A new hi-fi energy

FIFTH Element is a disc-jockey business with a difference. It is run by a part-time driving instructor and its purpose is to create work for youngsters who are otherwise at a loose end, perhaps even in trouble with the law, but brilliant at mixing dance music. Plus, Fifth Element makes a powerful statement in organising successful dance parties where the "no drugs" rule is strictly applied.

This story from Hastings, in the United Kingdom, is a tiny example of an alternative business sector which is on the rise all over the world. This is the world of social enterprise which combines profit-seeking with social objectives. Here the term "enterprise" does not refer to the relentless drive to accumulate more money. It means the energy of an innovative initiative that launches new products or services and at the same time solves a social problem.

Much of this energy is manifest so close to the ground level that it goes virtually unnoticed. Social entrepreneurship is often a part of micro-enterprise which, across the world, overshadows the more visible forms of business and industry. Low Flying Heroes, a study by the New Economics Foundation, London, U.K., estimates that over half the world's workforce is engaged by the over three billion micro-enterprises spread across the globe.

For example, in most member countries of the Organisation for Economic Cooperation and Development (OECD), these micro- enterprises are currently the fastest growing area of new employment. This is not surprising if you consider the following statistics for Britain alone. According to the British Department of Trade and Industry, 67 per cent of Britain's 3.7 million businesses are a one-person show. Then there are 1.1 million micro-enterprises that employ nine or less workers.

Only 32,000, or less than one per cent of Britain's businesses employ more than 50 people. Of these, only about 1,200 companies are registered on the Stock Exchange and yet this tiny fraction of the business community gets all the media attention and political backing. This general picture would be true for most countries.

Just what are micro-social enterprises? Most of them are a combination of self-help and mutual aid or cooperation within a community. Some make monetary profits, though this is not the basic goal. "Self-help is about sharing knowledge, skills and power - the antithesis of the market place where the fittest survive and weakest go to the wall," writes Mai Wann in Building Social Capital, a publication of the Institute for Public Policy Research, London.

While commercial entrepreneurs do something new for the purpose of creating wealth and adding value, social entrepreneurs do something new with the aim of solving a social problem and adding social value. Yet, successful social entrepreneurs combine the high-mindedness of do-gooders with the hard-headedness of business people.

Such people have made a big difference in countries all over the world. Among the more famous examples are: Mohammed Yunus of the Grameen Bank in Bangladesh; Ella Bhatt of the Self Employed Women's Association and V. Kurien of Amul in India and Michael Young, founder of the Open University and more recently the School for Social Entrepreneurs in Britain.

However, these are the high-fliers of social enterprise. The excitement about micro-social enterprise stems from the promise it shows of millions of "ordinary" people creating small wonders or simple services that make a big difference in their immediate vicinity. For instance, the Confederation of Indian Industries' Rural Summit in Mysore last year was packed with hundreds of members from self-help groups in South India.

The book Low Flying Heroes: Micro-social Enterprise Below the Radar Screen, by Alex MacGillivary, Pat Conaty and Chris Wadhams, is a part of a larger process in which researchers and activists are seeking acknowledgement for the worth and potential of such endeavours. Though this study is essentially about Britain, it liberally quotes the experiences of Sheela Patel of the Society for Promotion of Area Resources Centres (SPARC) in Mumbai. Low Flying Heroes finds that micro-social enterprises are "quick- witted and flexible enough to be making real progress in tackling poverty, renewing neighbourhoods, building social, capital, economic inclusion and making communities green and sustainable".

Like Fifth Element, many of these enterprises are never formally registered and thus do not feature anywhere on the view-screen of either government bureaucracy or large voluntary institutions. But Low Flying Heroes estimates that the number of micro-social enterprises in Britain is three times more than the formal charities and involves an estimated 1.8 million to 5.4 million people.

Predictably, most micro-social enterprises are always tight for resources of every kind. Yet, as the Low Flying Heroes report suggests, this may be one of the reasons why the work of such groups is "innovative, inclusive and disproportionately effective".

The report concurs with the lessons that SPARC has learnt over two decades of working in city slums all over India. One, that there is a need to challenge the prevailing ethos that value comes from either market or the state, for, value is actually derived from people and their own culture. Two, that development does not trickle down. Three, that local people usually know what the solutions are. And, four, that such work needs to be allowed to progress slowly and at a human pace of trial and error.

However, all this together is not enough. Micro-social enterprise also needs policy support from governments. This is an issue not only in developing countries but also in Britain where activists are clamouring for social enterprise as one way of bridging the gap between economic success and social progress.

In May this year, a wide range of social action bodies in Britain launched the Coalition for Social Enterprise. This Coalition aims to give voice to the "alternative" business sector and also counter the Labour party's growing enthusiasm for private enterprise of the purely commercial kind.

The idea of low-interest "venture capital", or interest-free loans, for innovative development strategies by local communities is being pursued by social activists in India. But such ideas have not, as yet, fired the imagination of either the general public or the financial elite. This is largely because the potential for socially motivated business enterprise is not fully acknowledged. The irony of this is that, meanwhile, many of India's successful social enterprises are being celebrated, lauded and imitated all over the world.

RAJNI BAKSHI

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