Untapped markets are the key to unlocking social enterprise investment

The defence industry is just one example of a valuable market that is national in scale, but local in its reach and impact

There’s a lot of talk at the moment about social investment, and providing the right and appropriate finance for social enterprise is clearly a major issue. But I am always struck by how little talk there is about building the markets for social enterprise. After all, if you’re going to pay your investor back, someone needs to be buying your goods or services. And this isn’t always the public sector: the main source of income for the majority of social enterprises is actually the general public, and an increasing number sell directly to the private sector too. We need to think much more broadly and creatively about who might buy from social enterprises.

For example, when you think of markets for social enterprise and social value, the defence industry isn’t the first place you tend to think of. Beyond the odd article about “green” bullets and the occasional April Fool, it’s always been viewed as off-limits for fairly obvious reasons – if our mission is to change the world, then why should we even engage? Actually though, the UK defence industry plays a crucial role in employment, environmental management, rural communities, and as a buyer of other businesses. And while it is national in scale, it is often very local in its reach and impact.

It was this mix of factors, along with the combination of their appreciation of the social value act and a desire to build social value into their business, which led us to work with Landmarc. The company’s job is to manage the defence training estate for the Ministry of Defence. It’s a significant public sector contract, which involves managing pieces of land as large as Salisbury Plain or Dartmoor, and ensuring they are fit for purpose for use by the armed forces. Managing such large pieces of land also means they are responsible for hundreds of sites of special scientific interest (SSSI), the third biggest amount of woodland after the National Trust and the Forestry Commission, and that they engage daily with a huge number of local communities and other organisations.

These parts of the training estate are often close to some of the most deprived rural areas in the UK, making Landmarc a hugely important local employer and buyer of products and services. And that’s where the market building comes in.

Alongside new initiatives on employing ex-servicemen and rural planning, the business is committing to a couple of interesting initiatives: the first is creating a procurement process which prioritises the local and social wherever possible – opening up market opportunities for local (rural) social enterprises. The second is something they launched this week with the Prince of Wales, called Landmarc 100 – this will provide seed funding to entrepreneurs in the communities they work with to develop and start up new businesses and enterprises themselves.

This is just one example of the untapped markets out there for social enterprise, and we need to work together to identify and access them – whether it is raising awareness further with the general public, training up private sector procurement teams, or informing commissioners about the Social Value Act. All of which comes under the heading of “Buy Social” – that’s what we need to encourage across the board to open up markets. As we are finding even in defence, there are partnerships and opportunities for social enterprises to do more of what they do, and create more social value.

Nick Temple is director of business and enterprise at Social Enterprise UK

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