CICs are invading the South West. Before you panic and run for the hills, this is not some kind of alien attack. CIC – often pronounced ‘kick’ – stands for Community Interest Company and this relatively new type of business is seen as a solution to the current economic paradox: how to create wealth and jobs but do so responsibly. Plymouth and Devon are leading the way with amongst the highest rates of creation of CICs per head in England.
Most people probably don’t know much about them but CICs are popping up all over the county in all kinds of sectors. These companies are active in many areas from graphic design and energy to providing business space and running sports, health and environmental companies. There are even CICs in the financial services, sailing and the agricultural industries.
CICs are a type of ethical company where achieving a social or environmental goal is as important as making a profit. The first CICs were formed in late 2005 and, at the time of writing, there were 35 in Plymouth and 133 in total in Devon. With well over a third of these created in the last year it is fast emerging as an exciting business format for the 21st century. Nationally, the picture is similar with nearly 5,000 CICs in total.
An important feature of CICs is an ‘asset lock’ which ensures that any assets and profits must be used to achieve the good causes that the company exists for. This is what puts the social into social enterprise. This means that while CIC company directors can be paid well, salaries need to be reasonable, transparent and at a justifiable market rate. This is monitored by the CIC Regulator, an independent office appointed by the Secretary of State for Trade and Industry. The regulator also vets applications to become a CIC and sees that they pass a ‘community interest test’ to ensure that activities are carried on for the benefit of the community.
As we inch out of the recession caused, in part, by the excesses of certain avaricious parts of the financial sector, CICs are a viable and ethical alternative and are fundamentally changing the way we think about business. Entrepreneurs are realising that maximising profit for shareholders or owners is not the only way of doing big business.
New trading opportunities to promote the social enterprise sector in Plymouth and Devon are being explored. The Plymouth Social Enterprise Network is becoming more active and has a strong online presence. Devon is also home to a ‘School for Social Entrepreneurs’ which trains people to use their creative and entrepreneurial abilities for social benefit.
CICs are fast becoming the flag bearer for the wider social enterprise movement and are an important part of the concept of the ‘Big Society’ that the government is keen to see develop. However, it is in their potential to transform business that the real excitement lays. The economy is like the heart attack survivor with an unhealthy lifestyle: it has been defibrillated by bail-outs and fiscal stimulus but must change its behaviour to get better in the long-term. There is a clear warning: if we do not radically rethink our business models we are doomed to recreate the same problems in the future. CICs can be the solution and Plymouth and Devon are leading the way. We will be seeing a lot more CICs in future.