Firstly let’s get one thing clear: the definition of a social enterprise includes the requirement that the majority of the revenue comes from paying customers: a ‘social enterprise’ is not a charity, nor is it in public (i.e. state) ownership. Nor is it necessarily employee-owned. There are pros and cons for each of these models, of course, but we are here thinking of a commercial company that is not solely concerned with making a profit for its owners. Notwithstanding the arguments of Hayek, Friedman and the rest, there are strong reasons to think that the social enterprise model is a valuable one: there is all sorts of evidence that employees respond to much more than the need to earn a wage…surely we all feel that we would like to achieve more with our 40 (or 50, or 60) hours a week than just paying the bills? To put it another way, one of the things that separates fulfilling work from miserable labour, is the ability to feel our efforts connect with a wider good. What’s more, the focus on the narrow economic efficiencies of the financially-driven company has surely contributed to the carelessness about unintended consequences (what economists might call “externalities”) that has led to the climate crisis and rampant inequality. My personal experience, working for TRL (which is a social purpose enterprise) is that the absence of a shareholder/owner gives us the independence and freedom of action that enables us to contribute much, much more than if we were purely profit driven.
You may feel that these are commonplaces, but I think in the transport industry we can have another perspective on ‘social purpose’.
The thing about transport that makes it such an important and fascinating sector to work in, is that transport is woven into almost every facet of life. Everything we wear, everything we eat, everything we use has been brought to us from somewhere else…and it wouldn’t exist in the first place without the raw materials having been brought together by a series of transport links. In our everyday lives we go to work, we go shopping, we take our children to school, we visit health care providers - every aspect of our lives involves movement around our environment. It is not too grand or self-important to say that human flourishing depends on the transport links that are built into our environment. And the word ‘built’ is quite literal – transport infrastructure enables and, in turn, defines our towns, cities and villages. This is the good news…the other side of the coin is that this is why transport is the largest carbon emitter of any sector of the economy – it enables and underpins all the other sectors. So, for companies in the transport sector (whether or not they are, in themselves, ‘social purpose’ enterprises) the outcomes of our work have a social purpose: we are enabling every part of everyone’s lives. Now you may be thinking at this point that all I’m doing here is playing a semantic trick and that other fundamental sectors like energy, for instance, could make the same claim. Well to some extent that is true, but I do think that transport is somehow special: surely the reason why the impact of ‘lockdown’ during the pandemic was so emotional was that our ability to meet other people is a very basic human need…and meeting people mostly requires transport.
An interesting recent trend has seen some major transport primes inviting their supply chains to think beyond the core product or service they are supplying, to the way that they behave in the communities in which they operate. National Highways, for example, has launched a major initiative to track and reward the ‘social value’ that companies are delivering during their operations. What this means in practice, is that they are asking their suppliers to track the (positive) impact they have on their communities and spheres of operation on 29 different metrics. My personal view is that this is an example of how the ‘pendulum’ of prevailing ideas that swung towards such economic abstractions such as ‘shareholder value’ for about 40 years, has begun to swing back. (Two recent book-length treatments of the economic history and politics of this are “Slouching towards Utopia” by J Bradford DeLong and “The rise and fall of the neoliberal order” by Gary Gerstle.) Whatever the philosophy, economics and politics of it, what it means in practice, is that even organisations which are not, definitionally, social enterprises (like the public sector National Highways, and the construction sector, which is, for the most part, made up of ‘traditional’ commercial, profit-maximising enterprises) are beginning to exhibit some of the features of social enterprises.
You may have different views (and I’d be interested to hear them). Meanwhile, although I welcome these changes, a full-fat social enterprise is very appealing and I’m proud to work for one: I may not end up leaving the world a better place than I found it…but I’m going to spend all my time trying!
