What on earth is Social Enterprise UK doing?


The UK social enterprise movement has recently had to suffer the spectacle of a Regional Social Enterprise Partnership having to take Social Enterprise UK to court to get paid for work they had done on a Social Enterprise UK project. In the end, SEUK was forced to pay not only money owed to the Regional Partnership, but the legal costs as well.

But failing to pay what you owe raises not only legal, but also ethical questions.  A couple of years ago I took part in the Senscot AGM in Edinburgh, and was surprised by the passion with which business ethics were discussed in Scotland.  When was the last time you heard an English (or 'UK') social enterprise umbrella body talking about ethics?  And of course there is more at stake here than the ethics of one organisation failing to pay another – or even of a social enterprise body, whose business ethics should be exemplary, failing to pay its debts; this was a national social enterprise representative body failing to pay what should be one of it's own regional partnership organisations.  What on earth was Social Enterprise UK doing?  Has it lost its way entirely?  How did it let what should have been (at worst) a disagreement within a spirit of partnership end up in court?

I leave these questions for others to answer - because for me there is an even more worrying aspect to this case.

The work SEUK failed to pay for was in the area of 'social franchising'.  It is an area in which the Regional Partnership has played a leading role – and in particular, recently, in trying to recentre the social enterprise movement's thinking about social franchising on – you guessed it – ethics!

There is profound disquiet among many of the most experienced social enterprise developers about the apparent tendency in some parts of the movement to accept uncritically big business approaches to intellectual property, rather than deal with the fundamentals of where the public interest is best served by openly sharing knowledge, and where it genuinely lies in franchise-style arrangements.

When is your interest in social franchising driven by conventional business imperatives – like your own organisation's prestige and growth - and when is it actually the best way to extend your mission?

Is the idea of franchising applicable to social enterprise at all – given the respect I hope we all want to give to local differences, accountability and responsibility?

For me, the ground-breaking work on replication through sharing intellectual property is actually being done in the open source software movement – and by Social Enterprise Europe, through their Social Licensing concept, miEnterprise's commonly owned network structures - which consciously reject conventional ideas on franchising and are trying to develop ethical social enterprise alternatives (currently funded, note, by the Scottish Government, but not in England) - and by the truly inspirational work of the Unicorn Grocery in Manchester.

You'll look in vain for mention of these original and ethically based replication strategies in most of the national umbrella guidance on 'social franchising': so the questions raised by the recent court defeat of SEUK are not only about their wisdom and ethics as an organisation, nor just how their relationship with the Regions was alowed to get to this debacle, but at the deepest level, their actual understanding of social enterprise.


Social franchising

There IS some work being done on ethically-based social franchising (quite separate but not deliberately from what SEUK or SEE has done), by the European Social Franchising Network (ESFN), which built up a databse of about 65 such initiatives in Europe, the largest (Komosie in Flanders) employing 5,000 people. It is based on the idea of the franchisor being owned by the franchisees - a secondary co-op in fact.

ESFN is holding its 2nd conference in Göteborg, Sweden 13th May 2014. You can register at https://dinkurs.se/appliance/?event_id=21881

ESFN's website is at www.socialfranchising.coop

Thanks for the links Toby -

Thanks for the links Toby - but I have to say I have looked in vain to ESFN too for any real discussion of the ethical stance social enterprise, and social franchising, should adopt in relation to intellectual property rights.  This issue is of crucial importance now for a lot of reasons, such as the fact that the creative and knowledge-based industries dominate, and account for most growth in developed economies, or the fact that there is a battle raging over digital rights and the freedom of the internet - key for social enterprise because collaborative business models over a free internet fit social enterprise, and social investment, so well.

I'm a pragmatist as you know - and up to a point am at ease with the 'horses for courses' equivocation of most umbrella bodies on the thorny issue of whether the free exchange of ideas and knowledge is 'a good thing' - it has to be accepted that different social enteprise initiatives will always take slightly different approaches - but at least let's have the discussion, and in particular explore the business models in the open source movement etc that have grown like topsy by freely sharing ideas and knowledge, as opposed to conventional business 'franchising'.

Laurence Demarco in the latest Senscot Bulletin...

"I have long argued that the corporate sector version of franchising is not appropriate for our SE community; if Senscot develops a successful business idea - which could benefit other communities - we should encourage replication - free - in the same spirit as the open source IT culture."

Sharing ideas but not project plans

This is a matter which came up several years ago on a Skoll Social Edge discussion about developing the social marketplace. P-CED founder Terry Hallman made the point that we share our concepts, such as the social business model free for others to use without licence but when it came to specific project plans, we needed to protect our investment. In 2003, he'd been denied payment for his work on an economic development proposal for Crimea's government. It was about to happen again after investing 12 man years in a national scale social enterprise development proposal. He made these points.          

"So, if we're inventing projects that we know will be stolen, there are at least two problem areas.

First, if stolen, it's stolen. It's not unlike an architect having a building design stolen. The architect/designer is in best position to understand exactly how it works and how to assemble what they've designed.

If someone wants to use a project design, it's the same as any other project design. The design comes after an in-depth research phase, which in my experience tends to be extremely difficult not least from danger involved in shining light under rocks where the core problems are to begin with. That is, corrupt bureaucrats and officials. When I finish the research part -- which I always do so far (Russia/Crimea/Ukraine) -- I know exactly what the problems are, what solutions are needed, and how to navigate. Possibly someone else could take over and manage things from there on -- implementation. I have no problem with someone else implementing a project, and usually prefer that. Even if they do, it's still a matter of stolen property in which we've invested unilaterally to produce. Almost always, however, there may remain critical components that the implementer just doesn't want to bother with. Maybe it's too dangerous. Maybe there are political considerations and conflicts. In that case, the designer is likely the only person(s) to know how to get those done. That's when it's time to consult with the architect.

Second, even if the project outcome, after theft, is what was envisioned by the designer(s), how does the venture qualify as a social enterprise? Sure, we can slowly design projects one by one as income from our funding side permits. We can do it a lot faster if we get paid for our R&D output, just like any designers.

Finally, is it acceptable to build projects with stolen property? What sort of results would that lead to? Can be build an ethical system based upon unethical behavior (such as violations of Intellectual Property Rights)?

If we invent such a system, is it anything new? Or is it just a twist on the old system?

One thing that can be collaborated openly is this: a Code of Ethics. But, whose ethics? What org(s) will enforce them, and how? Who decides who gets in, how, and why? "

We need a more sophisticated

We need a more sophisticated approach to intellectual property than this though Jeff.

We can't simply equate violations of Intellectual Property Rights with unethical behaviour, or either of these with theft.  Intellectual Property Rights are and always have been very different in different countries and different periods - often shaped simply by the wish of big business to extract more profit from often dubious 'discoveries', or 'original' work.  The USA is notorious for extending copyright every time Mickey Mouse is about to enter the public domain!  In many industries, such as medicine, we all pay a huge price for IPR - many people, especially in poor countries, pay with their lives.

Take a look at my thoughts on this here:  Why social enterprise needs its own approach to intellectual property rights