What’s a Transition Enterprise?June 1st, 2012 8 comments
These aspirational criteria help define what is meant by a Transition Enterprise (TE). We think this definition is useful because it helps us clarify the kind of trading enterprises we would like to see, as they best support the wider aims of Transition. It can also help us decide where we might first direct our limited resources, in terms of support.
Other types of commercial enterprises can also help meet the aims of Transition. In fact, a wide range of business models in each local economy can help provide the diversity that helps build resilience, including privately owned for-profits and ‘regular’ social enterprise.
However we wish to focus our efforts on the TEs at this time as they best align with the aims of Transition, and are under-represented. Your other local economic partners may wish to focus on supporting other types of businesses.
You are welcome to refine this definition for use locally, and please share this with us if you do.
Transition Enterprise definition
A Transition Enterprise (TE) is a financially viable trading* entity that fulfils a real community need, delivers social benefits and has beneficial, or at least neutral, environmental impacts.
* viability means to at least meet costs, and means of exchange other than money may be used.
A TE does not have to emerge from a Transition Initiative, it is just the term we are using to help identify those enterprises that have the traits which align with Transition principles. If you have a better generic name than ‘Transition Enterpirse’ please let us know.
Characteristics of a Transition Enterprise
1. Resilience outcome – TEs contribute to the increased resilience of communities in the face of, for example, economic uncertainty, energy and resource shortages and climate change impacts. As part of their community, TEs are also resilient in themselves, seeking to be financially sustainable and as independent as possible of external funding.
2. Appropriate resource use - TEs make efficient and appropriate use of natural resources (including energy), respecting finite limits and minimising and integrating waste streams. The use of fossil fuels in particular is minimised.
3. Appropriate localisation – TEs operate at a scale appropriate to the environment, economy and business sector with regard to sourcing, distribution and interaction with the wider economy.
4. More than profit – TEs exist to provide affordable, sustainable products and services and decent livelihoods rather than to generate profits for others. TEs can be profitable, but the use of their excess profits prioritises the community benefit rather than benefit to investors.
5. Part of the community - TEs work towards building a common wealth, owned and controlled as much as is practical by their workers, customers, users, tenants and communities. They have structures or business models which are as open, autonomous, equitable, democratic, inclusive and accountable as possible. They complement and work in harmony with other TEs.
An enterprise could operate as any one of a number of different types of legal entity, and still meet most of these characteristics.
‘Regular’ social enterprises today serve society in some way, but often don’t address or respect environmental problems as well. They have a ‘social purpose’ which does not always meet a local community resilience-building purpose.
Unlike most private-for-profits and some social enterprises, the trading of TEs should itself contribute to the resilience or wellbeing of the local community (and do no harm elsewhere). For example, it can’t import plastic products from China to sell in a local shop to raise money to fund social projects.
We suggest that this is as far as we need to go with this definition at this stage. Perhaps we can better see these as a set of principles that new enterprises themselves help shape? It’s not yet clear what sort of economy we will see emerging over the next few years, or what types of enterprises will evolve out of Transition.
We will revise this definition as appropriate, apply it with caution and develop a means by which we can evaluate against it, as well as its usefulness overall.
The evolution of local economies that have even a small percentage of enterprises meeting these characteristics is a massive shift from our current globalised capitalist economic system. This list is quite possibly unrealistic to find in many enterprises from the outset, but this will become clearer over time.
Credits : Image Source : Vegetable Garden by maya picture
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