14 Jun 2011
So, what exactly is a Transition enterprise?
- ‘From the Ground Up’: a Transition enterprise in Kingston, London, providing vegetable boxes to the local community.
Fiona Ward of Transition Network’s REconomy project has written the following to try and answer the question “what would a social enterprise founded on Transition principles be like? This posted is intended to stimulate discussion, so do comment below. Over to Fiona…
Why do we need this definition?
This document defines what is meant by a Transition Enterprise (TE). This definition is useful to the Transition Network because it helps us clarify:
- The kind of trading enterprises we would most like to see, as they best support the wider aims of Transition, and
- Where we should first direct our limited resources (e.g. via the REconomy project).
Other types of commercial enterprises can also help meet the aims of Transition. In fact, we need a wide range of business models in each local economy to provide the diversity that helps build resilience, including privately owned for-profits and ‘regular’ social enterprise. However we wish to focus our efforts on the TEs at this time as they best align with the aims of Transition, and are under-represented.
Transition Initiatives are welcome to refine this definition for use with their own locale, if useful.
Transition Enterprise Definition
A Transition Enterprise (TE) is a financially viable trading* entity that fulfils a real community need, delivers social benefits and has beneficial, or at least neutral, environmental impacts.
* means of exchange other than money may be used, viability is to at least meet costs
|Transition Enterprise Characteristics (in order of priority)|
|1. Resilience outcome||Will benefit the local community by improving its resilience or wellbeing in some way||Produces energy from local assets, provides local food etc. Meets a real need. Resilience outcome as important as economic motive (i.e. provide jobs).|
|2. Low carbon||Minimises carbon emissions and so contribution to climate change||Minimises energy use of operations, distribution and products. Ideally carbon negative or neutral. Reduces exposure to high cost fossil fuel.|
|3. Natural limits||Works within the natural resource (and energy) limits of the planet, including ecosystem services. Works with suppliers that do the same.||Considers cradle to cradle design of products, industrial symbiosis etc. Sustainably sourced local materials. Understands our natural systems’ capacity to deal with waste, toxins…|
|4. Appropriate localisation||Considers viability of business model post peak oil, and level of independence from globalized corporate macro-economy and its risks.||Produces goods and services in demand locally/regionally. Not reliant on export or import markets unless for things unique to place. Virtual e.g. creative/IT goods and services excepted.|
|5. Not just for personal profit||Goes beyond distributing profit to individuals, with at least some profits reinvested in the local community.||Pays ‘living wage+’, minimises gap between high/low pay levels.|
|6. Community assets||Holding public or “commons” assets and wealth in trust for community benefit (can’t be sold by individuals).||Land, community buildings, energy resources, public money, major grants etc.|
|7. Locally accountable||Independent and accountable to a defined constituency who are democratically involved in governance of enterprise||E.g. local people invest in enterprise, then have right to vote directors in/out and helps define strategic direction and use of profits, employee ownership models etc.|
An enterprise could operate as any one of different types of legal entity, and still meet most of these characteristics.
‘Regular’ social enterprises today often tend to lack 2-4 (i.e. those factors that are contributing to our environmental problems) and have a ‘social purpose’ rather than a local community resilience-building purpose.
Unlike most private-for-profits and some social enterprise, the trading of TEs should itself contribute to the resilience or wellbeing of the local community (and do no harm elsewhere). For example, it can’t import plastic products from China to sell in a local shop to raise money to fund Transition projects.
We suggest that this is as far as we need to go with this definition at this stage. It’s not yet clear what sort of economy we will see emerging over the next few years, or what types of enterprises will evolve out of Transition. We will revise this definition as appropriate, apply it with caution and develop a means by which we can evaluate against it, as well as its usefulness overall.
The evolution of local economies that have even a small percentage of enterprises meeting these characteristics is a massive shift from our current globalised capitalist economic system. This list is quite possibly unrealistic to find in many enterprises from the outset, and few will be able to meet all of the above.
