Social Innovation and Social Enterprise:
Evidence from Australia
Associate Professor Jo Barraket and Craig Furneaux
Australian Centre for Philanthropy and Nonprofit Studies
Acknowledgements
• More than 570 participants in the Finding Australia’s
Social Enterprise Sector project
• Social Traders (research partner) and Westpac
Foundation
• ACPNS colleagues: Dr Nick Collyer, Matt O’Connor, Dr
Heather Anderson
Background and Context
• There is a growing interest in social innovation, both in
Australia and internationally
• Movement both includes and contests social economy
organisations
• Despite growing interest ,there is little known about the nature
of social innovation within the social economy
• This paper reports on a research project undertaken to
identify the population and practices of social enterprises in
Australia.
Definition of social enterprise
• There are competing definitions of social enterprise.
• Based on key informant discussions, the following definition
was applied. Social enterprises:
– Are led by an economic, social, cultural, or environmental
mission consistent with a public benefit;
– Trade to fulfil their mission;
– Derive a substantial portion of their income from trade; and
– Reinvest the majority of their profit/surplus in the fulfilment
of their mission.
Defining social innovation:
• Minimal conceptual development and operational
application to date
a “novel solution to a social problem that is more effective,
efficient, sustainable, or just than existing solutions, and
for which the value created accrues primarily to society
as a whole rather than private individuals”
(Phills et al. 2008: 34)
Theoretical framework
• Mulgan et al.’s (2007: 5) three dimensions of social
innovation are used to explore social innovation in
Australia:
– new combinations or hybrids of existing elements;
– cutting across organisational, sectoral and disciplinary
boundaries;
– and leaving behind compelling new relationships.
Methodology
Defining social enterprise –
workshops and online discussion
paper
Communicating with prospective
survey respondents
Conducting the Survey
Data analysis and reporting
Size of responding organisations
Size of responding organisations
(N=218)
Percent
80
60
40
20
0
Small
Medium
Organisational size
Large
Age of responding organisations
Age of responding Social Enterprises
70
60
50
40
30
20
10
0
It is not yet
fully
operational
Less than 2
years
2-5 years
6-10 years More than 10
years
Main purpose
None of the
above
We exist
primarily to
generate
financial benefits
for individuals
We exist
primarily to
support the
mission of our
nonprofit
auspice
We exist
primarily to
provide benefits
to our members
We exist
primariy to fulfill
a public or
community
benefit
Percent
Primary Mission
Primary Mission of Responding Social
Enterprises (N=474)
80
60
40
20
0
80
60
Percent 40
20
0
Other
A semi-autonomous entity
operating under the auspices
of a pre-existing organisation
A fully incorporated/registered
trading entity
A separately incorporated
program or subsidiary of a
larger organisation
An unincorporated/registered
entity that is not yet trading
An unincorporated group of
interested individuals and/or
organisations
Organisational Structure
Organisational Structure of responding Social
Enterprises (N=349)
Geographic Reach
Geographic Reach of the Mission in which
responding social enterprises are involved
(N=342)
100
Percent
80
60
40
20
0
Local
Regional
Statewide
National
Geographic Focus
International
0
A spiritual or religious
community
Aboriginal and Torres Strait
Islanders
People with alcohol, drug or
substance abuse issues
Young people
A particular geographic
community
People with disabilities
Older people
Families
Homeless people
Lesbian, Gay, Bisexual,
Transgender people
Migrants, refugees, or asylum
seekers
Disadvantaged men
People with mental illness
Prisoners and ex-offenders
Remote or rural community
60
Unemployed people
Disadvantaged women
Animals
Environment
Workers or producers
A community of professional
practice
Other organisations
Other
Main Beneficiaries
Main Beneficiaries
40
20
Industries in which the social enterprise
operates
Industry of Operation
Industry/ies in which responding Social Enterprises
Operate (N=341)
Education and training
Wholesale trade
Food retailing
Other retail trade
Accommodation
Food and beverage services
Arts and recreation services
Hospitals, medical and other health care services
Residential care services
Social assistance services
Transport, postal and warehousing services
Information, media and telecommunications
Financial and insurance services
Rental, hiring and real estate services
Professional, scientific and technical services
Employment services
Building cleaning, pest control and other support…
Other administrative and support services
Agriculture, forestry and fishing
Mining
Manufacturing
Electricity, gas, water and waste services
Construction
Personal and other services
0
10
20
30
Percent
40
50
Finding 1
• As predicted by Mulgan et al.
• Social enterprises in Australia operate across
geographical boundaries, areas of operation and main
beneficiaries
100
80
60
40
20
0
A worker or
produce
owned…
A business
owned by a
charity or…
A community
owned
business
A social
business
A mutual or
memberowned…
An enterprising
community
activity
Other
Ownership structure
Ownership Structure of Responding Social
Enterprises (N=353)
Sources of Income (as a percentage)
Area of Income
Proportion of Income Derived From Different
Sources (N=186)
goods or services provided by the enterprise…
government payments for service delivery
contributions from an auspicing or partner…
revenue from investments or capital assets
government funding for specific capital items
general purpose funding from government
philanthropic grants or bequests
contributions from individual members
debt finance
finance from external investors
other
0
10
20
30
40
Average percent
50
60
200
180
160
140
120
100
80
60
40
20
0
Yes
No
Don't Know
Expand your mission to
target new or different
beneficiaries
Develop any new or
substantially changed
processes to improve
your social impace
Develop any new or
substantially changed
processes to improve
your business
operations
Develop any new or
substantially improved
services to support to
meet the needs of your
beneficiaries
Develop any new or
substantially improved
services to support the
development of your
business
Develop any new or
substantially improved
goods to meet needs of
beneficiaries
Develop any new or
substantially improved
goods to support
development of your
business
Type of Innovation
Principal Component Analysis of Innovation
Two clear
components were
found in the data.
This was split
across type of
innovation, with a
number of
nonprofit
organisations not
engaging in
goods innovation
Relationship between innovation type and
profit/loss
Goods and service
innovators had a higher
profit overall compared
to process, services and
organisational innovators
[F(1,107)=5.099,p<.026]
Finding 2
• As predicted by Mulgan et al.
• There is evidence that the social innovation is associated
with new combinations of structure and organisational
form
• There is also innovation in routines, and as the principal
component analysis indicated, there is also two distinct
combinations of innovation type
Source of Information Used by Social
Enterprises
Source of Information
Types of External Services Used (N=253)
External accountants
Banks
Other financial institutions
Solicitors
Business Consultants
Others in your industry/ies
Industry association/chamber of…
The Australian taxation office
State government consumer/fair…
Government small business…
Social enterprise intermediaries
A university or commercial…
0
Don't know
More than 3 times
1-3 times
Never
10
20
30
40
50
Percent
60
70
80
Finding 3
• As predicted by Mulgan et al. There have been new
relationships established in the process of creating social
innovations.
• Many of the organisations referred to by social
enterprises simply do not fit within the ambit of a
traditional nonprofit organisation (e.g. Trade
associations)
Summary of findings
• There is incredible diversity in social enterprises and the
innovations which they undertake
• Following the framework advanced by Mulgan et al., we
have found evidence that social innovation amongst our
participating social enterprises:
– Involves new combinations or hybrids of
organisational structure, form and operations
– Cuts across boundaries – in terms of geography,
intended beneficiaries, and operations
– Stimulates new relationships to facilitate outcomes
Next steps
• Beyond ‘what’ to ‘how?’ and ‘to what end?’.
– Regional development and social enterprise
– Social enterprise and strategic entrepreneurship
• Beyond social enterprise to other sites of social
innovation