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Business & Economy

Pandemic inspires influx of social entrepreneurs

The coronavirus pandemic has inspired a new wave of social entrepreneurs who are using their platforms to support their local communities during these difficult times.

The North East Business and Innovation Centre (BIC) has reported a marked rise in demand for advice from its social enterprise experts since the beginning of the pandemic.

Requests are coming from individuals starting up new businesses to make a difference to the local area, as well as from existing enterprises in the region who want to expand their services.

The North East has also seen a rise in traditional companies wanting to adapt their business models to become social enterprises and use their business to help out their community.

In 2019, Social Enterprise UK’s State of the Sector report concluded that there were 100,000 social enterprises across the country, contributing £60 billion to UK GDP. In 2021, it’s expected that this number will be much higher.

Counting the exact number of social enterprises can be complicated, but Michelle Booth, an associate consultant at the BIC, said there is a lot of evidence that the model is gaining traction in the North East.

“It’s notoriously difficult to measure how many social enterprises are trading because there are a range of different legal forms. But a good gauge of the overall trend is the number of Community Interest Companies (CICs) recorded at Companies House,” she said.

“There are 942 active CICs in our region, 71 per cent of which have been registered in the past five years and shows a real uptick in social entrepreneurship.

“The figures back up our anecdotal evidence but we know they’re a conservative estimate. There’s been a steady increase in this type of enterprise activity in our region in recent years, in line with an increased focus on localism, public sector reform and a changing economy.”

Despite the challenging economic climate of 2020, a total of 183 new CICs were created by the start of November. This accounts for 19 per cent of all CICs in the region.

Kevin Marquis, the North East BIC’s social enterprise manager, said more and more companies are realising that the social enterprise model offers the perfect way to run a business that is not only profitable but also has social purpose at its heart.

He added: “As with all crises, the pandemic has brought out the best in a lot of people and has inspired them to take collective action to consider how they can best support others.

“People are thinking more about their social objectives and their own accountability and responsibility to their communities. They’re turning to social enterprise as this is the best model to support those objectives.

“Private businesses too are looking to convert to this model because their social conscience has been pricked and they recognise that this route opens up income and diversification opportunities that will make them more sustainable.”