Social Enterprise & Innovation Support Ecosystem in WA

This blog post outlines Pollinators current thinking on what’s needed to better enable the growth of social innovation and social entrepreneurs in Western Australia. We think the same or increased resources could be invested more wisely by government and business to have greater effect. The problem social innovation and entrepreneurship are trying to address is the need to have new and more creative, sustainable approaches to create positive social outcomes and new, better ways to solve existing social problems (e.g. homelessness, pollution of our rivers, early childhood education). This need for more innovation, entrepreneurship and creativity in solving social problems has been widely identified as a need by government and business, and the ultimate beneficiaries of taking a more holistic and strategic approach would be those who are directly suffering from social disadvantage, the ecological systems upon which our society and economy depends, and ultimately future generations living within WA.

Below we’ve outlined some suggestions for:

a)    What an ideal ‘social enterprise and innovation support ecosystem’ could look like,

b)    What actions would need to be taken to move from the current situation to that ideal situation.

Some disclosures upfront!

• Pollinators delivered some Social Enterprise Fund (SEF) workshops funded through the State Government,
• Pollinators has received funding through the SEF and applied to the Government to further develop this sort of ‘ecosystem’ in the Midwest,
• Pollinators are modelling what we are also advocating for in this letter, and have a comprehensive 3-year program outlined for creating this ‘support ecosystem’ in the Midwest that could be scaled or replicated.

Social Enterprise (defined in this draft Manifesto) has been recognised by government, business and charities as an increasingly important, effective and attractive means to deliver positive social change in our communities. In WA recommendations of the Economic Audit Committee Report sector reform initiatives led by the Partnership Forum both aim to increase the level of innovation, investment and entrepreneurship in the community sector. Government has subsequently focused investment into this area through the Social Enterprise Fund (SEF) and to some degree the Social Innovation Grants (SIG).

At the same time, though in some ways completely independently, a new breed of young social entrepreneurs have started social enterprises e.g. Dismantle and in some cases started social enterprises that support other social entrepreneurs e.g. Social Innovation in WA (SiiWA), Pollinators Inc. Other broad trends supportive of this focus on innovation, entrepreneurs and social enterprise had been through existing charities seeking new ways to generate revenue independent of grants and philanthropy, and in parallel many corporate sponsors, philanthropists and foundations have been seeking opportunities to ‘invest’ in generating measurable social and financial returns rather than simply ‘donate’ and feeling good that they have done so (with limited attention to the outcomes achieve through the donation).

The convergence of these trends makes the Australian and WA situation a ‘perfect storm’ for the rapid growth of social enterprise. This similar set of conditions existed in London and the UK in the early 2000s and has resulted in a proliferation of new enterprises, investment funds, legal structures, support organisations, publications, private sector procurement policies and more. Victoria has shown leadership in Australia with support organisations and programs in place such as Social Traders and their Crunch program, and the School for Social Entrepreneurs launching and growing in Australia from a Melbourne base. There are many cases and examples of other initiatives from governments (e.g. The Australian Centre for Social Innovation), academia (e.g. Centre for Social Impact), and business (e.g. Westpac Foundation) that are contributing to this ‘movement’ around social enterprise and innovation.

Pollinators has been an active learner from the situation in the UK, US, other states in Australia, and in progressing the development of social enterprise in WA. Based on our understanding and experience we believe creating the ideal conditions to enable growth of the social enterprise ‘sector’ and individual social enterprises needs an ‘ecosystem’ approach. By ecosystem, we mean a range of initiatives and programs that are inter-related, that are partially ‘designed’ and planned but also partly ’emergent’ (responding to local, immediate needs), that generate synergies across and between activities, and that mean there are a range of options and opportunities so that entrepreneurs and enterprises can choose ways to engage that suit them best.

This ‘ecosystem’ approach is not unique to the social sector. It’s a commonly-used term and concept, and was recently used by PriceWaterhouseCoopers and Google when investigating the ‘Tech Startup’ context and trends across Australia. In WA, this ecosystem approach to social enterprise and innovation would mean:

• Social entrepreneurs and enterprises could easily contact someone who could provide them with advice, support and a structured way to develop and grow their new idea or existing venture, no matter what ‘stage’ it was at,
• Existing social-mission organisations would be encouraged and supported to investigate, pilot and scale more efficient and innovative approaches to achieving their mission,
• Government was investing tax payer’s money in a way that was demonstrably leading to better social outcomes and providing inspirational case studies of how our communities are being improved,
• Business and investors were able to wisely contribute capital and expertise into the most promising and effective ventures through working in cooperation with government, intermediaries and peak representative bodies,
• There were places, events and programs dedicated to enabling collaboration across and within sectors to address major, complex, ‘messy’ social challenges.

