Tag: consortium (Page 2 of 3)

Council’s ringing endorsement of co-operatives

GillianKirton-002The eyes of the world have been on Glasgow over the last week and a half as the city plays host to the Commonwealth Games.

Here, Gillian Kirton, Project Manager at Co-operative Development Scotland, looks at how the host city’s council is providing real support to co-operative businesses.

With almost 20 per cent of Scotland’s co-operatives residing in Glasgow, the ‘sector’ is thriving – these co-operatives employ almost 1400 individuals and account for £192m turnover per annum. Impressive numbers indeed.

To further enhance this, Glasgow City Council is one of just 21 Councils in the UK to commit to becoming a Co-operative Council and is certainly taking its commitment very seriously.

There’s real practical support available to companies and the council are putting their money where their mouth is – to date they have awarded 13 co-operatives a total of £210k to implement ‘transformational business development activities’.

people make glasgow

A further tranche of funding is now available with sums of between £2,500 and £25,000 available for eligible activity. And at a Glasgow Business Embassy event last week, it was announced that a pot of £3m will be available to support companies looking at business ownership transfer.

I’m confident we will see more companies following in the footsteps of Glasgow-based Page\Park and opting to transfer ownership to employees.

Co-operative Glasgow sees partnership working as key to successfully delivering their action plan and it was a pleasure to meet so many of those partners.

In collaboration with the Council, we delivered a seminar to many Business Gateway and other front line advisors. It gave them the opportunity to hear more about co-operatives, the impact they can make to the local economy, the many benefits of the model, and the support available to their clients.

Glasgow City Council logo

It’s fair to say that there was a lot of enthusiasm and excitement about the models – they see them as a perfect solution to meet the needs and growth aspirations of many of their clients.

CDS is delighted to continue to work in partnership with the Council, Business Gateway and other advisors to provide free advice and guidance to those businesses considering employee ownership and co-operative business models.

Our annual Collaboration Prize has seen some amazing success stories in Glasgow – Music Co-OPERAtive Scotland and Screen Facilities Scotland are going from strength to strength.

This year we will launch our Collaboration Prize on 1st October – up to three collaborative ideas will each gain a substantial £10k prize to get their idea off the ground. Will we see further success stories in Glasgow?  Watch this space!

Enjoy the Commonwealth Games – another exciting reason to celebrate all that Glasgow has to offer!

Taste of success for food consortium

When you’re a small-scale producer keen increase your sales and exposure across the UK, how do you do it?

Nine food producers in Argyll considered this very issue in 2008, recognising that there was greater opportunity for them all if they worked together.

With the help of Co-operative Development Scotland, they came together to form Food from Argyll – a consortium aimed at taking their goods into a wider market.

Here, the producers describe the benefits they’ve enjoyed since forming the consortium.

Co-op Congress a real Saturday success

Jaye Martin 03Bees, thumbs up and visual minutes made for a different conference experience at this year’s Co-operative Congress.

Here, CDS specialist adviser Jaye Martin talks through some of the key points from the session.

The Town Hall in Birmingham, with its impressive architecture and historic organ dating from 1834, is not a bad place to spend a few hours. Even if it is on a Saturday (the middle Saturday of Wimbledon, a World Cup Round of 16 day)… and it’s sunny in Glasgow.

Being a consummate professional, I was able to set all this aside and concentrate on the subject at hand. Which was, of course, co-operation – or, more specifically, Co-operation: How?

This year’s Congress had been trailed as a pared down, back to basics approach to provide a space for open and honest discussion about the future of the co-operative movement. Two themes from the International Co-operative Alliance’s Blueprint for a Co-operative Decade were used as the focus of the debate:

  • How do we promote the co-operative message and secure our identity?
  • How do we take participation in co-operatives to the next level?

The pitches, debates and pledges stemming from these themes were used to help shape an action plan for the movement. Delegates were given voting cards with ‘thumbs up’ and ‘thumbs down’, to be used throughout the debate whenever the mood took us.

Visual minutes at the Co-op Congress

Visual minutes at the Co-op Congress

The take-aways were, for me, around the innovative tools employed to make this a different and truly more interactive conference, so I’m giving a thumbs up for:

  1. A good theme – the humble bee, long a symbol and unofficial ambassador for co-operation, was utilised to good effect in Ed Mayo’s opening speech, in the branding of the conference and even in the honeycomb-shaped pledges that attendees were encouraged to write on and stick up on a great honeycombed wall of hope.
  1. Steph McGovern – the BBC Breakfast business presenter was an inspired choice of Congress facilitator, with her down-to-earth humour endearing her to the assembled audience from the off. She has recently covered developments regarding The Co-operative Group and The Co-operative Bank for the BBC and her genuine interest in the sector was clear.
  1. Visual minutes – professional artists from Creative Connections recorded the debate and feel of the room through illustration, creating this wonderful piece of art which is a lasting legacy of Congress 2014.

