Social enterprises are businesses run for a social or environmental purpose, to deliver benefits to the community and not to generate profits for individuals or shareholders. Good examples range from the Appin Community Cooperative in the Scottish highlands to Coin Street Community Builders in London. Social enterprises have a growing role to play in the British economy, not as a "cranky" subset of the private sector, but as part of a truly alternative economic system - a third way, distinct from both the private and public systems of ownership and management. John Pearce describes how social enterprise might come to dominate the economy of Anytown. He examines the key values which distinguish this from other systems and argues both for a recognised legal status for social enterprises and an independent development infrastructure managed by the sector itself. He demonstrates the social - and environmental - added-value they contribute to society, and outlines a five-stage process of social accounting.

John Pearce has been involved in community-based development work for over 30 years. He now runs his own consultancy, is an active director of the Community Business Scotland Network and has developed a methodology for social accounting and audit which permits community-based organisations to measure and report on their social and environmental impacts. His previous Gulbenkian publications are 'At the Heart of the Community Economoy' (1993) and 'Centres for Curiosity and Imagination: When is a museum not a museum?' (1996).