Wellbeing economy: Scottish Government should focus on supporting businesses that do the right thing for people and the planet – Hollie Irvine

The cost to the taxpayer of pollution and poverty needs to be factored into the equation when giving state support to companies

The right kind of businesses have a crucial role to play in building a strong, well-being economy that provides everyone with enough to live in safety and comfort while we protect the health of our planet. But this is going to take a lot more than business as usual. And we can’t leave it to corporations like shareholder “cash machine” BP.

As part of efforts to reset its relationship with the private sector, the Scottish Government has established a New Deal for Business group. Involving businesses at the earliest stage of policy development is among its top priorities while “demonstrating how business contributes to a well-being economy” is cited, albeit less prominently.

Rewiring our economy so it’s fit for the challenges of the 21st century will require being deliberate about the types of businesses, operating models, and practices that promote our shared prosperity. It should go without saying that what’s in the interests of businesses won’t always be in the interests of the people of Scotland.

Imagine, for example, that a corporation paying minimal tax wants to set up a new distribution centre where workers are on poverty wages and zero-hour contracts. Any cost-benefit analysis should factor in the impact that struggling to make ends meet will have on employees’ mental and physical health, the long-term impact for their children, as well as the immediate financial cost to governments who will need to top-up inadequate pay through social security benefits.

Recent research from IPPR Scotland, Save the Children UK and the Joseph Rowntree Foundation calculated that Scotland’s economy is missing out on £2.4 billion a year tackling the consequences of poverty. This adds to a growing body of research documenting the extent of ‘failure demand’ in Scotland. This is the phenomenon whereby governments spend vast sums patching up damage caused by problems that are created by the economy, rather than looking upstream to design failings like poverty, homelessness and air pollution out of the system.

It came as a huge shock to finally see the membership of the government’s New Deal for Business Group’s subgroup on a well-being economy along with their recommendations. For example, BP is among those with a seat at the table. It is widely documented to be one of the biggest polluters in the world, recently scaled back its climate commitments and made £4bn in profit in the first three months of the year while people can’t afford to heat their homes.

Scotland is replete with businesses, cooperatives and social enterprises that put the health and happiness of their employees, communities and environment at the centre of their missions and business models. For example, many of Scotland’s craft breweries like Jaw Brew are putting sustainability and independence above expansion and profit, creating a collaborative local economy by sharing production, marketing and distribution with others and providing flexible work that’s rooted in the needs of their communities.

The 'well-being economy' is about more than just money (Picture: Hollie Adams/Getty Images)

Multi-award-winning employee-owned Jerba Campervans provides staff with financial security and a voice in decision-making. Thankfully, Jerba Campervans is among the members of the well-being economy sub-group, but it is lacking the expertise of bodies like Social Enterprise Scotland who would be well placed to advise on the architecture needed to nurture and encourage businesses that contribute to well-being economy goals.

Having spent the last four years running my own digital marketing agency, I know just how much the business support landscape is geared around profit-maximisation. Like a lot of entrepreneurs, I was motivated to create something from scratch, provide myself and others with good jobs and make a difference in my community.

When I started out my business journey, I was on an accelerator course for creative businesses. I remember the first day I went to speak to the panellists about my ideas to conduct my business purposefully and address the digital skills gap where I lived in Perthshire, frustrated and inspired. This and every piece of business support I received along the way centred on putting money in my own pocket. It was as though any other goals had no place in business.

Once I was fully up and running, I made enough money to pay myself, hire freelancers and staff, and cover administration costs. I was in a position to give discounts to charities, social enterprises and solo start-ups. And yet people always pointed out “you’re not making money”, as though providing good livelihoods for three people, benefit to the sector and community wasn’t enough.

I'm now lucky enough to be working with the Wellbeing Economy Alliance, and I am using the business I built to help others start their own projects. I just wish I’d known more about the alternative ways you can run a purpose-driven business when I started out.

Surely the reset we need with the private sector is one where practices and operating models that benefit people and planet become the norm. When asked about the role that business should have, nearly two-thirds of people (65 per cent) think that businesses should help find profitable solutions to the problems of people and the planet.

Building a favourable tax system for purposeful businesses could help make the right thing to do for people and planet become the right thing to do for business. Embedding ‘business purpose’ and alternative operating models in business education and creating entrepreneurship programmes that harness everyone’s ideas would help ensure we are using our collective creativity to support the just transition.

Instead of accepting a reality where a quarter of children grow up in poverty and our exploitation of natural resources exceeds safe limits, if the Scottish Government is serious about building a well-being economy, it needs to be strategic about the businesses we need, and the ones we don’t.

Hollie Irvine is Love Letham project lead at Wellbeing Economy Alliance Scotland and former founding director of Highbeat Digital.