It’s one of the characteristics of cooperatives that they are deeply rooted in their communities.
It's one of the characteristics of cooperatives that they are deeply rooted in their communities.
That gives them an inherent strength, but can also present challenges for scaling up, says Gianluca Salvatori, CEO of the European Research Institute on Co-operative and Social Enterprises (EURICSE).
In the wake of the economic crisis, Mr. Salvatori has observed an erosion of trust between people and institutions that he attributes to two decades of focus on "self-interest and competition in economic systems." This has led to social vulnerability, but has also stimulated a search for new organizational models, Mr. Salvatori says. "For the first time in many years, there is a public debate about economic pluralism. In that debate, the co-operative model has a place."
There are two key elements of co-operatives that position them well in the search for new models: variety and resilience, says Mr. Salvatori. "The co-operative movement is very flexible in terms of sectors and size. It's very adaptive – co-operative enterprises are emerging in different places and countries as the answer to new needs." He adds that the co-operative model is based on the concept of long-term sustainability.
Living in Italy's Trentino region, which has a long history of co-operatives, Mr. Salvatori sees examples of sustainability right at his doorstep. Starting with the first retail co-operative in 1890 and the first co-operative bank in 1892, Trentino co-ops now make up 90 per cent of the agricultural sector, 70 per cent of the financial sector and 50 per cent of retail sector.
"They have a big impact on local development," he says. "And they are growing and spreading to new sectors. They moved into fields that were covered by the public sector until there was no more adequate public funding, for instance education, health and services, such as utilities."
But Mr. Salvatori believes these new opportunities come with challenges. "In the co-op movement, right now, there is a debate about size. Some say, we need to scale up to make co-ops bigger and more powerful in order to replace market-based organizations that have failed. Others say that the co-operatives' strength comes from the fact that they are communitybased and excessive growth can put those grassroots connections at risk," he explained.
It's Mr. Salvatori's personal opinion that scaling up may come at a price. "I am worried about adopting a number of aspects of the traditional model that has failed," he says. "In a situation where we have problems with social cohesion and trust, we should insist on taking a community-building approach."
Instead, Mr. Salvatori suggests creating networks of smaller organizations that maintain their local approach and democratic governance. Exciting new initiatives are coming out of such collaborations, he says, and they address a multitude of local challenges, including renewable energy solutions, social services and job creation.
Research is an important tool for understanding how co-ops fit into economic systems, says Mr. Salvatori. He looks forward to participating in the International Summit of Cooperatives where he sees opportunities for networking within as well as across sectors. The co-operative model, he believes, provides creative solutions for today's most pressing needs.