This should therefore be seen as an aspiration at this stage and we may, for example, say some characteristics are essential, some important and some desirable to better define criteria for offering funded support, for example.
Use of these characteristics
TEs will be able to access the highest levels of funded support and advice that will be on offer via the TN’s REconomy project. Other enterprises that meet the essential characteristics at least may still be able to access parts of the support offer. We will learn more about the needs and how best to allocate our resources as we go.
Outside the scope of the funded support, the part of the TN that works with businesses and organisations (Transition Training and Consulting) will work with any enterprise that wants to make improvements in any of the above, but it will charge for these services.
To re-build a local economy, Transition Initiatives will need to work with other local partners, for example Chambers of Commerce. They may work together to produce a single vision/plan for their new economy, then agree to work on separate parts of the plan. For example, the Chamber of Commerce may wish to run a ‘Shop Local’ campaign which would include the private for-profits that don’t demonstrate any of the characteristics above. So this should not be seen as a means to exclude large parts of the local economy.
Finally… why not use ‘Social Enterprise’ or ‘Transition Social Enterprise’ rather than just ‘Transition Enterprise’?
Because social enterprise is already quite well defined and we don’t want to confuse things. Transition adds to this definition with the resource/environmental aspects and widens it from a ‘social purpose’ to be a ‘resilience outcome’ and insists that the trading itself is part of the solution.
[Reference: some input used from Social Enterprise in Anytown, John Pearce, p31]
Established in 1998, Social Enterprise London (SEL) is the strategic agency for the development of social enterprise in London. SEL works with individuals, enterprises, organisations, government and other statutory bodies to provide enterprising solutions to social and environmental challenges and to create new ways of doing business.
The first social enterprise agency in the UK, Social Enterprise London was established in 1998 after collaboration between co-operative businesses (Poptel, Computercraft Ltd, Calverts Press, Artzone), a number of co-operative development agencies (CDAs), and infrastructure bodies supporting co-operative enterprise development (Co-operative Training London, Co-operative Party, London ICOM, Co-operatives UK). SEL's first chief executive, Jonathan Bland, brought experience from Valencia where a business support infrastructure for co-operative enterprise was established using learning from the Mondragón region of Spain. SEL did more than provide support to emerging businesses: it created a community of interest by establishing an undergraduate degree in social enterprise and a Social Enterprise Journal. Allison Ogden-Newton, formerly CEO of Women's Education in Building (WEB), took over from Bland in 2004.
In July 2012 SEL announced that it would be integrating its key activities with the national body, Social Enterprise UK.
SEL states that its mission is to "support and promote the success of social enterprises, positioning London as the global leader of the social enterprise movement".
SEL's board brings together some of the country’s leading social entrepreneurs. The board includes (as co-chairs) Mark Sesnan, Managing Director of Greenwich Leisure Limited and Sophi Tranchell, Chief Executive of Divine Chocolate.
SEL is or has been the social enterprise strategic partner to organisations including the London Development Agency (LDA) and London borough councils. SEL operates as a social enterprise in its own right, running a wholly owned trading subsidiary that markets bespoke consultancy services, social enterprise training and publications. It delivers consultancy and business support across the world in countries including Vietnam, Korea and Croatia.
SEL worked with the LDA to establish an undergraduate degree in social enterprise at the University of East London, led by Jon Griffith.
In 2004 SEL developed and launched the Social Enterprise Journal, now managed by Liverpool John Moores University and published by Emerald Group Publishing.
It also runs the London Social Enterprise Network, a network of over 2,400 social enterprises and social entrepreneurs based across the world.
In October 2010 SEL developed and launched Transitions, a programme of training and consultancy designed to support public sector workers and public bodies keen to explore the potential of establishing 'spin out' social enterprises to deliver public services.
The organisation directly brokered over 500 social enterprise jobs under the DWP's Future Jobs Fund.