History and philosophy

The idea of social enterprise has a long history around the world, though under different names and with different tendencies.[5] Whilst many social enterprises will today accept finance and other forms of support from the state, they are essentially enterprises that seek independence from both the state and private capital through strategies that create a social economy. Early use of the terms 'social enterprise' and 'social entrepreneurship' can be traced to Beechwood College near Leeds, England (from 1978) where educators helped worker co-operatives develop social auditing, and at ASHOKA - a US Foundation - during the 1980s where Bill Drayton established a programme to support the development of social entrepreneurship.[6] Another formative influence was the Italian worker co-operatives who lobbied to secure legislation for 'social co-operatives' in which members with mental or other health disabilities could work while fully recovering. The first academic paper to propose worker co-operatives involved in health and rehabilitation work as a form social enterprise was published in 1993.[7] The scale and integration of co-operative development in the 'red belt' of Italy (some 7,000 worker, and 8,000 social co-operatives) inspired the formation of the EMES network of social economy researchers who subsequently spread the language to the UK and the rest of Europe through influential English language publications.[8] In the US, the work of ASHOKA was picked up at Harvard, Stanford and Princeton University, and each made contributions to the development of the field of social entrepreneurship through project initiatives and publications.[9][10][11] Social enterprises are often regarded - erroneously - as non-profit organisations. Social enterprise is characterized by open membership and goals widely considered to be in the community or public interest. By comparison, Non-profit status may include organizations with private membership. A useful perspective, created by social enterprise consultants across four continents after a review by Social Enterprise Europe, highlights three factors which frame the business philosophy of a social enterprise:[12] 1) The extent to which it engages in ethical review of the goods and services it produces, and its production processes; 2) The extent to which it defines its social purpose(s), and evidences its social impact; 3) The extent to which it democratises ownership, management and governance by passing control of its human, social and financial capital to its primary stakeholders (producers, employees, customers, service users). Their international definition states that: '"Not for Profit is a misleading criterion. It is good practice for social enterprises to provide incentives to workers, and social and community investors through dividends. Distribution of profits or payments to individuals should not compromise the enterprises' value statement or social objectives"'.[13] The field of social enterprise studies has not yet developed firm philosophical foundations, but its advocates and academic community are much more engaged with critical pedagogies (e.g. Paulo Freire) and critical trad tions in research (e.g. critical theory / institutional theory / Marxism) in comparison to private sector business education.[14][15] Teaching related to the social economy draws explicitly from the works of Robert Owen, Proudhon and Karl Marx with works by Bourdieu and Putnam informing the debate over social capital and its relationship to the competitive advantage of mutuals. This intellectual foundation, however, does not extend as strongly into the field of social entrepreneurship where there is more influence from writings on liberalism and entrepreneurship by Joseph Schumpeter, in conjunction with the emerging fields of social innovation, actor network theory and complexity theory to explain its processes. Social enterprise (unlike private enterprise) is not taught exclusively in a business school context, as it is increasingly connected to the health sector and public service delivery. The first international journal was established in 2005 by Social Enterprise London (with support from the London Development Association). The Social Enterprise Journal has been followed by the Journal of Social Entrepreneurship, and coverage of the issues pertaining to the social economy and social enterprise are also covered by the Journal of Co-operative Studies and the Annals of Co-operative and Public Economics. The European Social Enterprise Research network (EMES), and the Co-operative Research Unit (CRU) at the Open University have also published research into social enterprise. The Skoll World Forum, organised jointly by Oxford and Duke Universities brings together researchers and practitioners from across the globe. The Social Enterprise Mark was launched in the UK in 2010, as the international certification authority for social enterprise. A steering group made up of social enterprise leaders and supporters agreed that a Mark was important for the sector and together agreed its design, purpose and criteria. It was informed by the Social Enterprise Mark already piloted by Rise, the regional social enterprise network in the South West of England. The criteria were tested and approved for the social enterprise movement, by the social enterprise movement. The Social Enterprise Mark aims to establish social enterprise as the business of choice for everyone, using the Mark as a guarantee when a business is trading for people and planet. In 2012 [1] Social Enterprise UK launched the 'Not In Our Name' campaign when it learned that Salesforce.com, a global software and CRM company, had begun using the term 'social enterprise' to describe its products and had applied for 'social enterprise' trademarks in the EU, America, Australia and Jamaica. The campaign is supported by similar organisations in America (the Social Enterprise Alliance), Canada, South Africa and Australia. An open letter was sent to the CEO and Chairman of Salesforce.com Inc., signed by people and organisations from across the world, including Professor Muhammad Yunus, founder of the Grameen Bank and Nobel Peace Prize Laureate, and Richard Wilkinson and Kate Pickett, co-authors of The Spirit Level, which asked that Salesforce.com Inc stop using the term ‘social enterprise’.