Healthcare is a promising area for social investment

More health social enterprises are being launched, but they'll need access to capital and new skills to succeed, says Rod Schwartz of ClearlySo.

Rodney Schwartz
Rodney Schwartz

Social investment has appeared poised for rapid expansion for some time now, but if it is to fully realise sustained long-term growth, it must find a way of tapping into the vast reserves of capital sitting with institutional investors.

That is easier said than done, as illustrated by the report last year into investor perspectives on social enterprise financing, by Katie Hill. It revealed that they would be more likely to become involved with social investment if it could offer bigger opportunities. However, developments in the health sector suggest it might be about to provide the kind of opportunity they are looking for.

This government seems intent on more services being taken on by social, mutual and community-owned enterprises. It is encouraging that front-line staff are beginning to form new social enterprises - a prime example is Central Surrey Health. We're also seeing new social businesses supplying innovative services, such as Patients Know Best, which provides an advanced software system that allows patients to control their own data.

These organisations, and others like them, offer an innovative way to answer the seemingly unsolvable conundrum of retaining key services while delivering the cost savings the government feels are necessary. However, they face a daunting challenge in competing in the corporate environment and proving their worth to commissioners.

If they are to thrive they will need two things: access to capital and new skills.

The challenge of launching a social enterprise is a world removed from working with the NHS. At ClearlySo we're helping with seminars outlining some of the main obstacles - such as VAT and how to make the leap beyond that initial contract and compete with the private sector.

We see this area as being crucial in the social investment sphere. Not only is there an undeniable need for the capital and expertise individual investors can offer, there is also a real potential for growth, with the government eager to encourage those organisations that offer social value to take on these services. If we can support the growth of these spinouts, this could be the opportunity potential social investors have been looking for.

Rodney Schwartz is chief executive of social venture capital website

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