NEW CAMPAIGN TO SHOWCASE THE ROLE INCLUSIVE BUSINESS MODELS CAN PLAY IN THE RECOVERY OF THE ECONOMY LAUNCHED

CDS Inclusive Model Businesses

We’ve launched a new campaign to showcase the role inclusive business models can play in supporting the Scottish Government with its aim to create a fairer, stronger and more democratic economy, particularly following the COVID-19 pandemic.

To launch the campaign we commissioned a new survey which revealed that half of Scots (48%) agree the pandemic has provided an opportunity to make Scotland’s economy stronger and fairer, with under 35 year olds more even more likely to agree (59%).  64% also said that the pandemic has already made their business more socially responsible.

When asked what should be the top priority for businesses going forward, three out of four people said protecting jobs (74%), followed by staff wellbeing (67%) and creating innovative solutions to problems (53%).

We caught up with Head of Co-operative Development Scotland, Clare Alexander, to find out more.

While discussions on the social aspects of the economy have become more vocal in recent years, COVID-19 has undoubtedly fuelled its relevance and urgency. The world has been shaken, many of our norms have been questioned and as our survey shows, there is a desire not to return to life as before. Business leaders have prioritised wellbeing, communities have responded to help and support each other and new and innovative ways of being economically viable have come to the fore. There has also been a focus on a collective, rather than individual, call to action. Employee ownership, community ownership and consortium co-operatives are effective examples of plural ownership that can help us drive that necessary change across our business communities and support is available to make it happen.”

This approach to business is at the heart of the Scottish Government’s Programme for Government, which recognises the critical benefits of Community Wealth Building – a people-centred approach to local economic development which redirects wealth back into the local economy and places control and benefits into the hands of local people. The models promoted by CDS are effective examples of plural ownership, one of the five pillars of Community Wealth Building deemed integral to effect the necessary change for local communities and national wellbeing.

“An employee-owned business is one in which the employees hold the majority of the shares, either directly or through an employee ownership trust.  Selling to employees allows owners to manage their exit and achieve fair value while safeguarding the long-term future of the company. Employee ownership gives employees a meaningful stake in their organisation together with a genuine say in how it is run.

“Evidence shows employee-owned businesses consistently outperform in terms of improved business resilience during times of economic crisis. They tend to be more productive with higher levels of staff engagement and wellbeing, particularly relevant during a time in which people are spending more time working from home.”

The employee owners at Highland Home Carers, the Highland’s leading home care provider and Scotland’s largest employee-owned business, used its employee-owned status to support the staff financially through the crisis via pay increases, a profit share pay-out, an enhanced sick pay programme and a share buy-back scheme.  It also introduced an Employee Assistance Programme in which staff can access a range of support services including the use of physical and mental health professionals.

Our survey also revealed two out of three (66%) Scots are pessimistic about the future of the economy following the COVID-19 pandemic. In addition over one in three said job security was a concern, followed by over one in four saying closures of local amenities such as shops and pubs was a worry.

“Setting up a community co-operative can be an effective way for people to safeguard public services, for instance coming together to take over a local shop or pub and prevent it from closing, something which could be relevant in the current climate. Community businesses can have a significant positive impact on areas whether they provide a local service, deliver economic growth, or contribute towards the health and wellbeing of the local community – often all three. They are important to the economy because they can retain jobs, bring economic opportunity and retain vital services and amenities.

“The economic and social potential of community business is significant, and could be more widely adopted in Scotland. Combined with the greater community spirit that has been cultivated during COVID-19, now is the perfect time to champion community business models and the wider economic, social and environmental benefits they can deliver.”

Community co-operative The Crunchy Carrot, a community-run shop in Dunbar, East Lothian, went from supplying 60 vegetable boxes per week before the pandemic to 350 during the early stages of lockdown, responding to the community in its time of need. Strong and well-established local supply chains with mills and farms, something local chain shops didn’t have, meant all orders were fulfilled and deliveries to vulnerable customers were guaranteed.  Whilst demand has eased as people return to normal shopping patterns, the Crunchy Carrot has still significantly grown its customer base on the back of the reliable and reassuring service it was able to provide during difficult times.

“With 33% of Scots stating that working collaboratively with other businesses should be a priority, we’re advising business owners to consider the advantages of formally joining together via the consortium co-operative model.  These are established when businesses come together for a shared purpose; to buy or sell in scale, market more effectively, share facilities or jointly bid for contracts. 

“We know collaboration has been a vital part of the response to the pandemic, so formalising a consortium co-operative could be an effective, low risk way for businesses to improve market presence and achieve new goals whilst retaining their independence.”

The Glasgow Canal Co-operative, which aims to ‘unlock the potential of the canal to create a vibrant neighbourhood for people to live, work and visit’, is a consortium co-operative made up of 25 member organisations. Whilst it has been a difficult time for many of its members, they have pooled resources, shared risks and have worked together during the pandemic to develop projects for the wider consortium which also support the members’ own activities. Having a platform for members to share experiences and to help each other has been very important and has enabled them to respond to the effects of the pandemic more strategically.

“Whilst businesses with plural ownership have experienced many of the same challenges around job retention, cash flow and uncertainty as others during the pandemic, they are often more resilient, putting them in a strong position to either weather the economic storm or to recover well afterwards.  During the initial response to the pandemic many of these businesses were able to unite behind a common goal, helping their ability to adapt and innovate during the crisis.

We are enormously passionate about these business models and their contribution to both the communities and sectors in which they operate as well as the wider Scottish economy.  The economy needs to have the best possible chance of recovery, with businesses that can be resilient, adapt and offer a fairer more inclusive economy.  We know there is a significant role for inclusive business models to play in helping to build back better and would urge any business owners reviewing their options to consider adoption of these models.”

Jamie Hepburn MSP, Minister for Business, Fair Work and Skills, is supporting our campaign. He added: “COVID-19 has had a massive impact on the global economy and Scotland, like all countries, has been deeply affected. This forces us not just to respond in the immediate term, but also to make choices about the sort of economy we want to have and to focus our efforts on building back fairer and stronger.

We are committed to ensuring everyone can access work that is fair and offers flexibility and opportunity for all, and recognise the benefits of community wealth building – economic development that ensures local people and businesses have a genuine stake in producing, owning and enjoying the wealth they create.

“As this survey shows, the pandemic has increased the importance businesses place on social responsibility. To help protect jobs and improve staff wellbeing, it is important that we build on that and keep these initiatives going.”

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