SME cooperative use intercooperation tools to remain strong and transform society
15 October 2016
Small and medium-sized enterprises (SMEs) are overwhelmingly represented in cooperatives active in industry, services and energy: in fact, 95% of enterprises represented by CICOPA are SMEs. What do they do to remain strong? As part of the International Summit of Cooperatives in Quebec, CICOPA, together with NRECA, the National Rural Electric Cooperative Association in the United States, co-organised the sectoral meeting “Cooperatives in industry, services and energy: how to address the SME dimension, now and tomorrow?”. Panelist analysed how cooperatives compensate their SME size, mainly, through entrepreneurial cooperation among themselves, all guided by cooperative principles with the aim of transforming society.
SMEs cooperatives are stronger by reinforcing their competitiveness, cohesiveness, financial sustainability, business and technology strategies, R&D capabilities, internationalization, clustering, economies of scale and scope… They have developed different internal cooperative tools to cope with their size: using advisory services, training schemes, mutualized financial instruments, business networks, and horizontal groups. Their resilience to crises and their capacity to innovate are to a large extent attributable to this cooperative way of working.
“These measures constitute the major source of SME cooperatives’ development because they come “from the inside” and are designed to meet their specific developmental and competitiveness needs. In countries characterised by a lack of public policies supporting cooperatives, they represent a main engine for their development. And when they are supported by adequate public policies, their effectiveness and positive impact are multiplied”, Manuel Mariscal, President of CICOPA.
The cooperative movement has a long experience supporting the development of its enterprises, in particular by delivering business advisory services by cooperative associations at a national and regional level. The example of the General Confederation of Worker Cooperatives (CG Scop), the national voice of worker cooperatives (called “SCOP” in France) – and Collective interest cooperative societies (SCIC), was shared with the audience. CG Scop network of regional unions located throughout the French territory and three sub-sectoral associations in construction, communication and industry offer services like local support and counselling, cooperative audit, training of employees and managers, financial instruments: loans and legal assistance among others.
Aldo Soldi presented the experience of Coopfond, an association established to manage a solidarity fund built up by cooperatives affiliated to Legacoop (one of three cooperative associations in Italy). It supports the creation of new cooperative enterprises, as well as the development or consolidation of existing ones. It represents a virtuous circle, capable of developing the cooperative form with resources generated within the cooperative movement itself. During the 20 years it has operated it has helped create or save thousands of jobs.
Red Grafica Cooperativa is a second degree worker cooperative established in 2006 which brings together 30 printing cooperatives in Argentina and promotes competitiveness and economic and social sustainability among its SME member cooperatives. To this end, it encourages the integration of production, the implementation of business management tools, training, innovation, creativity, as well as upholding principles of solidarity, democracy and responsibility. Moreover, Red Grafica also provides business transfer assistance to employees in the graphics sector. Today, the network counts, among its members 11 worker cooperatives that are the result of worker buyouts. José Orbaiceta, Co-founder of Red Grafica, shared with the audience how cooperatives in different sectors are inter-cooperating in response to the cost of a basic basket of goods in Argentina. Worker cooperatives have joined up with other organisations to create collective consumption hubs in several different places. The initiatives, all founded upon principles of food sovereignty, involve a variety of agencies, not just worker cooperatives: trade unions and associations, consumer cooperatives, social organisations, and inter-sectoral committees are all taking part.
Cooperative groups
According to the most current information available, we estimate a total number of 706 cooperative groups across the world within the CICOPA network, are using entrepreneurial inter-cooperative tools to compensate for their SME size. ENERCOOP, a multi-stakeholder cooperative (Société coopérative d’intérêt collectif – SCIC – in French), is the largest cooperative group providing 100% renewable energy in France. It provides a democratic and decentralised alternative to large operators in the energy sector, and promotes a transition to sustainable energy. ENERCOOP has developed into a network of 10 regional cooperatives providing electricity to the entire French territory, encouraging smaller networks and connecting 110 small energy producers and 35,000 users.
Arantza Laskurain, Secretary General of MONDRAGON Corporation in the Basque Country (Spain) explained how the group has been conducive to 110 SME cooperatives’ development thanks to a sophisticated set of tools such as the pooling of results, common management of unemployment, common financial and social funds, R&D, services, training and education, etc. Its innovation capacity is mainly channelled through its 15 technology centres, which are involved in numerous national and international projects, as well as research and technological development. Arantza Laskurain, Secretary General of MONDRAGON Corporation emphasised how involved cooperatives are in local development: “where there is strong cooperative development, distribution of wealth is more equitable”.
“We are not just interested in bread, but in producing a sustainable economy, and mainly hope”, concluded Tim Huet, Legal Counsel of the Arizmendi Group in San Francisco (EEUU), a cooperative made up of six cooperative bakeries and a development centre. Members share a common mission, ongoing accounting, legal, educational and other support services, and support the development of new member cooperatives by Arizmendi.
More about the participation of CICOPA in the International Summit of Cooperatives here.