Social Impact Consulting – Mark Richardson

The InTSEnSE project has been conducting research into the support available to internationalise social enterprises. The full report will be published shortly, but here is a small taster of some of the findings.

To help them internationalise, social enterprises are able to take advantage of a variety of support that exists at a European level, and at a national level. Some of this publically funded, through the EU, national or regional governments. Some of it is funded through NGOs, trusts and foundations, or through social enterprise models. However very little of this is specifically focussed on supporting social enterprises to internationalise, and as such was not always helpful or appropriate. Most social enterprises in this study did not access any support at all when internationalising.

This mirrors the findings of the EU report on internationalising SMEs, which found that only 10% of microenterprises that were trading internationally had accessed any public funding or support.

For social enterprises, this may be because existing infrastructure is rarely designed to support the specific needs of social enterprises internationalising. Support focussed on raising aspiration or awareness of international opportunities tends to be limited to export opportunities for mainstream businesses. Social enterprise networks are generally local or national rather than international. And finance available to social enterprises is rarely focussed on internationalisation, although some European programmes do encourage cross border cooperation.

The level of social enterprise support varies significantly from country to country, and within countries. But of all the countries examined in this study, specific support for social enterprises to internationalise is only available in Scotland. While more generic social enterprise support can provide some help to social enterprises wishing to internationalise, for example guidance with business planning, or access to social investment, the expertise of the advisors tends to be domestic. This means that social enterprises need to look beyond the sector to other forms of business support when seeking advice specifically on internationalisation.

Business support for SMEs to trade internationally is useful for those social enterprises with a simple export model, but is of limited use to those social enterprises with more complex trading models, or those wishing to develop their social impact in other countries.

Social entrepreneurs are adept at accessing support and finance from wherever they can get it, putting together the best possible package to develop their vision for internationalisation. However, the reality is that:

• The legal and policy framework still makes running a social enterprise easier in some countries than others, and differences between countries create pitfalls for those wishing to internationalise.
• International social enterprise networks are weak and disjointed. Generally, international networks connect social enterprise intermediaries rather than social enterprises themselves.
• Business support, where available, rarely combines expertise in social enterprise AND internationalisation. At best, advisors have some expertise in one or the other.
• In rare cases, finance for social enterprise is specifically for internationalisation, but in most cases the focus of the finance available to social enterprises is national or local.

The economic, business and social benefits of SME internationalisation are well documented. In order to take advantage of the huge opportunities that social enterprise internationalisation could bring, governments and international bodies need to give more consideration to the infrastructure to encourage and support this. In particular, effective international networks; finance packages focussed on internationalisation; and business support with expertise in social enterprise internationalisation.