Small and medium enterprises set up as co-ops are achieving scale by working together

With the majority of co-operatives active in the industry, services and energy sector being small and medium enterprises (SMEs), collaborating with other enterprises within the sector is crucial...

With the majority of co-operatives active in the industry, services and energy sector being small and medium enterprises (SMEs), collaborating with other enterprises within the sector is crucial for their success.

In a separate meeting at the International Summit of Cooperatives last month in Quebec, panellists looked at how co-operatives can compensate their SME size. The session, themed “Cooperatives in industry, services and energy: how to address the SME dimension, now and tomorrow?”, examined how co-ops collaborate among themselves to reinforce their competitiveness, financial sustainability, business and technology strategies, research and development capabilities, economies of scale and scope.

Panellists mentioned a number of measures, including using advisory services, training schemes, mutual financial instruments, business networks and horizontal groups.

“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. In countries characterised by a lack of public policies supporting cooperatives, they represent a main engine for their development. And when they are supported by adequate public policies, their effectiveness and positive impact are multiplied”, said Manuel Mariscal, president of CICOPA (the International Organisation of Industrial and Service Cooperatives).

Aldo Soldi, general director of Coopfond, explained how his association was set up to manage a solidarity fund built up by co-operatives affiliated to Legacoop, one of the three co-operative federations in Italy. The fund is designed to support the creation of new co-operative enterprises and the development or consolidation of existing ones.

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

Similarly in Argentina Red Grafica Cooperativa, a second-degree worker co-operative helps integrate production, implementation of business management tools, training and innovation among its 18 printing co-operatives members. José Orbaiceta, co-founder of Red Grafica, explained how worker co-ops in Argentina were launching various joint projects o create collective consumption hubs, in collaboration with trade unions, social organisations and other associations. CICOPA estimates that around 706 co-operative groups across its network are using inter-co-operative tools to compensate for their SME size.

In Spain Mondragon Corporation has helped 110 SME co-operatives develop by pooling results, common management of unemployment, common financial and social funds, research and development and training and education. Arantza Laskurain, Secretary General of MONDRAGON Corporation’s Cooperative Centre, said: “Where there is strong co-operative development, distribution of wealth is more equitable”.

Based on Mondragon’s model, a group of people set up six co-operative bakeries in San Francisco. Called Arizmendi Group, the secondary co-op runs a development centre. Their co-op members share a common mission, on-going accounting, legal, educational and other support services, and support the development of new member co-operatives by Arizmendi. “We are not just interested in bread, but in producing a sustainable economy, and mainly hope”, said Tim Huet, legal counsel of the Arizmendi Group.

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