Co-operative apex bodies respond to new EU industrial strategy package

Cecop and Cooperatives Europe welcomed the strategy but suggested further actions to support co-ops and SMEs

On 10 March the European Commission published its new Industrial Strategy package, which aims to provide a clear direction for “a globally competitive, climate-neutral and digitalised industry.

The new Industrial Strategy was published alongside a strategy for small and medium-sized enterprises (SMEs) and an action plan on strengthening the bloc’s single market.

Cooperatives Europe said it takes a favourable view of the enabling environment envisioned in the package, but stressed the point that many co-operatives are already investing in the green transition. 

The apex body, whose members are predominately SMEs, commended the initiative on the new SME strategy and said it was important to fully integrate the principle of the plurality of business forms, “from co-operative enterprises, to all social economy enterprises and traditional businesses, as they are contributing to the European economic development”.

Cooperatives Europe also welcomed the action plan for the social economy but criticised the omission of measures to promote co-operative entrepreneurship.  

Cooperatives Europe’s director Agnès Mathis said: “We welcome the European Commission’s initiative, which will support co-operatives, as well as every other type of SME, to expand and thrive in this transition towards a greener and a more digital Europe. As an active member of the SME Envoy, Cooperatives Europe will closely monitor the development of the Commission’ initiatives and bring the co-operatives’ voice to the table.”

The European confederation of industrial and service co-operatives (Cecop) has also responded to the package. Cecop said worker co-ops are able to constantly adjust to new challenges while being an efficient tool to maintain traditional industrial activities and skills in Europe, at the local level.

President Giuseppe Guerini said: “We need European policies to be close to the needs of enterprises on the ground. Co-operatives in industry and services produce value for society rather than extracting it. In times when the EU is confronted with important challenges such as economic inequalities, cooperatives in industry and services provide quality jobs and redistribute wealth equally. They address many societal needs as well as needs of the communities where they operate.”

Mr Guerini added that co-operative start-ups proved the model was a suitable and attractive model for digital activities.

“While emerging industry deserves specific focus, we also need the European Commission and the member states to reinforce efforts to protect the European traditional industry, which is often subject to closure and relocation, despite its profitability”, he added.

Cecop also warned that, in order for the green and digital transition to be achieved, a comprehensive up-skilling and re-skilling of the European workforce is needed. Here, too, the trade body sees a role for co-operatives in industry and services, which, it says, can play an important role in the development of skills since in-work education and training.

The industrial strategy package mentions that “new forms of work must come with modern and improved forms of protections, including for those working on online platforms”. Cecop is in favour of improving the working conditions for platform workers and points out that platform co-operatives are great partners for EU and member states because they provide more work quality, income security, and access to social rights and protection for non-standard workers.

The SME strategy focuses on three key areas:  a digital and green transition, reducing burdensome administration for SMEs and providing access to finance.

According to Cecop, SMEs account for over 95% of co-operatives in industry and services. It believes that while some support measures for the creation phase of an SME exist and are undeniably important, more needs to be done in terms of upscaling and job retention. 

It added that the promotion and support of the co-operative model can lead to sustainable outcomes for regional and local development. “If the strength of our economy is our diversity,” said Mr Guerini, “the Commission should explicitly recognise co-operatives as its component. Mentioning us indirectly through our larger family, the social economy, as sustainability and the circular economy drivers, is certainly important but misses to recognise our contribution in all the other sectors of the economy.”   

The SME strategy pledges to support member states on preventive restructuring and second chance, in order to avoid bankruptcy. Cecop agreed on the need for a supportive environment for the transfer of SMEs, but argued that this should include transfers to employees.

“In Italy for instance, dozens of worker buyouts are possible every year thanks to a balanced mix of regulation and financial support. The experience of the Marcora law should be replicated across Europe,” added Mr Guerini.

Environmentally sustainable development is another important pillar of the SME strategy. The commission points out that only 17% of SMEs have successfully integrated digital technologies into their businesses, compared to 54% of large companies.

Cecop warns that SMEs in general and co-operatives in industry and services struggle to finalise the transformation due to a general lack of investments in this direction. Furthermore, added Cecop, the green transition will entail radical production transformation, which will lead to job loses and require adequate support.

The Commission intends to establish 240 Digital Innovation Hubs (DIH) across Europe as well as a high-level SME Envoy to lead the SME Envoy network to make sure the SMEs are mainstreamed in policymaking. Coherence in this area with EU structural funds and other programmes such as InvestEU should be pursued, said Cecop.

The SME strategy also recongises that start-ups find it hard to compete for public tenders and suggests dividing larger contracts into smaller lots. To allow greater SMEs participation in public procurements, Cecop also wants guidance and support measures from the Commission to contracting authorities.

In light of the Covid-19 pandemic, Cecop warned that it will be necessary to set up a “reconstruction” plan for production and industrial service activities in Europe.

Mr Guerini said: “The epidemic has shown how important it is to support a development model, which counts on solidarity and social responsibility as factors of such development. The specificity of cooperative enterprises, which include solidarity among members and social responsibility as a production factor is an example of how industrial development and sustainability can be combined.”

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