Exploring the potential of co-operative models in the social enterprise sector

Sarah Deas, Chief Executive of Co-operative Development Scotland, on lessons learned from the Social Enterprise World Forum

In September, 1,400 delegates from the social enterprise community arrived in Edinburgh for the Social Enterprise World Forum – an international event aimed at bringing social enterprises from across the globe together to share insights, build networks and discuss the aspirations and challenges for the sector’s future.

Scotland is recognised globally as a nation that nurtures social enterprise, helped by its benign policy environment. John Swinney, Scotland’s Deputy First Minister, opened the conference by outlining how the Scottish Government had first invested in the sector 11 years ago having recognised it as “a full and proper articulation of the moral purpose we need in our society”.

Today, Scotland is home to around 5,600 social enterprises that employ more than 80,000 full-time equivalent employees and contribute approximately £2 billion GVA to Scotland’s economy every year (source: Social Value Lab’s Social Enterprise Census 2017).

As a sponsor of this global forum we, Scottish Enterprise and our arm Co-operative Development Scotland (CDS), saw the opportunity to promote the co-operative business model to a highly-engaged audience looking for new ways to innovate. The environment of the forum itself, encouraging networking and facilitating the sharing of knowledge and experience among hundreds, was a natural fit for extolling the benefits of collaboration.

Co-operative models in the social enterprise sector

We secured a slot within the forum programme to deliver a workshop on the potential of co-operative models in the social enterprise sector. Envisioned as a participatory session to allow for questions and discussion, places filled up rapidly and well in advance, a clear indication of the appetite to learn more about co-operative models. Indeed, it was hugely encouraging to see the topic given such prominence and attract so much attention at a global event.

To front the session, I was joined by three other speakers from a co-operative background: Samuel Barco, co-founder and CEO of the international consulting co-operative SOKIO; Mike Townsend, executive director of the DIRECTIONS Council, a province-wide network of 30 agencies in Nova Scotia providing employment and inclusion support for people with a disability; and Ross Young, president of the DIRECTIONS Council and vice president of Ability Wood Products Co-operative Limited, another collective supporting people with a disability by providing employment opportunities.

After an introduction to the key co-operative models and an overview of the attention given to them in our respective nations, we moved on to the main purpose of the session: to explore the opportunity for the social economy to use co-operative structures.

Through the first-hand experiences of my fellow speakers and the success stories of social enterprise co-operatives here in Scotland, the significant potential for greater collaboration in the sector was clearly demonstrated. From securing larger contracts to accessing new markets, the potential benefits of joining forces were met with great interest and curiosity from the audience: the majority of questions were of “how?” rather than “why?”.

The main barrier to consortium working? The lack of resources

The main issue which was repeatedly cited as a barrier to consortium working was the lack of resources – finding the time to attend additional meetings with fellow members was acknowledged as a challenge by Ross Young, not to mention the time taken to co-ordinate the meetings in the first place! The appointment of a dedicated facilitator within the consortium was deemed essential to continue driving the co-op activity. The requirement for financial input from all members to support this role was also highlighted.

Another key insight which could potentially define the position of co-operatives within the social enterprise sector was the assertion that strong, compatible values and interests need to come first, followed by structure. The values will ultimately define the purpose and goals of the consortium, and once these are established, the best means of taking them forward can be considered. In a sector where company values are front and centre, there is ample opportunity to seek out potential collaborators on this basis.

Further elaborating on the practicalities of consortium working, Ross raised the point that co-operatives have been around for 150 years – there are a wealth of examples out there that we can learn from. That is certainly the case in Scotland, where we have a rich heritage in co-operatives, largely bolstered by a government that supports and promotes the models, and continues to look at ways to enhance their growth as the economy evolves. A good example is Glasgow’s Empowering Communities Co-operative, set up to enable local development companies to bid together for larger contracts than they could deliver on their own.

It was widely agreed that this environment would give social enterprises the necessary confidence and reassurance should they be considering adopting a co-operative structure. In countries where the models are not so prominently championed, social enterprises are understandably more hesitant to take the leap.

A Scottish example

It could be argued that this puts Scotland at the forefront of the take up of co-operative models by the social enterprise sector and in a position to influence a wider global trend. Certainly, the majority of delegates were very much in admiration of the supportive landscape we have in Scotland, from Scottish Government support at policy level to the hands-on advisory support available to social enterprise and co-operatives.

CDS is partner in two initiatives to promote take up of co-operative models in the social enterprise sector; Partnership for Procurement and Community Shares Scotland. The former provides support to social enterprises wishing to collaborate to bid for contracts. The latter supports the creation of new community owned businesses. Co-operative structures have an important role to play in both.

It’s now up to Scotland’s co-operative and social enterprise communities to make the most of this environment and seize the opportunity to drive progress in a fledgling movement where the aligning of two business models could not be a more suitable fit.

When social enterprises thrive, so too do the communities they serve: the impact of DIRECTIONS Council, comprising 30 member organisations, and the Ability Wood Products Co-operative, with a total of eight, are testament to this. The opportunity for social economy to use co-operative structures is considerable – we just need to continue working collaboratively across the communities to make it happen.

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