Young people are using co-operative business models to start their own business and generate employment, argues a new report by CICOPA, the international organisation of industrial and service co-operatives.
The Global Study on Youth Co-operative Entrepreneurship is based on theoretical research and an online survey involving 64 youth co-operatives across the world.
The respondents came from worker co-operatives (56%), social co-operatives (36%), and producer co-operatives (5%).
According to the ILO, young people are currently three times more likely than adults to be jobless. Trends towards non-standard forms of work have determined an increase in independent workers, employment delivered or managed through on-line platforms – also known as the gig economy, and zero-hour contracts.
While these forms of work offer flexibility, the lack of regulation means they are characterised by lower wages, limited to no access to social protection schemes, and fewer opportunities for training.
The research highlights how co-ops are making a difference. In France, the national confederation of worker co-operatives, CG Scop, reported that in 2015, young managers under 35 represented 15.5% of all managers within worker and social co-operatives, compared to 11.3% in conventional enterprises. Similarly, in Spain, COCETA, the Spanish confederation of worker co-operatives revealed that in some provinces 80% of members in newly established worker co-operatives are under 35.
Youth co-ops taking part in the survey are primarily micro and small enterprises active in the service sector.
These co-ops reported a positive economic performance in production and sales and increasing or stable trends in the number of jobs created in recent years. The survey suggests they also tend to involve women in management roles.
The respondents’ answers also showed that jobs in their co-operatives were stable and likely to increase. Furthermore, when asked about future expectations in terms of job creation, 90% of respondents expressed positive expectations for the next five years.
A large number of the co-ops (42%) taking part in the survey had been operating for more than five years, which could indicate stability. The majority of respondents also said they implemented innovative programmes or strategies to foster training among members and more than one third do the same for non-member employees.
Asked why they had chosen the co-op model, respondents said they wanted to have a social impact, work in a non-hierarchical environment, be autonomous, free and equal, and address the lack of jobs on the market.
But they said there were major obstacles in the way when establishing and running of co-op: a lack of financial resources and – for those in Europe – tax and bureaucracy. Another barrier i s the lack of government programmes supporting youth entrepreneurship – particularly among youth co-operatives from South America and Asia.
The study concludes that while co-operatives may provide a viable business model for young people, their performance is affected by regulation, the legal status of young workers, ability to access financial resources and red tape. The full study is available on CICOPA’s website.