I read an interesting report earlier this week from the University of Liverpool’s Heseltine Institute which looked at the impact of the social economy. Broadly speaking the social economy is made up of not for profit organisations such as voluntary organisations, housing associations and co-operatives.
The Heseltine report says that the social economy on Merseyside is worth around £3 billion per year and employs 45,000 people. To put that in context, the visitor economy, which civic leaders see as being key to Liverpool’s future, is worth £4 billion and provides 50,000 jobs.
The size and strength of the social economy doesn’t really surprise me. If you look at the news pages of the Liverpool Chamber of Commerce website you’ll find that the majority of the stories are from social economy sector rather than from traditional business and industry.
This situation is unlikely to be unique to Merseyside. I expect that you’ll find a similar picture in most local economies in the UK outside of the M25. So, is the increasing importance of the social economy a good thing?
On the positive side, organisations in the social economy tend to be ethical and treat employees and suppliers fairly. They also provide a range of services which are useful to society and are often invaluable to people from disadvantaged backgrounds. You could also argue that they create a sense of community and help to combat some of the inequalities in society.
On the negative side, many of the jobs in the social economy are low skilled and low paid. There is also a case for saying that the sector does not provide the wealth creation which comes from successful commercial enterprises.
Either way, we need to recognise that the social economy is likely to play an increasingly important role in the UK. The organisations within that community need to work more co-operatively with each other, particularly when it comes to communicating their work and its value to the wider public.