SME co-operatives use inter-co-operation tools to remain strong and transform society

With small and medium-sized enterprises (SMEs) making up an overwhelming part of the co-operative movement, a session was held at the International Summit of Co-operatives to see how they...

With small and medium-sized enterprises (SMEs) making up an overwhelming part of the co-operative movement, a session was held at the International Summit of Co-operatives to see how they could remain strong.

It’s an urgent issue for co-operation in industry, services and energy: 95% of enterprises represented by the International Organisation of Industrial and Service Cooperatives (CICOPA) are SMEs.

CICOPA joined NRECA, the National Rural Electric Cooperative Association in the United States, to organise the sectoral meeting “Cooperatives in industry, services and energy: how to address the SME dimension, now and tomorrow?”.

Panelists analysed how SME co-ops compensate for their size through entrepreneurial co-operation among themselves – all guided by co-operative principles with the aim of transforming society.

They stay strong by reinforcing their competitiveness, cohesiveness, financial sustainability, business and technology strategies, R&D capabilities, internationalisation, clustering, economies of scale and scope, the panel found.

And they have developed different internal co-operative tools to cope with their size: using advisory services, training schemes, mutualised financial instruments, business networks, and horizontal groups. Their resilience to crises and capacity to innovate are to a large extent attributable to this co-operative way of working.

“These measures constitute the major source of SME co-operatives’ development because they come from the inside and are designed to meet their specific developmental and competitiveness needs,” said Manuel Mariscal, president of CICOPA.

“In countries characterised by a lack of public policies supporting co-operatives, they represent a main engine for their development. And when they are supported by adequate public policies, their effectiveness and positive impact are multiplied.”

The co-operative movement has a long experience of supporting the development of its enterprises, in particular by delivering business advisory services by co-operative associations at a national and regional level.

One example given was the General Confederation of Worker Cooperatives (CG Scop), the national voice of worker co-operatives (called “SCOP” in France) – and collective interest co-operative societies (SCIC).

CG Scop’s network of regional unions throughout the French territory, and its sub-sectoral associations in construction, communication and industry, offer services such as local support and counselling, co-operative audit, training of employees and managers and financial instruments.

Aldo Soldi presented the experience of Coopfond, an association which manages a solidarity fund built up by co-ops affiliated to Legacoop (one of three co-operative associations in Italy). It supports the creation of new co-ops and the development or consolidation of existing ones. It represents a virtuous circle, capable of developing the co-operative form with resources generated within the movement itself. During the 20 years it has operated, it has helped create or save thousands of jobs.

Red Grafica Cooperativa, a second-degree worker co-op established in 2006, brings together 30 printing co-operatives in Argentina and promotes competitiveness and economic and social sustainability.

It encourages the integration of production, the implementation of business management tools, training, innovation and creativity, as well as upholding principles of solidarity, democracy and responsibility. Moreover, it provides business transfer assistance to employees in the graphics sector. Today, its network includes 11 worker co-operatives that are the result of worker buyouts.

José Orbaiceta, co-founder of Red Grafica, told delegates how co-ops in different sectors are inter-co-operating in response to the cost of a basic basket of goods in Argentina. Worker co-ops have joined up with other organisations to create collective consumption hubs in several different places.

The initiatives, all founded upon principles of food sovereignty, involve a variety of agencies, not just worker co-operatives: trade unions and associations, consumer cooperatives, social organisations, and inter-sectoral committees are all taking part. More info here.

Co-operative groups

According to the most current information available, we estimate a total number of 706 cooperative groups across the world within the CICOPA network are using entrepreneurial inter-co-operative tools to compensate for their SME size.

ENERCOOP, a multi-stakeholder cooperative (Société coopérative d’intérêt collectif – SCIC – in French), is the largest co-operative group providing 100% renewable energy in France. It provides a democratic and decentralised alternative to large operators in the energy sector, and promotes a transition to sustainable energy. ENERCOOP has developed into a network of 10 regional co-operatives providing electricity to the entire French territory, encouraging smaller networks and connecting 110 small energy producers and 35,000 users.

Arantza Laskurain, secretary general of Mondragon Corporation in the Basque Country (Spain) explained how the group has been conducive to 110 SME co-ops’ development thanks to a sophisticated set of tools such as the pooling of results, common management of unemployment, common financial and social funds, R&D, services, training and education.

Its innovation capacity is mainly channelled through its 15 technology centres, which are involved in numerous national and international projects, as well as research and technological development.

Arantza Laskurain, secretary general of Mondragon, emphasised how involved co-ops are in local development.

“Where there is strong cooperative development,” he said, “distribution of wealth is more equitable.”

“We are not just interested in bread, but in producing a sustainable economy, and mainly hope,” concluded Tim Huet, legal counsel of the Arizmendi Group in San Francisco (EEUU), a co-op made up of six co-op bakeries and a development centre.

Members share a common mission, ongoing accounting, legal, educational and other support services, and support the development of new member co-operatives by Arizmendi.

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