Can universities lead the way in social value procurement? Let’s look at Cleveland, Ohio!

By | July 30, 2014

Universities can be laboratories for a new kind of economic development

Professor Simon Denny from the University of Northampton, UK, has identified an important role for universities: delivering local economic growth and social inclusion. The University has launched the £1 billion challenge for UK universities to spend £1 billion from their £7 billion spending power in businesses that promote social value as well as supplying the needs of the university.

What is social value?

“Social value” is a way of thinking about how scarce resources are allocated and used.  It involves looking beyond the price of each individual contract and looking at what the collective benefit to a community is when a public body chooses to award a contract.  Social value asks the question: “If £1 is spent on the delivery of services, can that same £1 be used to also produce a wider benefit to the community?” (Taken from Social Enterprise UK)

This is a welcome and very ambitious target. However, it can be a challenge for universities to find social enterprises and cooperatives that can supply their needs. Could a local social enterprise provide all of a university’s stationery needs, or catering services, for example?

Why not?  Ohio, Cleveland, USA, has tackled this very problem. Here’s the Evergreen Cooperatives story:

“Launched in 2008 by a working group of Cleveland-based institutions (including the Cleveland Foundation, the Cleveland Clinic, University Hospitals, Case Western Reserve University, and the municipal government), the Evergreen Cooperative Initiative is working to create living wage jobs in six low-income neighborhoods (43,000 residents with a median household income below $18,500) in an area known as Greater University Circle (GUC).

“The Evergreen Cooperative Initiative has been designed to cause an economic breakthrough in Cleveland. Rather than a trickle down strategy, it focuses on economic inclusion and building a local economy from the ground up; rather than offering public subsidy to induce corporations to bring what are often low-wage jobs into the city, the Evergreen strategy is catalyzing new businesses that are owned by their employees; rather than concentrate on workforce training for employment opportunities that are largely unavailable to low-skill and low-income workers, the Evergreen Initiative first creates the jobs, and then recruits and trains local residents to take them”.

Vital to this model are the so-called ‘anchor organisations’: the local universities, hospitals, local government, that will not leave the area as economic conditions change. These anchor organisations work together to develop cooperatives to supply their needs. Each dollar spent on these goods and services stays in the local area and benefits the community. For example, the Evergreen Cooperative Laundry serves the local hospital. The model has been inspired by Mondragon Corporation in Spain, whose university is part of the Social Economy in Higher Education project.

Could universities  lead consortia of anchor organisations and mentor, coach and incubate new businesses which will supply their needs and provide highly democratic, worker-owned organisations? A culture of nurtured entrepreneurship for meaningful work creation within universities seems like win-win.