That was the year that was – a look back at 2013-14

Sarah Deas resizedCo-operative Development Scotland had a stellar 2013/14, working with co-operatives and employee-owned businesses throughout the country.

Reviewing progress, chief executive Sarah Deas outlines how the results demonstrate the potential for growth in the coming years.

During 2013/14, Co-operative Development Scotland supported 36 new ventures and buyouts across the country, nurturing successful business collaboration and succession.

consortia infographic

We helped establish 19 new consortia covering key sectors, including tourism, creative industries, forestry and renewables. This will directly benefit more than 150 businesses in the first year – with that figure expected to increase to more than 350 over the next three years as the influence of the consortia grow.

We also helped eight new community ventures to get off the ground and are currently advising 91 Scottish companies that are interested in the employee ownership model as a succession option.

The figures, published in our 2013/14 annual review, demonstrate clearly that co-operative and employee ownership models are proving attractive options for businesses as the benefits become more widely known.

It is for that reason we are confident we will meet our target of a 10-fold increase in employee ownership over the coming decade, as well as helping to establish a further 350 new co-operatives in the same period.

the future

Others are keen to learn from our approach; last year we advised the Malawi Trade and Investment Centre on Scotland’s approach to co-operative development.  We also participated in a project led by the Flemish Government to promote co-operative entrepreneurship across European member states.

Looking forward, we will continue to work closely with Scottish Enterprise and Highlands and Islands Enterprise, as well as key partners including Business Gateway, industry bodies, membership organisations and professional practices, to raise awareness, provide advice and influence policy.

We are determined to build on the successes we have had over the past year – and the enthusiasm the model has been shown so far only whets our appetite to spread the message even further.

Shining a spotlight on finance

Jaye Martin 03At the most recent CDS Advisory Board meeting, some of Scotland’s key industry figures gathered to discuss how ‘stakeholder banks’ can be the ideal solution for co-operatives looking to raise capital.  

Jaye Martin, a Specialist Advisor at CDS, shares her experience of the day.

As January comes rapidly to an end and the weather shows no signs of improvement, like me, you are probably longing to get away from the soggy grey skies.

But at the recent CDS Advisory Board session, we refused to be cowed by the January blues and instead presenting an eclectic mix of speakers to throw some light (and shade) on the topic of Financing and Capitalising Co-operatives. 

James Graham 2323 - 008

James Graham of SAOS

Insights gained from the session will help inform our thinking over the coming year as we consider in sharper detail the financing issues affecting the businesses we work with particularly relating to employee buyouts and consortia of scale.  This is of course in the wider context of Scottish Enterprise’s ongoing work in the Access to Finance arena and the Scottish Government’s Sustainable, Responsible Banking strategy, published last year.

 Attendees from CDS, our Advisory Board, Scottish Enterprise and the Scottish Government heard from James Graham of SAOS on the challenges of capitalising a typical agricultural co-op and the potential need for a farming and rural financial intermediary to serve that community, and Angus Waugh and Gerry Sweeney from First Milk on the challenges of raising capital in a 1,700 member strong dairy co-operative. 

New Economics Foundation’s Tony Greenham gave an in-depth analysis of the UK’s banking system and the benefits of ‘stakeholder banks’ with Rod Ashley of Airdrie Savings Bank, the UK’s last remaining independent savings bank, highlighting the benefits of local banking.

Trying to summarise the rich learning and discussion from this jam-packed session is probably an injustice. However, as a taster let’s consider on the top five financing facts:

  • The UK, and particularly Scotland, lacks diversity in its banking system as compared to other developed nations.  In the UK, local banks comprise just 3% of the sector as compared to 67% in Germany and 34% in the USA. 

Fact 1 image

  • Co-operative (and employee-owned) business models by their very nature make capital-raising difficult due to the ownership structure.  In the USA, there are special provisions supported as a necessary counterbalance to other types of enterprise.
  • Collaboration is the name of the game in Germany. Local banks co-own central services (for example, back office, regulatory and marketing functions).  This collaboration (rather than the consolidation seen in the UK) allows them to remain locally focused, with sophisticated systems.

    Rod Ashley, chief executive of Airdrie Savings Bank.

    Rod Ashley, chief executive of Airdrie Savings Bank.

