Fuelling Europe's future economic success through cooperatives

#CriticalThinking

Picture of Ed Mayo
Ed Mayo

Vice-President of Cooperatives Europe, the European cross-sectoral organisation representing cooperative enterprises

Cooperatives have helped shape the European economy of today. It was European cooperative enterprises that were the first to introduce an eight-hour day in factories, the first to champion a minimum wage and the first to provide national health and welfare services with the idea of having businesses back them. But the vision of wealth creation through economic cooperation is a compelling one for the European economy of tomorrow.

The 2017 European Commission White Paper on the Future of Europe starts by saying that Europe was once the future. It points to the inspiration of the Manifesto di Ventotene, co-written by Altiero Spinelli and Ernesto Rossi while they were held prisoner by fascist authorities during the Second World War. In fact, Rossi was the founder and member of a cooperative, and its exchanges were core to his ideas. The manifesto calls for a free and united Europe as the Commission’s White Paper points out. But it also goes far further by suggesting that Europe should be organised along cooperative lines, with “industrial reform which will extend workers’ ownership in non-nationalised sectors, through cooperative adventures, employee profit-sharing, and so on.” This Europe is still the future.

The challenges of sustainable development call for a renewal of inclusive models of economic action

The vision of a participative economy ‒ in which all businesses give a voice to those involved ‒ chimes closely with current innovation trends. Driven in part by new communication technologies, ideas for business innovation now come from two primary sources: customers and colleagues. Harnessing these is increasingly about relationships and a culture of openness and trust, rather than traditional models in which research and development are driven and enclosed by financial capital.

The challenges of sustainable development call for a renewal of inclusive models of economic action, reaffirming while reinventing the traditional social pillar and reflecting two environmental imperatives: decoupling resources (using less land, water, energy and materials to maintain economic activity); and decoupling impact (using resources wisely over their lifetime to reduce environmental loss). As a recent report by the United Nations Secretary General states, “Cooperative enterprises are natural vehicles to deliver the collaborative partnerships and the people-centred and integrated approach required to attain the 17 Sustainable Development Goals.”

Cooperatives (or coops) are big business in Europe today: 176,000 enterprises are co-owned democratically by 141 million members, supporting the livelihoods of 4.7 million employees. As a voice for these, Cooperatives Europe brings together a rich and varied set of cooperative networks, including housing, industry and services, agriculture, banks, consumers, pharmacies, and renewable energy sectors.

And yet, cooperatives and the wider social economy of mutuals and associations are rarely recognised by European leaders. Europe has a policy agenda, locked into a worldview in which entrepreneurs are lone individuals and enterprises are driven by investors. Even the public sector and the social pillar are being reinterpreted within this limiting set of spectacles, with a lurch towards the market in the name of social entrepreneurs and social investment. Individuals and investors are an important part of the story, but they do not make the economy of the future alone.

Europe has a policy agenda, locked into a worldview in which entrepreneurs are lone individuals and enterprises are driven by investors

What is missing is the power of cooperation. Teams ‒ and not just individuals ‒ can be entrepreneurial; small businesses can work together to win economies of scale and scope; ownership can be distributed more widely with a stake for those involved in the business driving productivity; and technology platforms in the sharing economy can be based on shared ownership – the platform cooperative. What models such as this foster are norms of collaboration and inclusion. As research by the SMART-LERECO programme focusing on economic research shows, it is those countries in Europe that have higher levels of cooperative values in their society that have seen higher levels of recent economic performance.

What is needed then to harness the potential of cooperative enterprise for the future of Europe? Our call to action is for an ambitious and integrated policy agenda led by European institutions. The agenda should range from housing, work, retail, food and farming, through to energy, social inclusion and the collaborative economy. This would be a programme that accelerates the use of shared ownership, for example through transfers to workers at the point of business succession. It would bring together the partnership needed to cut the use of resources, carbon and plastics, while making a success out of the circular economy.

As we had the opportunity to discuss recently with the EU Commission Vice-President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen, at the suggestion of the European Commission’s President Jean-Claude Juncker, a cooperative agenda could promote a European response to tech giants through co-owned platforms in a genuinely collaborative economy.

This agenda requires a Europe that is closer ‒ not necessarily in terms of political integration but in terms of participation, economic collaboration and democratic engagement. With the right sense of purpose and urgency, a successful future economy will emerge in Europe, powered by cooperation.

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