When profit is not the main motive

Corporate Social Responsibilty has begun to spawn a whole new type of small business

Nowadays, it is not enough for a business merely to make money. Companies also have to demonstrate that they care about the society and environment in which they operate. This notion has caught on to such an extent that the concept it helped to create - Corporate Social Responsibility - has itself become a big business.

But, while this is largely an additional activity indulged in by large companies, a new type of small business is springing up.

Social enterprises resemble their more traditional counterparts in that they have to make some money in order to survive. But profit is not the primary motive. Instead, they are focused on whatever issue or problem inspired them to be established in the first place, in the belief that if this work is done properly the businesses should be sustainable.

Understandably such initiatives have tended not to attract too much attention from venture capitalists and other investors. But it is a sign of the growing acceptance of the concept that the SETsquared Partnership - which brings together personnel from the universities of Bath, Bristol, Southampton and Surrey to exploit technology developed in their laboratories - has attracted a fund from the Department of Trade and Industry to develop a group of businesses in social enterprise.

On top of the £50,000 in seed funding provided by the Government, the programme has attracted a further £100,000 from the four universities.

Social IP is a recently established social and environmental technology enterprise programme headed by Paul Harrod. He says: "The social enterprise business model is a proven means of developing people-centred activities that make a real difference. There is an excellent opportunity to incorporate university research and technology into enterprises that benefit society and the environment."

There are a number of projects already involved in the programme:

*** Effective Landmine Detection: a radar that can build an accurate image of plastic and metal landmines. This could have a huge effect on the lives of people in war-torn regions, as there are 80 million undetected landmines in the world, with a million new ones laid every year.

*** Safe Nutrition for Babies in HIV/Aids-stricken Countries: a plant-derived enzyme, also present in breast milk, is added to formula milk in order to provide resistance to bacteria and viruses for newborn babies. With more than 10 per cent of HIV transmissions occuring from mother to child, often through breast feeding, this enzyme could help reduce infection and reduce illness associated with unclean water.

*** Disaster Relief Water Purification: a water-cleaning process that is inexpensive, requires no energy and is easy to use. The new technology uses an osmotic driver, such as sugar, to obtain a sterile drink from any water source, thereby reducing the time and cost required to transport containers of clean water during disasters.

*** Generating Successful Crops in Poor Soil Conditions: biodegradable plant chambers that harbour and grow seedlings in otherwise uncultivatable soil. It could make a huge difference to agriculture in developing countries subject to drought and extreme weather conditions.

*** Access to Information: a language translation software package for mobile phone access to the internet that converts English text to speech in other languages. In parts of the world where there is little access to the internet but mobile phones are used this could improve access to important information.

*** Learning Difficulties Diagnostic Screening for Pre-schoolers: testing for pre-school children disguised as computer games. The test calculates the various methods and speed that the child uses to solve the games to establish possible learning difficulties. This could help to prevent the problems associated with self-esteem and confidence caused by learning difficulties not being diagnosed until later in children's school careers.

Harrod says the initiative resulted from a realisation that, while there was "a real opportunity" for the research being done in the universities covered by the SETsquared Partnership to have social benefits, such projects were "probably not going to interest conventional venture capitalists".

However, with the partnership's proven record in developing businesses out of university research - in the last two-and-a-half years three companies in the programme have floated on the stockmarket with a total market capitalisation of £150m and an average time to market of less than two years - he and his colleagues are confident that those skills could be applied to social enterprises.

"The projects are not yet fully fledged businesses. It's still early days," he adds. "But we've already got interest from later-stage investors and entrepreneuers identified to run some of them."