The economic contribution of community business

Power to Change is an independent social change organisation dedicated to shaping the conditions for community businesses to thrive. Established in 2015, Power to Change has evidenced how community businesses contribute to thriving places by improving local services, reducing social isolation and improving health and wellbeing, among many other impacts. Being locally-rooted, community-led and trading for community benefit, community businesses make life better for local people. Power to Change has played a key role in growing this movement, and there are now 11,000 community businesses across England with combined assets of £744m, employing more than 41,000 people.


Yet, despite extensive evidence of their significant socio-economic impacts, community businesses often remain underappreciated in policy and investment circles. Power to Change therefore sought to commission research to highlight community businesses’ economic value across local, regional, and national levels, providing vital evidence to advocate for increased funding and investment, support and policy recognition for these crucial community assets.


The key aim of this study, conducted by Ortus Economic Research in partnership with Stephen Miller, was to evidence, describe and quantify the contribution of community businesses to local and national economies. Supporting objectives including assessing their role in fostering economic growth and development and exploring their sustainability practices and potential in driving a transition to a greener, fairer economy.

Combining qualitative and quantitative approaches to understand and quantify the economic contributions of community businesses, we provided Power to Change and its stakeholders with robust evidence of economic impact, actionable insights, and case study evidence which demonstrated how alternative business models can add significant economic value whilst also tackling some of the most intransigent and deep-seated economic and social challenges of our times. To demonstrate the vital and wide-ranging role of community businesses, the study focused on contributions made to high street and local regeneration, access to labour markets, delivery of renewable energy projects, provision of affordable housing and creating community wealth.


For the first time, this research provides an estimate of the total economic contribution made by community businesses in terms of Gross Value Added (GVA) output. Our research shows that in 2022, the 11,000 community businesses operating in the UK contributed over £1.5 billion in direct GVA to the UK economy. Including indirect and induced GVA, community business generated a total economic contribution of around £5.8 billion or around 0.3% of total national GVA.


If a full social value-based approach to community businesses’ wider impact on their local economy is applied, their economic contribution increases to nine times that calculated through traditional economic measures. This equates to £95 million in social value in employing people who were previously unemployed; £471 million in volunteering; £183 million in training, and £1.7 million in general health improvements, or the equivalent of freeing up over 30,300 GP appointments.


The real value of community business, however, extends beyond these economic measures. They are often found in deprived high streets, rural villages, or post-industrial towns, providing services and creating employment opportunities where they are needed the most and often where mainstream commercial investment is very thin on the ground.
The report can be read here: https://www.powertochange.org.uk/evidence-and-ideas/research-and-reports/the-economic-contribution-of-community-business/

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