Playing with Numbers: A Methodological Critique of the Social Enterprise Growth Myth

Abstract

Social enterprise is a contested concept which has become a site for policy intervention in many countries. In the UK the government has invested significant resources into social enterprise infrastructure, partly to increase the capacity of social enterprises to deliver or replace public services. Government publications show the number of social enterprises to have increased from 5,300 to 62,000 over a five-year period. This paper explores the myth of social enterprise growth in the UK through a methodological critique of the four government data sources used to construct and legitimise this myth. Particular attention is paid to how political decisions influence the construction of evidence. We find that growth is mainly attributable to political decisions to reinterpret key elements of the social enterprise definition and to include new organisational types in sampling frames.

“The Most Supportive Environment in the World”? Tracing the Development of an Institutional ‘Ecosystem’ for Social Enterprise

“…The Size and Impact of Social Enterprise in Scotland Teasdale et al (2013) vividly describe how measuring the number of social enterprises in the UK has become a highly politicised minefield, with various Government publications suggesting that the numbers of social enterprises across the whole of the UK has somehow increased from 5,300 to 62,000 over a 5-year period from 2003 to 2008. Scotland's population, according to the latest census held in 2011 23 was 5,295,400 or around 8.4 % of the population of the UK, and so, if following the rest of the UK's pattern social enterprises would have 'grown' from around 480-5,600 in the same period.…”

Understanding and combating mission drift in social enterprises

“…However, while external validation of standards offers some reassurance against mission drift there is no guarantee that standards will not change over time, or that external measurement and enforcement will be adequate. There has also been debate over what are the appropriate standards or criteria that should define a social enterprise, for example over the percentage of revenues that should come from trading (Teasdale et al, 2013).…”

Re-imagining social enterprise

“…This is partly as the expected tax revenue is declining in relative terms, not least due to large multinational companies adopting increasingly sophisticated tax avoidance schemes, such as those recently exposed by the Panama Papers scandal. The rise in government interest in social enterprise, at least in the UK, can be tracked back to the New Public Management reforms started by the Conservative governments of the 1980s and 1990s, but which accelerated under Blair's Third Way (Teasdale et al, 2013;Teasdale, 2012b). There is a grave danger that they will be implicated (unwitting or otherwise) in an ideological agenda to further drastically reduce the size of the state.…”