Cooperatives are more resilient in times of financial crisis

Worker and social cooperatives have been more resilient in times of financial crisis compared to conventional enterprises, according to the annual report published by the International Organisation of...

Worker and social cooperatives have been more resilient in times of financial crisis compared to conventional enterprises, according to the annual report published by the International Organisation of Industrial, Artisanal and Service Producers’ Cooperatives (CICOPA).1 Based on CICOPA’s consultation of 24 of its member organizations from 19 countries2 – including 16 European Union countries –, the report takes stock of the situation in 2010. Better performance results Right off the top, the authors state that the European member organizations “report a general downturn in sales and production compared to the previous year (and) without any surprise, the secondary sector is the most affected one.” But the report goes on to note “a better situation in terms of economic performance, employment and enterprise survival rate for worker and social cooperatives compared to conventional enterprises.” While the healthiest signs of recovery were observed in countries with the strongest cooperative presence and experience (Italy, France and Spain), cooperatives in Central and Eastern Europe experienced situations similar to conventional enterprises. The percentage of worker and social cooperative closures in Europe is very slight, but they were “mainly concentrated in Central and Eastern European countries.” None of the cooperatives outside of Europe experienced any closures in 2010. In addition, none of them reported any decrease in employment during the same period. “All of them report stability and some of them even mention an increase in the employment rate (Brazil, Mexico and China), mainly in the services sector.” A significant percentage of CICOPA members reported the creation of new cooperatives in 2010, mostly in the form of “start-ups, active in the provision of social services, industry and construction.” “Cooperatives represented by CICOPA with their democratic management and governance, again show their tendency to produce a type and level of organisational innovation that significantly contributes to the economic sustainability of the enterprise,” according to the authors of the report. Measures for facing the crisis While some cooperatives were not very optimistic about 2011, others – especially those outside of Europe – had a more positive outlook. To limit the damage of the financial crisis, several CICOPA members were planning certain support instruments for their members, such as developing financial instruments, improving trade networks and access to international markets, training, and access to funds (in Europe). Improving management training and developing new skills were among some of the other ways of combating the crisis. The authors conclude that economic stimulus and business promotion policies “which tend to be stronger in the non-European countries (…) like Canada and South Korea and emerging ones like Brazil and China” report better results than those observed in Europe “where the present focus is on budget cuts and structural measures.” Source: Third annual report on the crisis – June 2011, CICOPA, 2011: http://cecop.coop/IMG/pdf/REPORT_ON_CRISIS_EN.pdf 1. CICOPA is a sectoral organisation of the International Co-operative Alliance (ICA). 2. 24 CICOPA members from 19 countries participated in the survey: Argentina, Bulgaria, Brazil, China, Czech Republic, Denmark, Estonia, Finland, France, Italy, Japan, Mexico, Paraguay, Poland, Romania, Slovakia, South Korea, Spain, Tanzania, Uganda, United States of America.

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