The Office for National Statistics has just released updated estimates of the value of human capital. For ONS ‘… the stock of human capital accounts for what skills people have and how much they earn and what qualifications they have, as well as estimating how much longer they will continue to work’.
As such, ONS argues, the value of human capital is often higher in younger workers, which have more years in the labour market ahead of them.
We can look to the historical writings of Adam Smith for the source of the concept for Human Capital, but we owe the the modern Chicago School of economists for this contemporary application of the theory, we would argue.
This modern theory was popularized by Gary Becker, an economist and Nobel Laureate from the University of Chicago, Jacob Mincer, and Theodore Schultz. However, more recently the new concept of task-specific human capital was coined in 2004 by Robert Gibbon, an economist at MIT, and Michael Waldman, an economist at Cornell. The concept emphasises that in many cases, human capital is accumulated specific to the nature of the task (or, skills required for the task), and the human capital accumulated for the task are valuable to many firms requiring the transferable skills.
The new ONS report delineates the following key estimates…
In cash terms the stock of human capital in the UK grew 1.8%. However, once the effects of inflation were removed human capital actually fell by 0.8%. This was the first fall in human capital stocks since 2012, reflecting slower growth in earnings relative to inflation.
In 2017, the UK’s ‘real’ full human capital stock was £20.4 trillion, more than 10 times the size of UK GDP.
The estimates highlight that in 2004 the pay premium for obtaining a degree was 41% but by 2017 this had fallen to 24%.
The ONS analysis also shows that between 2011 to 2017 the average stock of individuals over 35 grew by 7.0%, while the stock of those between 16 and 35 only grew by 3.6%.
We recently published The Size of the UK Social Enterprise in 2018 – if we believe, as we do, that the social economy is now a significant influencer of UK trade and business development – then it is pertinent to note that the value of ‘real’ gross human capital is ten times more than GDP.
The social economy must, therefore be a contributor to this value.
Also of note, is the fact that in terms of human capital, according to ONS, … the average stock of individuals over 35 grew by 7.0%, while the stock of those between 16 and 35 only grew by 3.6% over the focus period.
Whether being old and feeling exposed when out after dark, or in full employment but doubting that the employment will continue beyond six months hence, the report offers a defining argument for the deployment of economic and social initiatives that put people, their sense of well being and compassionate economic energy at the heart of government thinking.
It is interesting that even across international borders, within Europe, the similarities in unease and concerns are duplicated across communities, whatever their defining local language.
‘Most of the insecurities reviewed in this policy brief have an economic component but are influenced by other factors too. For instance, perceptions of housing insecurity are influenced by tenant protection law, perceptions of old-age income insecurity are influenced by long-term care provision, and perceptions of healthcare insecurity are influenced by the presence or absence of healthcare coverage’.
The significance of having a ‘secure’ life is widely recognised. The United Nations’ 1948 Universal Declaration of Human Rights tells us that everyone has the right to ‘security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his (or her) control’ (Article 25).
In the key findings of the report it is stressed that ‘…only 1% of the EU population enjoys the highest level of security in all five types of social insecurity studied in this brief: personal, housing, healthcare, employment and old-age income. If more types were added, there might be nobody in the EU who feels free of any form of social insecurity’.
The five key measures of insecurity that the report comparatively assesses are…
…personal insecurity – of being personally unsafe (from crime, for instance)
…housing insecurity – of losing one’s home
…healthcare insecurity – of being unable to afford healthcare
…employment insecurity (for those in employment) – of losing one’s job and
being unable to find a new one
…old-age income insecurity – of not having an adequate income in old age
In their policy summary the report authors point out that government and state actors in the provision of services ‘…should be careful not to underestimate how widespread feelings of social insecurity are, especially more moderate forms. These may be early indicators of problems, so preventative policy-making should try to detect better, more muted levels, as well as higher levels of insecurity’.
This report attempts a broad assay of community feelings across Europe. No small scoping exercise in itself, but when executed as here, then it provides a wealth of evidence and support for the argument that the social enterprise model should become the defining economic and civitas service provision model.
We would argue!
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A series of free events at your local Business & IP Centre, from the British Library and local authorities.
Not overtly dedicated to the Social Marketplace, but a day of free engagement, idea exploration and support-signposting from a variety of key players in the enterprise and tech market encouragement sectors.
DATE AND TIME: Thu 20 September 2018 09:00 – 16:30 BST
The nominations list for the 2018 UK Social Enterprise Awards have just been published.
