organization. While the optimists have come to see much of this as a good thing, a ‘taming’ of capitalist excess and exploitation and the return of the social and civic into the mainstream, those who are more circumspect warm that the social economy remains a poor substitute for provision through the market or welfare state, the return of the under-nourished and under-nourishing social. Either way, there is a distinct sense that the social economy will feature centrally in 21st Century capitalism.

This paper will seek to provide a summarize the key findings of three recently completed detailed research projects in the UK (which are set out more fully in Amin, A, Cameron, A and R Hudson, Placing the Social Economy, London, Routledge, 2002) and so provide an evidence-based account of the strengths, weaknesses and future potential of the UK social economy.


OUTSOURCING TO SERVICE PROVIDERS AS A CONDITION FOR COMMUNITY ENTREPRENEURSHIP

Presented by Jacques Carriere

Community business must learn from the world of big business how to overcome its inherent shortcomings. Entrepreneurship is one of the more important keys to economic development. But that does not mean that the entrepreneur works alone and without support. Typical entrepreneurs lead but they depend on a wide variety of specialized support systems. Entrepreneurship in the community business sector can be effective only if equivalent supports are accessible. Normally, the community business group is not able to employ accountants, lawyers, secretaries, and the normal infrastructure upon which conventional entrepreneurs depend.

This workshop will consider how this vacuum can be filled by using a process called “outsourcing to service providers” and the role of service providers. The strategy of outsourcing is now quite common in mainstream businesses but it is little understood in the domain of community business. Also, there is the additional problem that the conventional service provider may not be sensitive to the special needs of the community business. This workshop will consider the general topic of technical support and whether we should use conventional service providers or whether we need to develop a system of community-based service provider companies. We will also consider whether universities and colleges can partially fill this need of technical service provision. We will look at some cases such as New Dawn, which has acted as a service provider in some cases. Also we will look at CEDTAP as a national service provider.



SEEKING SUSTAINABLE BUSINESS MODELS FOR COASTAL COMMUNITIES: A CASE STUDY OF STAGES AND STORES ON CHANGE ISLANDS, NEWFOUNDLAND AND LABRADOR

Maureen Woodrow and Herb Bown

Adapting to new livelihoods since the moratorium on Northern Cod in the coastal communities of Newfoundland and Labrador has brought a variety of new ventures, many of which cater to the tourist market. One of these ventures on an island off the northeast coast is Stages and Stores, Inc. and Stages and Stores Heritage Foundation, a small business combining local arts and crafts with a foundation to preserve the heritage properties of fishermen of the Island. The business sells crafts made locally through a small craft shop on the Island, but also through the Internet, e-Bay and retail networks in Newfoundland, Canada and the USA distributor markets. A percentage of the profits from the business is passed through to the Foundation and several stages have already been restored. For Islanders both the Foundation and the business provide a form of part time employment. All artisans are local. Labour and material for the renovation of the stages and stores are locally supplied.

Although the business and Foundation are only two years old it has generated some much-needed enthusiasm. Tourists are excited by the dual concept and islanders are finding a new sense of pride in their culture and heritage. Already new ventures and ideas are being introduced, such as working heritage vacations, which provide new encouragement to a sustainable livelihood for the Islanders.


CREDIT UNION MERGERS: GOOD OR BAD FOR BUSINESS DEVELEOPMENT?

Presented by Gerard Perron

With an improved Bank Act, credit unions in Canada have opportunities to support business development in ways that did not exist before. Many say that credit unions must become bigger to respond to these opportunities. The purpose of this workshop is to address questions surrounding the new role credit unions are now in a position to play in community economic development. Should credit unions be an agent for community business development? What is the experience in communities across Canada? Do bigger credit unions have an advantage over small ones? If mergers do take place, how can the energy and talent of local committees and board members be retained?




NEW DAWN ENTERPRISES:
THE NUTS AND BOLTSOF THE PRESENT OPERATION

Presented by Jim MacCormack

New Dawn Enterprises Limited, incorporated in 1976, is the oldest Community Development Corporation in Canada and is a Founding Member of the Canadian CED (Community Economic Development) Network. It is a private, volunteer directed, not-for-profit organization dedicated to community building. This workshop will provide a brief overview of how New Dawn was established and some of its community-based accomplishments. The focus of this workshop will be to identify the various parts of the present-day corporation, and to examine how they are governed and how they ultimately work together to make each branch stronger.



COMMUNITY INVESTMENT FUNDS (CEDIF)

Presented by Doug Davison

This workshop will review the Nova Scotia programme of tax credits for community investment funds. A panel will be organized with representatives from three or four funds in Nova Scotia. Possibly we will invite a delegate from SIMA in New Brunswick to share their experience. A Nova Scotian government official will participate.
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