Business startups in the industrial heartland of Britain have suffered in recent years. Once the crucible of industrial creativity and enterprise, entrepreneurship in the Black Country in the West Midlands is at an all-time low.
New startup rates for new business lag behind the average for the rest of the country by 1,334 businesses per year. The Black Country Local Economic Partnership has had the foresight to identify the creation of new social enterprises as one positive means of addressing this shortfall. The LEP is doing this in a number of ways, especially through a pilot initiative in creating a social enterprise zone.
We believe that with the right kind of energy and support it is possible to spark social movements and the zones are an attempt in a locality context to make that happen for social enterprise creation.
This is a concept similar to an enterprise zone but recognising the particular issues that social enterprise startups face. The idea is to focus on a locality where startups are low and put in place from existing and new support agencies the right kind of backing, whether it be financial, mentoring, coaching, back office services and work space.
Other ideas include the possibility of offering incentives similar to those of enterprise zones with reduced capital allowances, reduced businesses rates and space at preferential rates until the businesses are fully up and running.
At the Accord Housing Group in the Midlands, we run an initiative called AddVentures, which not only supports our residents into work but also into forming their own enterprises. We've partnered with UnLtd to provide grant funding for the startup stage of a social enterprise with further grant funding for the expansion stage when the businesses are able to take on more workers and grow.
We're supporting 22 people at present in setting up enterprises and also incubating some 12 projects within the group, which hopefully will become standalone enterprises. The whole approach has been inspired by the work of The Tides Foundation in the US. This initiative in the West Midlands is a good one and is working well but we need many other organisations to do similar work so that the social and economic impact of these enterprises can be scaled up.
And this is a key ambition of the Black Country LEP to scale up the creation and impact of social enterprises across its area. It is engaging people in setting a groundbreaking vision for social enterprise with a range of practical support measures to make the vision a reality.
The full details of how the social enterprise zones will operate have yet to be worked out, but it is hoped that the initiative will be initially trialled in Walsall through the Vine Trust Group's St Matthew's Youth Quarter. This zone would be located on brownfield land. It would feature a social innovation research facility and high-quality office space that meets the need of businesses which can demonstrate social, economic or environmental benefits to the Black Country.
Kevin Davis, chief executive of the innovative social enterprise, has assembled a coalition of public, private and third sector and civil society partners focused on social and economic regeneration with young people as the catalyst.
We need all kinds of businesses in the Black Country to form, survive and thrive. Some research has revealed that social entrepreneurs are more likely to operate in the most deprived places in the country. Often the reason behind this is that they want to tackle social issues within their communities.
The same research has shown the social enterprises are growing faster than private sector businesses, employ more people on average and have a larger turnover, again when compared to their private sector counterparts.
Some of the forms of social enterprise, whether mutual, community interest companies or charities have structures that help support engagement of their workers in the running of the organisations and in having a genuine stake in their work.
Dr Chris Handy is Black Country LEP lead on enterprise and group chief executive of housing organisation Accord Group.
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