The social business sector in Wales is worth an estimated £3.18bn to the Welsh economy, a 34% increase on findings in 2016.*
The ‘Mapping the Social Business Sector in Wales’ report* identified a total of 2,022 organisations as operating in the social business sector in Wales, employing around 55,000 people and providing volunteering opportunities to an estimated 58,000 individuals. In addition, around a quarter of all businesses invest their profits in their social objectives and more than three-quarters pay the Real Living Wage to all their staff, compared to 48% of Welsh SMEs.**
The report is based on survey data from 699 social businesses, with the aim of providing an up-to-date outline of the state of the sector; including its size, composition and contribution to the Welsh economy. The key findings are:
- The entire sector is worth an estimated £3.18billion to the Welsh economy
- The sector supports 55,000 paid jobs and 58,000 volunteers
- 76% of social businesses pay the Real Living Wage to all their staff
- 57% of respondents’ workforce live within 10 miles of the businesses’ premises
- 56% of social businesses generate more than three quarters of their income through trading activity
- 17% of new staff were unemployed immediately before taking up the post
Improving a particular community remains the primary objective for social businesses. Other businesses report that their mission is to support vulnerable people and improve health and well-being.
Social businesses are found in areas of social deprivation, supporting communities, offering jobs and training – often providing services that the public and private sectors would struggle to maintain.
There are clear synergies between businesses’ social objectives and the well-being goals in the Well-being of Future Generations (Wales) Act 2015.
- Brexit was identified as having impacted or expected to impact 50% of social businesses, with nine in ten of those reporting this to be a negative impact
- The main skills gaps were found to be in marketing, followed by business management and strategy
- The aging profile of leadership teams within the sector (27% aged over 65) is likely to present a further challenge to social businesses with many citing succession issues.
Deputy Minister for Economy and Transport, Lee Waters AM said:
“This research shows a confident sector that employs around 55,000 people and contributes over £3bn to our economy. As headlines, these are impressive figures but they do not tell the whole story. Social businesses are embedded within their communities and they are driven by those communities. They deliver good jobs, closer to home, where communities need them. Social businesses work actively to address local issues through trading and then reinvesting the income they earn into the things that matter to them.
“Social businesses are also good employers. They offer opportunities and training to those people furthest from the market place but are also increasingly paying those people a real living wage. Such a thriving sector offers an opportunity, and a challenge, to Wales. How can we use these social businesses as a platform to better deliver more sustainable and inclusive growth and to address the social and economic aspirations we have for our country?”
Derek Walker, Chief Executive of the Wales Co-operative Centre, lead development agency for the social business sector in Wales, said:
“This report demonstrates that the social business sector is a varied and innovative sector, which offers enhanced economic, environmental and social value to our country and as such makes an important contribution to Wales’ efforts to achieve its goals for future generations. These findings should inform the emerging strategy that is currently being developed for the sector to enable it to capitalise on opportunities and minimise barriers. It is a sector that, with support that targets start-ups, growth and sustainability, can continue to grow and make a positive contribution as we navigate through the impact of the Brexit process.”
The report was officially launched today at Creating Enterprise, an award-winning building and maintenance social business based in North Wales. A wholly-owned subsidiary of Cartrefi Conwy Housing Association. All of its commercial profits are reinvested into employment initiatives via its Employment Academy, which creates volunteering, training and employment opportunities for social housing tenants.
With specialist business advice from Social Business Wales, Creating Enterprise has experienced rapid growth since it was established as a community interest company in 2015. The most recent accounts show an annual turnover of £9.7m, 3,800 properties maintained a year and 1,200 individuals accessing the drop in training facilities at Mochdre.
Social Business Wales is an £11 million project funded by the European Regional Development Fund and Welsh Government. It is part of the Business Wales family, and is being delivered by the Wales Co-operative Centre. The project offers specialist services to help social businesses expand their products, services and markets, and assist charities to set up trading arms to take forward commercial ideas. It also provides a service to assist businesses and organisations that want to adopt co-operative or employee-owned business models.