The existence and extent of high-growth amongst UK Social Enterprises

The existence and extent of high-growth amongst UK Social Enterprises

Linda McGilvray

Heriot-Watt University


Objectives
This study investigates high-growth in social enterprise firms in the United Kingdom. There is considerable discussion in social economy literature that social enterprise firms are exhibiting characteristics of growth, whilst the private enterprise sector is either contracting, or is asymptotic to the horizontal. At the same time, the literature fails to identify if high-growth is occurring amongst social enterprise firms and how high- growth is being achieved. The lack of documentation of firms’ growth and particularly high-growth in the sector, whether organic or otherwise, results in a dearth of information about the type of activity social enterprises are engaged in, and of the factors catalysing or moderating their performance. The increased importance of the social economy and its ability to contribute to a thriving larger economy, at a local and national level, is currently central to government policy and a keen source of interest to academics. This paper aims to identify if high-growth is happening within the social enterprise sector and to establish some of the factors attending or affecting the performance of high-growth social enterprises. Moreover, the paper aims to investigate and to develop hypothesis relevant to variations in performance within the sector.
Approach
A random sample of Community Interest Companies in the UK was selected and sampled through an online questionnaire. To analyse and evaluate the occurrence of high-growth firms the OECD’s definition of high growth was used. Other theoretical constructs used to model the collection; analysis and evaluation of data, include Birch’s (1981) typology which classifies enterprises as gazelles, elephants or mice. Various statistical tests were applied as appropriate probability sampling technique.
Results
Findings will establish if high-growth companies exist amongst social enterprise firms and discuss factors attending that growth. The results will also highlight how growth is being achieved by these firms according to an organic versus inorganic typology. The paper will conclude with a discussion of whether market and product factors are significant to the occurrence of high-growth in social enterprise firms.
Implications
For high growth to be facilitated in the social economy, or to increase, there needs to be an understanding of the sector’s performance and the factors contributing to success. The future of the sector depends on theorists and politicians being aware of the key attributes of the sector, its tendency towards growth, the characterisation of this, and in the development of theory which explains how high-growth occurs, and how this process can be developed and enhanced.

Value

The paper contributes to our knowledge of high-growth in the social enterprise sector and characterisation of firms’ performance according to two approaches, organic and inorganic growth and Birch’s typology. This paper will provide a valuable baseline to establish firms’ performance within the sector for future longitudinal studies designed to measure the effectiveness of government intervention. It will also provide an understanding of the factors attending firms’ exceptional performance in the social enterprise sector.