Social Enterprises Can Help Drive Social, Economic Growth 1

Tuesday, June 2nd, 2015
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Dulux Exsulite Construction – 300 x 250 (expire Dec 31 2016)
Joe Hockey
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There is a new breed of Australian social entrepreneurs operating in the construction industry who are creating inspiring social enterprises which trade for a social and/or environmental purpose.

These social enterprises feed their profits back into the communities in which they operate rather than to private shareholders. Most are located in our most disadvantaged communities, providing employment opportunities for Australia’s most marginalised groups who are normally excluded from the workforce such as the indigenous, disabled, ex-offenders, long-term unemployed and other minority groups.

These social enterprises represent a largely untapped and innovative way for businesses operating in the construction industry to engage more effectively with the communities in which they build, providing potentially life-changing opportunities for the most vulnerable and disadvantaged in our society.

Many forward thinking public and private clients are recognising their crucial leadership role in encouraging this new ‘third economic sector.’ New Indigenous employment policies (such as the NSW Aboriginal Participation in Construction Policy) and social procurement guidelines being produced by state governments and major private clients with a social conscience are requiring firms tendering for new construction contracts to demonstrate some kind of social value in their bid in addition to complying with traditional tender criteria such as price, time, quality, safety and the environment.

Following similar trends in the US, UK and EU, where social procurement legislation is fast changing traditional procurement practices, it is almost certain that in the future Australian construction firms (and anyone in their supply chain) will also be required to compete on their social credentials, not just on price. This will mean that they will have to measurably demonstrate that they are contributing to the communities in which they build and that they don’t just deliver great new buildings and infrastructure, but that the process of constructing them also provides local jobs, training and other community benefits too.

However, while much of Australia’s construction industry is world-leading in successfully integrating environmental improvements into new projects, the vast majority of companies have much to learn in developing effective strategies to deliver and measurably demonstrate the social impact of business activity in the community. While a few leading firms are beginning to engage with social enterprises, recent research shows that most companies in construction lack the knowledge, experience and relationships to engage effectively.

None of these challenges, though, are insurmountable and government, major clients and the community are looking for someone to take a leadership role in this space.

The timing is perfect and a solution is badly needed.

Despite 23 years of continuous growth, more than 10 per cent of Australians still live in poverty and recent research shows that two million are trapped in a cycle of long term unemployment, economic inactivity or underemployment. Young people are especially vulnerable; 41.7 per cent from the poorest backgrounds are disengaged from work or study, more than double the 17.4 per cent in the most affluent group. Indigenous students fare by far the worst. In some areas of Australia over 60 per cent are not fully engaged in work or study.

In last month’s Federal budget, Treasurer Joe Hockey announced a $5.5 billion growth package aimed at stimulating grassroots innovation and enterprise throughout the Australian economy. The government is looking to rely on small business and entrepreneurs to reconfigure the Australian economy bottom-up, moving it away from resources and toward a new and sustainable growth trajectory. When considered alongside country’s planned infrastructure pipeline ($20 billion on the table in NSW – plus the Federal government’s $50 billion transport infrastructure roll out) we have a once in a lifetime opportunity to work with the government get more for our public money and leverage public spending to address growing social inequity and disadvantage in our society.

The Productivity Commission Report into Public Infrastructure limited its analysis to the economic and productivity benefits of the planned infrastructure pipeline. Yet we know that at its best, construction and infrastructure projects can have a transformative impact on local communities, regional economies and national prosperity. Construction projects come-and-go but communities stay.

After an unprecedented three Royal Commissions into the construction sector over the last 30 years, such a positive legacy would be some badly needed good news!

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  1. Fred Rickson

    Especially as the manufacturing sector declines, the construction sector will be an increasingly important source of opportunity for disadvantaged Australians, especially those whose schooling has been less than optimal and who may be better suited to an environment of working with tangible objects rather than to one in which extensive educational credentials are required.

    It is also the case that disadvantaged Australians, with the right kind of training, mentoring and support, do represent a valuable source of labour for the sector in an environment whereby the number of new apprentices coming through does not appear to match the skills being lost due to retirement. Programs like the enterprise program at Boystown prove that if done well, it can work.