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The Italian Region Where Co-ops Produce a Third of Its GDP

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Picture a day like this: You wake up and head to your job at a small company you own and manage together with your fellow workers, doing high-tech, advanced manufacturing that’s too specialized for bigger factories. For lunch, you swing by a restaurant owned by another worker cooperative, this one a national-scale firm that serves millions of customers each year. Back at work, you’ve got a meeting with a local agricultural co-op that’s contracted your company to help design some more efficient processing material for the food they produce and export across the world. Afterward, you meet up with your partner, who works in a social cooperative jointly owned by caregivers and the elders who live and receive care there. The two of you swing by the local grocery store—part of a national chain owned by its millions of customers—and pick up a bottle of co-op-produced wine. This is a day in the life of the cooperative economy in Northern Italy’s Emilia Romagna region.

Emilia Romagna, a region with nearly 4.5 million people whose capital is the medieval university city of Bologna, has one of the densest cooperative economies in the world. About two out of every three inhabitants are co-op members, together producing around 30 percent of the region’s GDP.

Emilia Romagna’s co-op economy is a product of organizing going back to at least the 1850s …

Doing business through co-ops is one of the clearest ways to democratize our economic institutions. But as anyone who has developed or worked in a cooperative will tell you, co-ops aren’t magic. Building institutions that go against the grain of corporate capitalism while managing to survive in the markets it creates is not easy to pull off. There’s plenty of room to fail, and even more room to do better. While cooperatives in the United States claim about 130 million memberships, these are by and large within consumer- and producer-owned co-ops, not cooperative workplaces. Only around 7,000 people nationwide are part of worker co-ops.

That’s why it’s helpful to learn from countries where the cooperative economy is more developed and more densely integrated than in the United States—not because they’re utopian, post-capitalist wonderlands, but because they’ve got the hard-won experience that can teach other co-op creators how to scale up the community-owned economy effectively and creatively.

How did Northern Italy’s complex, intertwined, and resilient cooperative network develop and grow? That’s the question Vera Zamagni, professor of economic history at the University of Bologna, has been trying to answer throughout her career as one of Emilia Romagna’s foremost cooperative scholars.

In her work, Zamagni shows that Emilia Romagna’s co-op economy is a product of organizing going back to at least the 1850s, developing in conjunction with a rich, high-value-added agricultural tradition and surviving despite a brutal historical encounter with fascism.

When an Italian dairy cooperative can raise more than $6 million in financing by issuing bonds backed by aging wheels of Parmesan cheese—as one did earlier this year when the Parmesan market proved too uncertain for banks—it’s easy to feel like we’ve fallen through the looking glass. We can’t exactly replicate what the people of Emilia Romagna have created, but there’s plenty we can learn. Here are six key lessons for building a cooperative-rich economy.

1. Build ecosystems, not monoliths.

For many U.S. co-op advocates, the Basque Country’s Mondragon—which has tens of thousands of worker-owners and cooperative businesses linked into a single, giant cooperative corporation—is the go-to reference for convincing people that co-ops can scale. Not for Zamagni. “North America is fond of the Mondragon corporation because it resembles more closely the typical American corporation in size, but with different management principles,” she says. But it’s a unique case that has never been replicated elsewhere. 

In Emilia Romagna, the cooperative movement is more a networked ecosystem than a single, overarching corporation. This has key advantages. If you can’t build a giant firm because the sector you are working in requires flexibility and specialization, or if the people involved are simply uninterested in being part of a giant corporation, then, Zamagni says, the network form can give you all the advantages of scale without overcentralization. In Italy, the cooperative movement is not a single company, but a whole interwoven fabric of “horizontal, vertical, [and] complementary networks” that support each other financially. 

For those aspiring to build co-ops in the United States, the ecosystem pattern—in which different cooperative businesses and development efforts interact in a loose web of mutual support—is likely a much better place to start than trying to replicate the more monolithic approach of an initiative like Mondragon. A networked ecosystem—decentralized and resilient—can harness energy and interest at different levels and in different sectors to develop, grow, and thrive. 

2. Raise capital from customers.

If the amount of worker cooperatives in Emilia Romagna is impressive, the scale of consumer cooperatives in Italy’s retail sector is awe-inspiring. Coop is the largest retail chain in Italy, with its supermarkets and “hypermarkets” claiming close to 20 percent of market share, and the whole enterprise is owned by its 7.4 million consumer members across the country. How did it get so big? 

The answer is, as it turns out, crowdfunding. According to Zamagni, in the wake of a 1971 law that exempted co-ops from certain kinds of banking limitations, Coop was able to raise a lot of money in small amounts from many, many members. Coop became the Italian retail leader in part because it could tap its already sizable membership base for the loans it needed to expand. This kind of bottom-up lending covered more than half the funds Coop needed for a critical two-decade-long expansion effort in the ’80s and ’90s.

3. Tap the care work market.

Many people worry—with good reason—that cooperatives won’t be able to compete with traditional corporations without abandoning their social mission. But focusing on cooperatives as market-driven enterprises might be a mistake. In Italy, social co-ops are on the rise, not as a way to produce goods and services for sale, but as a way to more effectively delive

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