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Social capital is more than economic efficiency and divisive leadership

By Cheryl Kernot - posted Wednesday, 10 September 2003


They contribute to local economic development by providing goods and services that the market or the public sector are unwilling or unable to provide: developing skills; creating employment; providing low-cost personal loans; and enhancing civic involvement through the number of volunteers involved.

They help to drive up economic productivity and competitiveness, they contribute to socially inclusive wealth creation and they enable individuals and communities to work towards regenerating their local neighbourhoods.

When I was federal Labor spokeswoman on employment I incorporated social enterprises into the party's election platform. Now I am continuing that work at the School for Social Entrepreneurs in the east end of London. Most of the students here have a record of successfully harnessing the social capital of the deprived areas in which they live.

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They have set up and run, among other things, an employment cafe, a fair trade coffee roasting business for disabled employees, a nationally organised, locally delivered scheme of assistance for the homeless, mobile food co-operatives producing fresh fruit and vegetables accessible to public housing tenants without transport or child care.

Their solutions to community need are often unique and their passion and energy to build community networks and trust is inspiring. Unlike conservatives, they believe that building strong communities, first, enables the growth of strong individuals. They don't believe in trickle down; life hasn't delivered it to them!

A recent evaluation shows that 75 per cent of our students have created between one and five jobs, eight per cent have created between six and ten jobs, and eight per cent have created more than 21 jobs.

There's more than the John Howard model of corporate philanthropy (give money to do "good") at work here. There are genuine partnerships between business and the local community, where money builds capacity, not sponsorship or naming rights, and where bridging social capital (connections between those with differing levels of power or social status) is created and sustainable social enterprises supported.

All this is not separate from, but rather an important component of, good economic management.

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Article edited by Merrindahl Andrew.
If you'd like to be a volunteer editor too, click here.

This article was first published in The Age on 5 September 2003.



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About the Author

Cheryl Kernot is Director of Social Business at the the Centre for Social Impact, UNSW Sydney. She was a Senator for Queensland and Leader of the Australian Democrats from 1993 to 1997 before joining the Australian Labour Party and becoming the Member for Dickson (Qld) in 1998.

Other articles by this Author

All articles by Cheryl Kernot
Related Links
Chery Kernot's home page
Feature: How to engage with citizens
School for Social Entrepreneurs
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