Tag Archives: Italy

Five points from Italy’s co-operative capital

Jaye Martin 03CDS specialist advisor Jaye Martin recently took part in a study trip to Emilia Romagna, the area of northern Italy with probably the richest co-operative history in the world.

Here, she reflects on the visit and looks at how Scotland can learn from the region.

The tour I was lucky enough to be part of was a collaboration between the University of Bologna and Saint Mary’s University (SMU) in Halifax, Canada. I joined a group of students undertaking a part-time Master’s Degree in Co-operative Management at SMU, all of whom are managers at co-operatives across Canada and the United States. Their organisations include food co-ops, insurance co-ops, credit unions and co-op development and their experiences provided me with valuable insight.

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One of the Towers of Bologna

Our chief executive, Sarah Deas, wrote a series of comprehensive blogs on her own experiences in Emilia Romagna a couple of years ago. With that in mind, I thought I’d simply touch on my highlights reel – although I can assure you that it was an intense eight days packed with visits to co-operatives and lectures on co-operative theory and economics!

So here’s my five most interesting points of learning:

1. Co-operatives are one of the most important tools in the reduction of inequality  Bologna – the capital of the Emilia Romagna region – has a lower unemployment  rate than other Italian cities. Emilia Romagna itself ranks first in Italy in terms of equality, evidenced by high average income and low income inequality.  Female participation in the workplace is significantly higher in Emilia Romagna (c65%) than in the rest of Italy (c45%). All of this can be linked back to the presence of co-operatives in the area.

IMG_01532. Social co-operatives… the future?

Legislation was introduced in Italy to create the legal and tax structure for the ‘social co-operative’ (what we might call a ‘social firm’).  At least 30% of employees must be categorised as disadvantaged (e.g. those affected by drug or alcohol addiction, physical or mental disabilities).  We visited some wonderful examples, such as Cooperativo Il Cammino e L’altro Giardino (‘The Alternative Garden’), a residence and gardens where herbs, fruit and vegetables are grown and used to make products such as jams and syrups.  Social co-operatives were oft-mentioned as the potential future growth area of the sector, but funding and support is increasingly hard to come by – so much will depend on the economic sustainability of projects and how they diversify and adapt to achieve this.

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Caseificio 4 Madonne

3. Caseificio 4 Madonne and the mix of the traditional and the innovative

My favourite visit – and not just because we got to taste all the lovely Parmigiano Reggiano cheese! Caseificio 4 Madonne is one of 350 Parmigiano Reggiano co-operatives in the region and together they form a huge consortium.  Caseificio 4 has 65-70 member farmers and produces 104 wheels of cheese each day.  We were shown the various stages of production and I was struck by the clever merging of traditional methods (e.g. use of muslin cloths and copper cauldrons) and innovative methods without the loss of the integrity and provenance of the product.  Perhaps something for Scottish food and drink companies to consider?

4. Co-operative funds – replicable here?

Co-operatives in Italy must pay 3% of their annual profits into one of three funds (each controlled by one of the three co-operative associations).  We visited Coopfond, the largest of the funds at 422m EUR and controlled by Legacoop.  The fund is used for the promotion of start-up co-operatives, growth capital for expansion and support for co-operatives in financial distress.  They will also help fund worker buyouts such as Greslab.  Given the issues around access to finance for employee-owned businesses and co-operatives in the UK, could a similar initiative be a potential game-changer?

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Our group outside University of Bologna

5. The importance of international connections

This study trip was important not just for the opportunity to see and hear about the strength of co-operative models in the region, but also to meet and discuss with fellow co-operators from Italy, Canada, USA and England.  Everyone in the group had a different interest or angle to their observations and questions and, for me, that was just as fascinating as the visits and lectures themselves. What is clear is that we should seek to build on these experiences, relationships and learning as far as possible as we continue to support company growth in Scotland using co-operative business models.

Celebrating 110 years of building a successful co-operative…

It was an honour and a privilege to be invited to Italy by CMC di Ravenna.The company had invited me to speak at a conference to celebrate its 110th Anniversary.  The event also marked the Italian launch of the United Nation’s International Year of Co-operatives (IYC) 2012.  It was a wonderful experience to visit Emilia Romagna, which is world renowned for the prominence of co-operative enterprises, at such a important time.

