Prime Minister David Cameron and the UK Coalition Government have launched their big society concept, an attempt to redesign the role of Government and nurture community entrepreneurialism.

The question for investors is, what opportunities might arise from this initiative?

1.     What Is The Big Society?

The concept of the big society is based on empowering communities, encouraging civic engagement, devolving power through a de-centralised process, supporting not for profit enterprise and increasing the transparency of Government data.

Out of all of these objectives it is perhaps the support for social enterprise and the traditionally viewed not-for-profit third sector that is of most interest to the investor.

2.     Social Enterprise Is Not About Not Making Money

There is something of a public misconception about what a social enterprise actually is. They do not have to be charities and neither do they avoid making money, in fact they can only continue to exist if they do make money. In the case of a social enterprise the primary goals are to make money but to do so in a values driven way that serves a social purpose.

Investors can watch with interest to see if this business model begins to challenge the traditional for profit concept.

3.     A New Kind Of Business?

Whilst stock market investors are unlikely to suddenly see a wave of investment opportunities in the third sector, investors need to be aware of this movement since for the medium term at least, the Coalition Government will push its big society idea.

A big society bank is to be established using funding from dormant accounts, and these assets will be used to provide finance for the best examples of social enterprise. Expect to see mainstream banks offering similar services.

Cameron and his big society idea includes proposals like enabling communities to run parks and libraries, greater power over housing developments, powers to generate their own energy and increasing influence over the police force. If it came to be, these big society proposals could make a difference to how business has to think about how it operates.

If it were to be successful it will impact on the way that businesses, including those listed on the London Stock Exchange, operate in the communities they serve. This will impact on large blue chip companies as well as those with a more regional focus. At the bare minimum it will mean that business will need to have a much greater community focus and a demonstrable capacity to accommodate a community voice.

Take time to reflect on the companies that currently make up your investment portfolio and consider what impact, if any, the big society concept may have to them. It may all turn out to be hot air, but in business as in life, change is the one constant and the intelligent investor should be prepared for it.

 Jamie E Smith is the author of Making Money From Stocks And Shares

 

This content was provided by one of our users, Jamie