Co-operatives respond to the EC’s Start Up initiative consultation

The confederation of industrial and service co-operatives (CECOP-CICOPA Europe) has responded to a consultation launched by the European Commission to examine the environment for start-ups in Europe.

The Commission is looking to use the information gathered from the consultation to identify possible solutions and design new policies at both EU and member state level to address the needs of start-ups throughout their life cycle, from stand up phase to start up phase and scale up phase.

CECOP’s response calls for initiatives providing constant business support, in terms of services, training and counselling during all the stages of an enterprise’s life, not only focusing on the start-up phase. The organisation is also asking the Commission to involve co-ops in the design and implementation of policies at EU and national level.

The paper insists on the need for support and advice structures to encourage entrepreneurial activities offered at local level and for higher education institutions to establish programmes to support co-operative entrepreneurship.

CECOP believes that providing support services for future co-operative entrepreneurs of existing co-operatives is crucial during the stand up phase when groups attempt the creation of a new company.

“This local presence is crucial in order to provide an adequate service and to raise awareness among potential future entrepreneurs inside communities that could be catalysed into cooperative activities to meet local needs and aspirations,” reads the position paper.

Another measure suggested is introducing co-operative entrepreneurship education in university programmes as well as in other levels of formal education.

According to CECOP, co-ops face a number of difficulties during the start up phase, when resources are mobilised and regulatory requirements fulfilled. The paper explains how access to finance can be a problem because in many countries co-operatives are not considered appropriate models for start-ups. In Italy, Coopfond has launched a project that promotes co-operative start-ups among young people, placing a strong emphasis on new markets.

Co-operatives active in industry and services are in favour of a support provided by universities, in collaboration with research centres and enterprises for the strengthening and implementation of innovative projects. CECOP’s paper points out that innovation should not be reduced only to technology, giving the example of social co-operatives. These co-ops combine organisational and social innovation in order to provide an effective and new offer in health and social care and keep the ownership over the commons inside the community, argued CECOP.

The Commission is also encouraged to promote clusters as a way to access innovation and value chain, by creating horizontal groups like Mondragon co-operative in Spain.

Examining the scale up phase, when successful companies expand their businesses to new markets or innovative ways, CECOP underlines that its member co-ops are driven by long term goals.

The document gives examples of main sources of financing for the scale-up of co-operatives in industry and service, such as bank loans, trade credit, equity capital. CECOP’s members thinks the most important measures for scaling up are financial support for the acquisition of capacity building services from both public and private providers. Another measure they would welcome is supporting solutions to reduce production costs and increasing collaboration between large corporations and start ups to unleash scale up potential.

“Given that the co-operative is not set-up to be sold, co-operatives need a medium-long term support to be sustainable in the long run. Thus, developing tailor-made support measures remains the most important element for sustainable co-operative scale-ups,” concludes the position paper.

• You can Read CECOP’s position paper here.