CMC di Ravenna is an international business – a worker co-operative operating in the construction industry. The company was established in 1901 by bricklayers and cement masons to give them competitive strength. It delivers large projects – including the Singapore underground, Milan subway and the United Nations conference centre in Addis Ababa. It employs 9,000 people and has a €715 million turnover.

The company operates as a co-operative controlled group. There are three forms of members; staff, retired staff and financing members. Voting rights and board differs within these groups. By involving retired members the company benefits from their knowledge and goodwill and financing members enable access to external investment. Governance structures are designed to maximise member engagement and influence, while enabling effective decision making which involves an Assembly, Board and a Council of Delegates.

The anniversary celebrations took place in CMC’s conference centre – which had been recently upgraded to include a concert hall venue for the local community (an excellent example of the company’s commitment to the community).  Massimo Mattencci, chair of CMC, opened the event, reflecting on the company’s success and strengths citing the company’s philosophies of ‘act locally, think globally’ and ‘our strength is human resources – not capital’.

The event had been widely promoted – including posters visible on the streets – a format we in the UK would more typically align with concerts!  

Professor Zygmunt Bauman (Professor  of Sociology at Leeds University) was billed as the main act . And I was surprised to see my name listed as one of the supporting acts!  I think that is what they call an ‘Andy Warhol moment’. The advertising clearly worked with at least a 400-strong audience in attendance and the paparazzi at every turn!  

Professor Noreen Hertz (from Judge Business School, University of Cambridge) author of ‘The Rise of Co-op Capitalism’ was also on the bill and attracted much interest. Co-operatives UK recently published a paper summarises her work which is interesting reading click here to read. Perhaps terming the conventional system ‘Gucci Capitalism’ was not the best idea in front of this audience!  But her main message was clear – given all the challenges of the conventional system, it’s time for us to change to a system that values relationships and is based on collaboration – what she terms ‘Co-operative Capitalism’.

Other speakers included Vera Negri Zamagni, academic and author of a number of books on the history of co-operatives – including one on CMC di Ravenna which was launched at the conference. Dame Pauline Green, President of the International Co-operative Alliance spoke of the significance of IYC 2012 and the ‘once in a lifetime opportunity’ that it offers. Arantza Laskuran, Secretary General, Mondragon Co-operative, provided an overview of its business strategy and R. N. Pandey, Managing Director of the National Labour Co-operatives Federation in India spoke of developments in his country. And, I provided an overview of Scotland’s innovative approach to co-operative development. A very eclectic, insightful and thought-proviking line-up if I do say so myself!

So what were the final lessons we can take from this for Scotland?   CMC di Ravenna and Mondragon are both good examples of co-operatives that have achieved scale. New organisational structures and forms of finance have been utilised to enable this growth.  A key message for Scotland is the importance of business model innovation in enabling growth and international competiveness.

This is my final blog on my most enjoyable and informative visit to Emilia Romagna. I’d like to convey a very special thanks to Massimo Mattencci and Valda Miani, CMC di Ravenna, for inviting me to be part of their celebrations and to Stefania Marcone and Sara Vicari, Legacoop, who kindly organised my study tour. 

All that remains for me to say is a very sincere ‘grazie’ to all!

Until next time…

And remember…think ‘co-operatively’!

Sarah Deas is the chief executive of Co-operative Development Scotland, a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise.

Spotlight on co-operative youth…

The UK faces constant challenges in terms of youth unemployment. I thought it would be interesting to share my experience of how our Italian friends have used the co-operative models to help address this issue. 

Over the years Italy has faced tight labour markets, with young people leaving the higher education system and finding it difficult to secure work.  Faced with unemployment, many of the forward thinking Italian youth have chosen to establish their own businesses – setting up a worker co-operative with other graduates.

I visited Atlantide – a tourism co-operative – established by environmental studies graduates who were struggling to find employment.  Their endeavours certainly paid off, establishing a business which has grown to 50 worker members, with temporary staff doubling that number during peak seasons.