In WA, a comprehensive approach to a support ecosystem for social enterprise and innovation would include:

1. Support for a more enterprising culture amongst organisations and institutions leading social change
2. Resources for capacity building support for social enterprises
3. More open markets and procurement channels
4. Funding, finance and investment across the business lifecycle
5. Investment in research, benchmarking and impact measurement
6. Focus on geographic or thematic areas to lead the way in demonstrating innovation
7. Physical and online ‘hubs’ where delivery of support and knowledge-sharing are possible

Explanation of each of these (except for 6 and 7) initiatives is in the attached Manifesto. To provide some examples of what that would look like, here are some existing examples in WA:

1. The Midwest’s “Goodness Awards” or National “Social Enterprise Awards” both celebrated and raised the profile of social enterprises, entrepreneurs and innovations,
2. Social Traders in Victoria or Pollinators Inc in WA work independently of government as ‘intermediaries’, offering direct support through newsletters, online resources, coaching, mentoring, training, development programs as well as connecting entrepreneurs to more specialised support,
3. Parramatta City Council and Brisbane City Council have adopted social procurement policies that give social enterprises a better chance of winning contracts to deliver services (while at the same time solving other social challenges)
4. In the UK for social enterprise (or, interestingly, in the US for tech start-ups) there exists a mix of micro-loans, grants, government-backed investment funds, competitions, investment funds that offer finance for ideas, early-stage ventures, existing ventures wishing to innovate and ventures ready to scale
5. In Victoria there has been investment in ‘finding’ all the social enterprises, and there is research being done or proposed by Australian universities to measure the impact of social enterprises relative to each other, relative to the investment, and relative to other means of tackling the same social challenges
6. In the UK “Spark Challenge” was a competition focused on finding the best social enterprises that were solving homelessness, and to invest in those good enterprises. The Midwest of WA has a large number of entrepreneurs and enterprises, and could be a focus as a ‘social enterprise Silicon Valley’.
7. Perth’s Spacecubed, Geraldton’s CityHive, Melbourne’s Hub are all hotbeds for social innovation, enterprise and entrepreneurship. All have delivered remarkable returns on relatively limited government investment.

Pollinators recently completed the planning for how this ecosystem could be created in the Midwest, at relatively low cost, and that included:

• Ongoing growth and development of CityHive as a ‘hub’ for social innovation and entrepreneurship,
• Expansion of the very successful ‘Catalyst‘ enterprise development program,
• Creation of an online platform that would enable networking and collaboration across locations, sectors and organisations,
• Micro-finance and mentoring programs to support piloting, development and growth of enterprises and innovations,
• Facilitation of ‘clusters’ and ‘action-learning sets’ for individuals and organisations of a similar stage, mission or geographic location,
• Continuation of the successful ‘Swarm’ events that provide large-scale, high-quality learning, networking and collaboration opportunities,
• Annual ‘Goodness’ Festival and Awards celebrating innovation in programs, ventures and projects that benefit our community.

This approach in the Midwest has been developed based on a recognition that the current programs, such as the Social Enterprise Fund, have not been very effective in creating this sort of ecosystem or accelerating the growth of the sector and create a foundation for future growth. For example, the SEF has only offered investment as per point 4 in the above, and then only offered investment at particular levels and of particular types. The criteria applied to investments has been inconsistent and there’s been very limited investment in supporting existing initiatives or in growing new initiatives that fill out the ‘ecosystem’. To be clear, the SEF was and is a good idea, however it was probably conceived without an understanding of the ‘ecosystem’ understanding, designed without adequately incorporating the learning from Victoria, UK etc, and its delivery doesn’t appear to have met expectations or achieved what was intended.

Future government and business investment may need to consider the lessons learned from WA already and:

• Ensure stronger representation or consultation with social enterprises, social enterprise intermediaries and representatives from regional WA,
• Be clear about outcomes, outputs, accountabilities for different institutions and organisations in the system,
• Provide resourcing for contact points, advisers and intermediaries who can direct needs and offers in the appropriate way,
• Develop a multi-year state-wide strategy that guides the SEF, SIG and other monies (across government) to ensure investment adequately addresses each and all of the key components of the ecosystem,
• Increase the total investment available through the SEF to ensure there is adequate funding for organisations at different stages of development — there is a maximum limit of $300,000 which is insufficient to fund multi-year, large-scale social enterprise development and impact,
• Incorporate feedback, evaluation and internal and external (independent) review into the delivery of future social enterprise support — the process to date has been anything but transparent with no feedback or review mechanisms.

This is important stuff. Our experience in the Midwest shows that there is an incredible number of good ideas, good ventures, and good programs that demonstrate social innovation, entrepreneurship and sustainable social enterprise models. However so many of those ventures can stall, stumble or fail because they don’t know who to call, that current institutions aren’t receptive, and they fall like seeds onto concrete where they are left to be crushed, shrivel, or sprout unsuccessfully. What we want to create is fertile ground and perfect growing conditions for those ideas and innovations, such that those ventures can be more successful and effective in providing the social, ecological and economic conditions for the flowering of a beautiful, flourishing people, communities and humanity.

If you’d like to join us in making this a reality for the Midwest, or WA, or to benefit from the ecosystem we’ve already created, then please join us as a member or sponsor!