What a cavalcade of fantastic projects, across many impact themes, and a wide geographical spread. The list itself is evidence alone of a thriving, multi-dimensional social enterprise topography in the UK.
With the weather getting a little cooler and wetter, now is the time to turn to cultivation, at last. In this short article, you can find some ideas, concepts and web links to help you craft your project ideas for a social enterprise in the hope that it flowers into reality.
Our notes are broad picture elements for discussion and sparking ideas.
No-one knows your community, group or collection of committed individuals for the project like you do!
You might be creating an agenda for the discussion of first principles, using the notes as a talk to support your work or pulling out some key concepts so that you can explain them to your group or community. We hope that our notes help?
We would certainly use the content, and distribute copies, if you asked us to speak about your project at an event or a meeting. That way, conceptual information becomes grounded knowledge at the local level, we would argue.
If you embraced all the techniques and tools linked to in the narrative perhaps the noise would drown out the signal.
It’s sometimes difficult not to sound ‘preachy’, when discussing first principles. That is not our intent. Rather, to use our notes, and the issues to come, to establish some sound footings for everyone to embrace, on every step of the enterprise journey.
If you have yet to take your first community group ‘conceptual’ step into the ‘seed-bed’, we hope you find something here.
As always, if we can help, just ask us.
Share SocEntEastMids with your colleagues today...
Social Enterprise UK, with the support of generous sponsorship by NatWest Bank, have just published their ‘Start Your Social Enterprise’ booklet.
This is a great primer on social enterprise, clearly laid out and packed with information for those of you about to start your SocEnt journey.
You can view, print or download a copy of this publication here (pdf).
The chapters include sections on Mission, Market and Money, as well as Marketing and Branding and the all important Business Plan.
There is also a very clear grid format page which illustrates the choices of good governance you can pursue, in order to control and support your Social Enterprise ambitions as a community.
We particularly liked the SEUK section on Looking After Yourself.
It is easy, in the whirl of excitement and drive to make things happen to forget about individual well-being in pursuit of the goal. We have repeated the sensible advice below…
”Pay yourself properly – as soon as is practically possible, pay
yourself properly; some social entrepreneurs pay other people
first in the organisation, but everyone needs to live…
Find a mentor – a mentor is someone independent outside your organisation
to talk to who can provide advice and support to you; organisations like
UnLtd and the School for Social Entrepreneurs will often link you to mentors
as part of their support, but you may be able to identify your own…
Be part of networks – there are lots of local, regional and national groups and
networks for social enterprises, from national bodies like Social Enterprise UK
to the Social Enterprise Places across the country to local and regional networks
like SELNET in Lancashire or SEEE in the East of England; they will often run
events, send newsletters with information, and provide connections to others. (…and SocEntEastMids too…Ed).
Don’t neglect family and friends – take time out, spend time with
the people you like and love, and you will be better refreshed, more
focused and more productive when you return to the enterprise…
Keep learning – this is a fast-moving world, and there are new developments,
opportunities and information to find out about; events and newsletters can
help with this, as can podcasts or books on business and social enterprise…”
Source: Social Enterprise UK, Start your social enterprise, p.13 Accessed 02.08.2017
A useful addition to your armoury when building your community business to effect change.
We recommend it as a great starting point for changing the world, or even a bit of it in the immediate vicinity at first!
Sometimes, in a committee room or at your office desk, starting a new community enterprise – or entertaining the very thought – can be a bit like the image above.
Here at SocEntEastMIds we are trying to build a new starting point. A resource for information about social enterprise, news and stories from successes, and those that didn’t go well. To promote understanding and to get easy access to a community project road map.
First principles are important and you can find a good read about building social businesses on our Good Reads page here. We will be expanding our library of good reads in the future. (It’s been our road-map for a long time now too…Ed.)
Having a chat about your idea is also important too. Not all project ideas grow, but those that do invariably begin by talking to experienced practitioners, even informally. You get an idea about a business landscape before you enter it. SocEntEastMIds is happy to have a conversation – contact us here.
The British Council have published a great resource, Social Enterprise in the UK, a sort of ‘SocEnt primer’ and an illustrated overview of the social business sector. One of the best we know.
It covers everything you might need to know about social enterprise and community business – from governance to diversity, from incubation to consortia.
Social Enterprise East MIdlands is a UK registered Limited Company Company No: 10862936 Our mission is to foster grass-roots interest in the Social Economy - supporting community enterprise development in our six counties region.
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