Like many co-operatives, Atlantide collaborates with other businesses. I visited one venture that is operated by a consortium of four businesses; Atlantis plus two cultural co-operatives and an environmental services company. Together they have established a society co-operative providing educational services on ecological, environmental and cultural assets. 

The consortium has a contract to manage 14 country parks in Emilia Romagna and deliver environmental educational services to schools. My visit included a tour of one of these parks – which I will never forget as the park was home to the most amazing wild flamingos. And just to add a bit of trivia – did you know that the reason Flamingos are pink is because they eat red plankton? That is a fact!

I was also lucky enough to visit Ravenna’s Museum of Natural Science which the consortia manage on behalf of the municipality.

So it seems the young professionals of Italy can teach us Scots a few lessons. This example illustrates how young people can create their own successful business and by working together, they can pool knowledge and resources while sharing risks. 

Until next time…

And remember…think ‘co-operatively’!

Sarah Deas is the chief executive of Co-operative Development Scotland, a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise

 

Sociable Italia…

Before departing for Italy, I was determined to find out more about social co-operatives – a model pioneered in the country in the late 1970s. It has had impressive growth, especially in recent years, with numbers doubling since 2005 to 15,000 businesses. 

So, why are social co-operatives so popular?

The answer lies in the co-operative model being central to Italy’s social services system. It is legally recognised and given preferential treatment in public procurement. It places civil society at the forefront of service reform. Most are worker co-operatives, however the multi-stakeholder model – where workers, beneficiaries & volunteers share control – is also popular. 

Principles of reciprocity, equality and accountability are important in the delivery of humane care and the organisational attributes of co-operatives offer such advantages. Other drivers include dissatisfaction with service quality and a perception that user involvement will ultimately enhance delivery. Also there is an expectation that social co-operatives will deliver at a lower cost and with a commitment by the government to ‘subsidiarity’, services delivered and controlled by organisations closely relate to citizens.

There are two types of social co-operative:

‘A’ Co-ops – account for seventy per cent of social co-operatives. They serve the elderly, children, and disabled people through the provision of health, education and social services. They operate as commercial businesses but have privileged relationships with the municipalities.

‘B’ Co-ops – account for thirty per cent of social co-operatives. They are similar to UK’s ‘social firms’. Their aim is to integrate disadvantaged people – referred by municipalities’ social services departments – into work.  Over thirty per cent of employees must be deemed ‘disadvantaged’. These groups typically undertake cleaning, landscape gardening, parks maintenance, laundry and packing/assembly work.  Disadvantaged employees can be compensated at lower pay rates (recognising a lower productivity) and there is no national insurance paid on wages. 

Social co-operatives, like other co-operatives, have beneficial tax arrangements and access to finance on good terms. This is balanced against restrictions on distribution of profits. The law ties social co-operatives to only serve a given municipality – although wider coverage is often achieved through collaborating in consortia.

During my stay in Emilia Romagna I visited Cadiai – a ‘category A’ social co-operative. It was established in 1974 to provide services to the elderly, handicapped and children, now employing 1,246 staff, primarily working in Bologna. Services include residential care, nursing care, day nurseries and home care. 

I visited one of its nurseries which is operating under a 28 year contract with the Bologna municipality. It is owned by a consortium of two social co-operatives, a construction co-operative (that built the facility) and a catering co-operative (that provides the meals). This enables an interesting financing model as investment can be spread over a long contractual period (enabled by both the contract period and a construction company being part of the consortium).

I was fascinated to see the thought that had gone into the design of the nursery. It was clearly based on a scientific understanding of a child’s development.

It was more client centric than any nursery that I’d visited back at home. The ethos that underlies co-operative ownership was explained as the reason. 

 

Some serious lessons for us here in Scotland. The potential role of mutual models in delivery of public services is currently being explored. Italian social co-operatives demonstrate that such models lead to reduction in costs, improved quality and higher job satisfaction. They also illustrate that legislation – put in place to promote a specific approach – can have far reaching effect.

Until next time…

And remember…think ‘co-operatively’!

Sarah Deas is the chief executive of Co-operative Development Scotland, a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise