Rural Social Enterprise Hub
Themes from the research literature on rural social enterprise
This paper covers themes from the academic literature on rural social enterprise. It is not a comprehensive academic literature review, but rather themes taken from reading some key articles listed in the bibliography at the end.
Many of the themes will be very familiar to practitioners but have been drawn out to start a discussion on research areas that are of interest to rural social enterprises. In their introduction to a special edition of the Journal of Rural Studies, Steiner et al (2019) conclude that despite a growing published knowledge base, the evidence is ‘patchy’. They also conclude ‘that policy reference to rural social enterprise is sparse’ and that ‘policy shows little reference to the research base’.
If we are to start to identify what is different about social enterprise in rural areas, what the implications of this are for future support and what the wider world of social enterprise might learn from the experience of rural and remote rural Scotland, it is useful to start to think about what that agenda looks like.
Size and scale of rural social enterprise in Scotland
An overall picture is provided by the Social Enterprise in Scotland Census (Social Value Lab 2019).
- 33% of all social enterprises in Scotland are in accessible rural and remote rural areas. These areas have just 17% of the population.
- Remote rural areas account for just 6% of Scotland’s population but house nearly 20% of social enterprises.
- Rural areas show the fastest growth over the period 2015-2019; 22% compared to 15% for urban areas. There were 1,644 social enterprises in rural areas in 2015; by 2019 this had increased to 2,012.
- There are 23 social enterprises per 10,000 people in rural areas as compared to 9 in urban areas.
- The top three regions per 10,000 people are islands: Shetland (47), Nan-Eilean Siar (45) and Orkney (31). These are closely followed by Argyll and Bute which also includes island communities (29).
- The average age of rural social enterprises is 25.6 years and median income is £26,600. This compares to 21.2 years and an average income of £147,900 for urban social enterprises.
- Rural social enterprises are more densely clustered and focus on solutions to unique rural challenges; community centres and halls, early learning and childcare, property, energy, utilities and land.
- 27% of rural social enterprises are located outside population centres containing more than 500 people.
- 24% of all social enterprises are community enterprises that cover a neighbourhood/ community and are accountable to people in that area. These are a key feature in rural areas.
- 37% of rural social enterprises report response to closure of local services as their reason for starting trading.
The potential of rural social enterprise.
Studies highlight the potential of social enterprise particularly in relation to the development and delivery of rural services and rural sustainability.
Earlier studies address this in relation to the ‘big society’ agenda and more recent ones, the Scottish policy agenda with a focus on community empowerment, co-production and a move to an economy focused on well-being. All, however, suggest the need to adopt a critical approach to a policy agenda that might look to communities and community based social enterprises to compensate for the withdrawal of public services. They highlight the challenges of this agenda and the different elements that need to be in place to support the development of rural social enterprises.
In the Scottish context, Steinerowski and Steinerowska-Streb’s (2012) study of stakeholder views in the Highlands and Islands concludes that social enterprise does have a role to play in addressing rural sustainability but that it equally needs to be sustainable itself and will require specific tailored support to achieve this. This is a theme in a more recent article by Steiner and Teasdale (2018) that argues:
… social enterprises can potentially enable an integrated approach to addressing local issues at the local level. They can create locally responsive services that fit the rural context. However, unlocking the potential of rural social enterprise may require moving beyond traditional policy silo approaches that treat economic development, community cohesion and public services as separate and disconnected since national policy-making frameworks have not always translated into practice at the rural level.
Farmer et al (2012) draw on the experience of the O4O project that worked across four European countries to investigate whether and how it is possible to harness the energies of older people in the development of community social enterprises to provide older people’s services. They conclude that communities can deliver services through community social enterprise if the right partnerships and strategies are in place. Drawing on material from the same project, Munoz et al (2015) focus on how four different communities were supported to create social enterprises in the field of health and care in four different communities. They argue that far from a straightforward linear process (their initial model had four neat stages) what emerged, was more organic and complex with a number of different points at which things might flounder. In the Irish context, O’Shaughnessy et al (2011) highlight the fragility of a social enterprise providing transport in a rural area given changes in government priorities. This was despite the service being highly valued by those who used it and their finding that it was providing a ‘valuable social service’ and should be funded accordingly.
Kelly et al (2019) consider the extent to which the activities of social enterprises in the Highlands and Islands can address the current policy objective of tackling social isolation and loneliness even when this is not their key focus. They argue that high levels of volunteerism and participation in rural areas can counteract service withdrawals and that ‘…for this reason, rural communities can be viewed as the perfect breeding grounds for social enterprise activity that solves existing problems and contributes to their long-term sustainability’. While there is evidence of impact in relation to addressing social isolation and loneliness for those in contact with social enterprises, they argue that sustainability is an issue given the demands on volunteers in small communities, potential lack of expertise in running social enterprises and the impact on the personal life of staff and volunteers involved.
Further afield, Richter (2017) in his study of how two social enterprises in Austria and Poland developed new responses to challenges in their rural areas, argues that rural social enterprises are important change makers ‘because they develop new solutions to social challenges and mobilise resources and support in networks and institutions that were rarely accessible to rural communities before their appearance’.
In his work on stakeholder views on the role of Development Trusts, Zografus (2007) finds two main discourses on social enterprise; one ‘reformist’ and one ‘radical’. The reformist discourse sees social enterprise as an extension of existing economic systems engaged in activities that the private and public sectors have withdrawn from. In contrast in the ‘radical’ discourse, social enterprise represents an alternative vision for running economic and rural affairs. The radical discourse further divides into three further discourses.
‘Anti-commercial radicalism’, sees social enterprise as a vehicle for participatory and bottom up rural regeneration where the social impact is more important than commercial and service delivery aspects of the organisation.
‘Radical pragmatism’ recognises a central role for community in the workings of social enterprise and rural regeneration but equally recognises potential limitations which the state has a role to address.
‘Small r’ radicalism’ places greater stress on the grass roots element of community participation and avoidance of any dependency on the state.
Opportunities and challenges.
Studies highlight both the opportunities provided by the rural context for social enterprise development as well as the challenges.
Steinerowski and Steinerowska-Streb (2012) cover four ‘promoters’ of social enterprise that are often unique to the rural context. The first is the market context created by private and public sector withdrawal. This can create opportunities for new services/ products with few local competitors.
The second is the culture of self-help. Social enterprise can tap into what he characterises as an existing culture of looking after yourself that can develop in the face of limited services. This equally links to ideas of dense social networks in rural areas (Hofferth and Iceland 1998) and high levels of trust and civic participation (Dale and Onyx 2005) that social enterprises can draw on. Skerratt et al (2012) highlight a higher number of charities per head in rural Scotland as compared to urban areas and that people in rural areas are more likely to have volunteered formally than their urban counterparts. The review of rural social enterprise in England (Plunkett and DEFRA 2011) argues that rural social enterprises are able to operate business models in areas where private and public support providers cannot by ‘unlocking the help, support, energy and enthusiasm of an army of volunteers but also through communities feeling greater ownership of the service’.
This relates to the third ‘promoter’; support from local communities. Steinerowski and Steinerowska-Streb argue that given a lack of access to services and markets, rural communities are more likely to value any new services/ products provided by rural social enterprises. Organisations that develop from within communities and draw on detailed local knowledge are able to respond to the changing needs of their specific community in turn creating services/ products that are likely to be highly valued. Finally, the fourth is the fact that rural social enterprises are also often small. This can increase flexibility and the ability to be agile as needs change thus building community support for social enterprises.
Interestingly there is limited material in these studies on natural assets and the opportunity within rural communities to build on their natural assets in terms of farming, food production, renewable energy and tourism.
The challenges of the rural context can equally create barriers to social enterprise development. The key areas considered across the literature are distance from markets, sparse populations and issues of de-population along with market failure and withdrawal private and public sector services. All relate to the overall sustainability of fragile rural communities within a wider austerity agenda.
Barraket et al (2017) considering the rural context in Australia argue that ‘in scarcely populated rural areas, community self-reliance and innovation are regularly described responses to thin markets and limited public services’. In the Scottish context, Steiner and Teasdale (2018) state that: ‘Rural areas frequently face challenges of limited economic development due to low profitability, the withdrawal of public services seen as economically unviable, and challenges to community cohesion caused by demographic and geographical factors’ and further that:
The majority of interviewees echoed the academic literature in stressing that the remote and rural context creates specific barriers including challenges relating to low population density, isolated communities, lack of larger town centres, long distances to travel, a lack of efficient public transport and well-developed infrastructure.
Additional issues covered are a smaller workforce and skills base to draw on which may inhibit larger project development (Steinerowski and Steinerowska-Streb 2012) and the small market size which means that social enterprises need to develop ideas that do not impinge on, or compete with, existing businesses.
These factors are predominantly structural and unlikely to change and so social enterprises need to adapt to the particular set of factors in their local area and adopt strategies that minimise the impact of barriers while making full use of their unique opportunities.
Features of rural social enterprise.
How they achieve this balancing act is the subject of studies into particular aspects of rural social enterprise.
In a study of how two social enterprises developed innovative responses to rural challenges in Austria and Poland, Richter (2017) uses social network analysis to look at the intensity, direction and quality of exchanges between the different interactions of the main social entrepreneurs involved. Open technology labs were developed in Austria to address the issue of attracting and retaining skills within rural areas. In Poland the development of a theme village was used to diversify both the workforce and the economy in the post-communist era.
Detailed knowledge of their local area and the embeddedness of the social enterprise in the local community is seen as key to identifying social needs and developing innovative solutions. The high level of trust and credibility that stems from this provide the basis for adopting and implementing new ideas but may not be the source of innovation. Innovation, he argues is often the result of a recombination of existing elements, grasping new ideas and insights and applying them in a different context. The extent of social networks of the main stakeholders in both enterprises provided access to people with knowledge and ideas not available locally and the innovative power of the social enterprises came from their ability to connect their communities with groups and networks at regional, national and international levels.
He further argues that:
The influence of rural policymakers is limited because they usually operate at the lowest level of the political hierarchy. Local policy makers have little power, limited financial resources, and often no direct access to the knowledge and news discussed in national and international networks. Compared with local politicians, rural social enterprises have more freedom of action. By using less hierarchical network contacts, they are able to grasp information, trends, opportunities, and resources directly and far faster, thus bypassing the political hierarchy.
In their study of resourcefulness in 11 small to medium social enterprises in Australia, Barraket et al (2017) draw on entrepreneurial theories of resourcefulness to consider how locally-focused social enterprises resource themselves and, in turn the communities they serve.
A key behaviour they describe is ‘bricolage’; making do with the means at hand. This, they argue, is particularly useful in examining social enterprise as it presents one of the few accounts in the entrepreneurship literature ‘of behaviour that is distributed and collective, rather than enacted by heroic individuals’. They also highlight the idea of the ‘social bricoleur’ as ‘a distinct type of social entrepreneur that is characterised by deeply embedded responses to local community needs’.
A difference they find between urban and rural social enterprises is that those in rural areas make greater use of the financial and physical assets accessed through networks within their communities. These include community finances such as savings to support start- up and capitalisation and disused or underused physical asset owned by local governments. In contrast urban social enterprises make greater use of ‘assets available through corporate relationships and structured philanthropy’. They also highlight the importance of boards and their networks as important mechanisms for accessing resources.
These findings are supported by Smith and McColl’s (2016) comparative study of six social enterprises in urban and rural Scotland. They describe the rural social enterprises as ‘local businesses being run for local people’. They developed from the actions and interactions of those living and working in the area and the ‘need for a sustainable, co-operative and collaborative effort’ to sustain employment and well-being. In contrast, in the urban social enterprises they found community ‘defined in relation to the social purpose of the enterprise and formed around a shared experience of disadvantage’. Development was more shaped by policy and led by individuals often with a business development background.
In their study of social enterprise in rural North West Tasmania, Eversole et al (2013) find that they have a particular relationship to local places and local communities and are underpinned by a strong passion to create change at a local community level. The three social enterprises studied although very different in size, structures, mission and age, were all strongly embedded in their local communities and able to mobilise a multiple range of community resources and assets. These included paid and voluntary labour, formal and informal business transactions, economic, financial, environmental and cultural assets. While ‘place based’ and described as ‘deeply contextualised development actors’, the social enterprises were not ‘place-bound’; they saw their work and relationships as based in, but extending beyond their local community.
While much of the social enterprise literature concentrates on the role of the social entrepreneur, the single ‘heroic’ leader, that on rural social enterprise has more emphasis on ideas of distributed and collective leadership. Munoz et al (2015) argue that less attention has been paid to social enterprise development that is ‘initiated and sustained by collaborative citizen-based activity’. They highlight the importance of building trust with key citizens able to relay information through informal community networks as a key first stage of establishing legitimacy within the O4O projects followed by that of group coalescence and the setting up of an organisation that is ‘fit for purpose and sensitive to local needs and culture’.
This reflects the findings of the earlier Carnegie UK Trust (2007) action research project into community led service provision in rural areas that developed a model of six elements essential to success including community backing and a governance structure that ‘operates in a business-like manner within local boundaries to meet community needs’. Barraket et al (2017) highlight the importance of collective ownership models and engagement of the wider community in organisational governance on working groups and boards as a building block of the community embeddedness of rural social enterprises.
Onyx and Leonard (2010) look at five case studies from Australia, South America and Sweden of small rural towns (less than 200 people) that had developed a project with clear social or economic benefit. In those that were successful they found a form of leadership that they suggest could be ‘social entrepreneurial leadership’. This was a particular form of leadership that was able to mobilise the social capital that was the main resource available in these small towns. They identify seven key elements which include being deeply embedded in the formal and informal networks of the community, of shared decision making and open systems and an ability to maintain optimism, energy and to search for solutions when the project hit obstacles. These were not characteristics of one particular individual but ‘emerge from the interactions of agents at a grassroots level’.
This may equally create issues. While Kelly et al (2019) found positive impacts of social enterprise activity on the level of social isolation and loneliness among people using their services, they report finding a negative impact on the health and well-being of staff and volunteers who reported experiencing stress and burnout from the responsibility of delivering the service alongside sustaining an organisation. Munoz et al (2015) highlight that it can be difficult to identify citizens with time to contribute to social enterprise development given high level of existing volunteering. The 2011 Review of Rural Social Enterprise in England (Plunkett and DEFRA) found that the issue highest on the support agenda for rural social enterprises was the recruitment and retention of volunteers.
Also that as many intermediary organisations are urban based their understanding of the rural and remote rural context can be limited. Steiner and Teasdale (2018) suggest that locally controlled organisations maybe not be as entrepreneurial as they could be. While they found some aversion to risk and making the move from grants to loans they suggest that this might equally reflect a lack of understanding of rural areas among funders and an over reliance on business-like approaches and a push to commercial over social purposes models more suited to an urban context.
Support for rural social enterprise
The literature identifies a range of support issues for rural social enterprises all of which will be familiar to practitioners.
Rural social enterprises are predominantly small organisations (median income £26,000). Steiner and Teasdale (2018) highlight the challenges this can create in bidding for public contracts and using this as a route to income and financial sustainability. They argue that small size enterprises are probably appropriate to the rural context and that an appreciation of the impact of small-scale local enterprises rather than on ‘scaling-up’ by support agencies may be needed to ensure they are sensitive to this. As applied to funding they argue;
Recognising and celebrating the diversity of the social enterprise landscape requires also accepting the diversity of the funding mechanisms necessary to support different types of social enterprise; providing business support for ideas with commercial potential, opening up access to public contracts for smaller social enterprises, but also providing grant funding to those organisations delivering essential rural services at a loss.
The small size of organisations can also act as a barrier to the networking highlighted above as a key contributor to innovation. Networks are often not easily accessible. Given distances involved, making face to face contact is a challenge and rural connectivity often does not make digital networking a viable alternative.
There is also a disconnect between national policy that is world leading in its support for social enterprise and its implementation at local level:
We’ve got a supportive environment nationally. But it is often not well translated into a regional level. Local authorities and procurers and commissioners might be less helpful. There is commitment from the Scottish Government but it often doesn’t transfer into the local level.
Strong linkages to local authorities was found to be an important element in those O4O projects that successfully established community social enterprises. Munoz et al (2015) also highlight the need for community development type support alongside more traditional support for social enterprises.
Future research agenda
In their review of the articles in the special edition on rural social enterprise, Steiner at al (2019), identify evidence in relation to:
The role of networks and social capital in the development of rural social enterprise.
How rural social enterprises respond to public sector retrenchment; the challenges they face and questions of long term sustainability of these enterprises.
They also identify knowledge gaps as follows:
- ‘The relationship between patterns of social enterprise development and sustainability and location characteristics including notions of community identity and capacity’.
- ‘Business models in relation to location or rural outcomes and impacts’.
- ‘More quantitative and spatial work on types of rural social enterprise that survive and thrive, industry sectors and the extent to which their leaders network and learn from each other’.
We are currently building links to create a picture of current research being undertaken and it is anticipated that discussions within the hub will look to influence the future research agenda. It is crucial that any future agenda is developed and led by rural social enterprises and focused on the issues that will make a difference to them.
Issues already identified via the ViSENet partnership are succession planning, the role of social enterprise in creating employment opportunities for young people and retaining population. There is also an interest in ideas of collective leadership and whether this is different in rural, as opposed to urban, social enterprises. The latter also links to the extent to which rural areas can still be seen to be characterised by dense social networks and other cultural factors that create fertile ground for social enterprise development. These ideas will expand in the light of ongoing discussions and engagement.
Barraket, J, Eversole, R., Luke, B. and Barth, S. (2017) ‘Resourcefulness of locally-oriented social enterprises: Implications for rural community development’ Journal of Rural Studies.
Carnegie UK Trust (2007) Steps to Successful Community led Service Provision in Rural Areas.
Eversole, R., Barraket, J., Luke, B. (2013). ‘Social enterprises in rural community development’. Community Development Journal. 49.
Falmer, J., Hill, C. and Munoz, S. (eds.) (2012). Community Co-production: Social Enterprise in Remote and Rural Communities. Cheltenham, Edward Elgar Publishing Ltd.
Hofferth, S and Iceland, J. (1998) ‘Social Capital in Rural and urban Communities’ Rural Sociology 63(4).
Kelly, D., Steiner A., Mazzei, M. and Baker, R. (2019) ‘Filling a void? The role of social enterprise in addressing social isolation and loneliness in rural communities’. Journal of Rural Studies 70.
Munoz, S., Steiner, A. and Farmer, J. (2015). ‘Processes of community-led social enterprise development: learning from the rural context’., Community Development Journal.
Onyx, J. and Leonard, R. J. (2010) ‘Complex systems leadership in emergent community projects’. Community Development Journal 46.
O’Shaughnessy, M., Casey, E. and Enright, P. (2011) ‘Rural transport in peripheral rural areas: The role of social enterprises in meeting the needs of rural citizens’. Social Enterprise Journal 7(2.)
Plunkett Foundation and DEFRA (2011) Review of Rural Social Enterprise in England. Final Report.
Richter, R. (2017) ‘Rural social enterprises as embedded intermediaries: The innovative power of connecting rural communities with supra-regional networks’. Journal of Rural Studies.
Skerratt, S., Atterton, J., Hall, C., McCracken, D., Renwick, A., Revoredo-Giha, C., Steinerowski, A., Thomson, S. and Woolvin, M. (2012). Rural Scotland in Focus.
Smith, A.M. and McColl, J. (2016). ‘Contextual influences on social enterprise management in rural and urban communities’. Local Econ. 31.
Social Value Lab (2019). Social Enterprise in Scotland.
Steiner, A. and Teasdale, S. (2018) ‘Unlocking the potential of rural Social Enterprise’. Journal of Rural Studies.
Steiner, A., Farmer, J. and Bosworth, B. (2019) ‘Rural Social Enterprise – evidence to date, and a research agenda’. Journal of Rural Studies 70.
Steinerowski, A and Steinerowska-Streb, I. (2012) ‘Can social enterprise contribute to creating sustainable rural communities? Using the lens of structuration theory to analyse the emergence of rural social enterprise’. Local Economy 27.
Zografos, C. (2007) ‘Rurality discourses and the role of the social enterprise in regenerating rural Scotland’. Journal of Rural Studies 23.