What Australian social enterprises can expect this year
Some people may confuse social enterprises with purely volunteer or philanthropic organizations. One can find similarities between the two, but there is one major difference: marginal profits.
A social enterprise, whether registered as a for-profit or as a non-profit organization, strives to earn some marginal profits. The profits are then used for specific social programs such as in the areas of health and education. Social enterprises are operational businesses that sell specific goods and services but have social objectives as the source of impetus.
Social enterprises focus on uplifting the socio-economic conditions of the marginalized citizens. For instance, the Australian social enterprises have a high rate of employment for people with disabilities and for women as managers compared to mainstream enterprises.
Based on a 2017 report by the Victoria State government, the social enterprise sector provides more than 60,000 jobs and has an economic output of at least $5.2 billion. About 50 percent of these enterprises in Victoria is managed by women. These enterprises also employ more than 12,000 people with disabilities and about 4,000 long-term unemployed people.
Among the long-term unemployed people who benefitted from the jobs created are the homeless and the disadvantaged youth. The aborigines also have better opportunities in these enterprises compared to mainstream businesses. Hence, these enterprises strengthen a more inclusive culture in Australia.
Here are some predictions about the 2018 prospects of social enterprises in Australia. Other previous trends in the past few years are also likely to continue.
1. Demand by private businesses and government will help social enterprises grow further
Government institutions and mainstream private businesses are likely to increase their purchase and contracts with social enterprises. The demand from these two sectors will be improved if the perceived risks of purchasing will be reduced. The public and private sector must be able to find enterprises that have the capability of supplying the needs of these two sectors. The bottom line is the competitive edge.
2. Larger market opportunities will spur improvement in the business capability of social enterprises
Larger demand from the private and public sectors could trigger significant improvement among the social enterprises in terms of business capability. More of these organizations will become competitive in fulfilling contracts. Improving their capabilities will surely attract big contracts.
3. Millennials will have a significant role in influencing the market demand
Based on a study conducted by Goldman Sachs, the millennials will represent the largest generation that will influence the market trends. This generation is more willing to pay more for goods and services that are sustainable. Businesses that have social causes are likely to benefit from this trend, particularly those that fight for environmental causes.
4. There will be better access to funding such as international grants
Businesses that are pursuing social causes are typically funded from the revenues that they generate from doing business. However, they can also benefit from other sources of funds such as crowdfunding and international grants.
5. International and national government policies will play a crucial role
Government policies are likely to change to encourage procurement from social businesses. The international industry standard ISO 20400 will help in promoting sustainability in the procurement processes of the government and private institutions.