Tags

, , , , , , , ,

Metrics and measurement have always been a debated and sometimes controversial topic in the social enterprise sector due to a lack of clarity, definitions and globally-accepted standards, leading people to question the longevity of social ventures. However, a recently released 30-year study might at least shatter one common myth about social enterprise.

 

Professor Simon Denny, director of enterprise, development and social impact at Northampton University, to compare recently completed research to compare the longevity of FTSE 100 companies and the top social ventures in the UK. For this project, he looked at survival rates over a 30-year period (1984-2014) of the 100 top social enterprises and trading charities in comparison with the top 100 PLCs (corporations).

 

The conclusion? Denny found that social ventures in the UK were not more likely to default on debt or cease operations as compared to corporations. In fact, per his research, 41% of the social ventures have endured, compared with 33% of the PLCs. Evidently, this means that the idea of a social venture being more unstable, risky or less likely to succeed is largely just a misconception.

 

While this research is exciting, there are many factors we must keep in mind when evaluating it. Obviously, just as a regular start-up has a high likelihood of failing, some social enterprise ventures will still fail. However, what this study shows us that is very important is that many of them have and are succeeding – a fact that the general public might not realize. Additionally, the UK has arguably the most mature social enterprise sector of most developed nations – due to its early adoption of the movement and regulatory changes around social enterprise. Therefore, these rates would likely be much lower in North America.

 

Nevertheless, this is promising evidence for the global social enterprise sector and something that should be used as motivation to continue pushing forward, particularly in the ethical fashion space. We need more successes and more metrics to prove the viability of the space. Numbers don’t lie and these numbers definitely mean growth.

Advertisements