  • Airdrie Savings Bank was founded on 1 January 1835 and is the only institution now operating under the auspices of the Savings Bank (Scotland) Act 1819.  Customers have ready access to bank managers and staff with knowledge of the local area and local businesses.  The Bank faces an ever increasing scrutiny from the regulatory landscape. 
  • There are comparatively higher levels of lending to co-ops, social enterprises and charities as well as local SMEs by local banks.  For example, the German government-owned development bank KfW has specific funding available for family businesses to help the younger generation to buy out the older (retiring) generation. 

Although, like the January sun, this is just a brief account of the topics, the discussion will help us to put finance in the hot seat in 2014.

CDS is here to help businesses considering the adoption of co-operative business models.

The Wee Agency hopes collaboration will bring big results

Eilidh Marshall headshotLast year, for a second consecutive year, CDS ran the Collaboration Prize – an opportunity for three businesses from across Scotland to each win £10,000 worth of cash and support to get their consortium business idea off the ground.

Working with Creative Scotland, CDS crowned Highland-based The Wee Agency with the creative sector prize. Eilidh Marshall from Muckle Media talks through the benefits of being part of a Scottish consortium.

It’s an exciting time to be part of The Wee Agency. Having just launched, we are delighted to have won the Co-operative Development Scotland Collaboration Prize.

According to Co-operative Development Scotland, there are 578 registered co-operative businesses in Scotland, and no doubt many more businesses collaborating behind the scenes. These businesses play a major role in driving economic growth with a combined turnover of £4bn and providing employment to 28,600 people.

Collaboration can have significant benefits – increased productivity, creativity and greater influence are just some. Working with different people outside your own agency can spark new ideas and give insight into the other specialities. All the while, individual businesses can retain their own brands; collaboration simply allows them to be part of something with greater impact.

Collaborating and combining skills makes things a lot simpler for clients too. There’s no need to brief different agencies or companies, no more juggling projects, reading through multiple proposals or duplication of tasks or costs. Clients are reassured that everything is taken care of by one company.

Compare it to say, building a house. Imagine one project manager presenting you with the options on how to achieve your ideal home – you don’t need to find an architect, builder, decorator, bathroom fitter, electrician or spend your time coordinating how they work together. You choose the end result you want and the team does the rest. 

And that’s how we work.

In an increasingly digital world, it’s important that companies have accessible and interesting websites that are marketed effectively – therefore increasing their chances of being seen by consumers. At The Wee Agency, we bring this together with 2bcreative providing the design, Alchemy+  bringing the IT and Muckle Media providing PR and marketing.

David Massey, managing director of Alchemy+, Nathalie Agnew MCIPR, director of Muckle Media and John Young, director of 2bcreative, represent the three firms that have formed The Wee Agency.

David Massey, managing director of Alchemy+, Nathalie Agnew MCIPR, director of Muckle Media and John Young, director of 2bcreative, represent the three firms that have formed The Wee Agency.

So how do projects with The Wee Agency work? 

  • After being briefed by the client on their needs and wants, we brainstorm to find the best creative idea that will sit at the centre of the campaign
  • We plan the project utilising the best channels to reach the audience
  • The design team then produce the creative material
  • Once approved, the web developers and IT team build the website
  • During this process, the PR and marketing team plan for the launch
  • The PR and marketing team reach out to media and run social media to drive people to engage

When working in the creative industries it’s important to be able to bounce ideas off each other which can then spark bigger and better solutions. The consortium approach enables us to do this efficiently.

Our multi-channel team condenses the workload for our clients and working together allows us to provide big results. Without the need to liaise between different agencies, our clients are able to concentrate on other aspects of their business. So whether it’s a start-up or an established organisation we’re working with, we can help make it a success.

Find out more about The Wee Agency at www.theweeagency.co.uk or follow us on Twitter to keep posted on the latest trends and news in the digital world @theweeagency

New Year Message

Sarah Deas resizedFrom Sarah Deas, Chief Executive, Co-operative Development Scotland

The eyes of the world will be on Scotland in 2014 as we host the Commonwealth Games, Ryder Cup and Homecoming. It’s a fantastic opportunity to showcase our country on the global stage.

Whilst we wish our sportsmen and women every success, 2014 is much more than medals – it’s a catalyst for regeneration, innovation and sustainable economic growth. An opportunity to build international business relationships, demonstrate our capability to host major events and present Scotland as a leading tourism destination. 

Commonwealth-Games-2014For Co-operative Development Scotland it’s an opportunity to shine a light on the positive contribution that co-operative and employee ownership models are playing in the Scottish economy. Working with the Supplier Development Programme, we’ve been helping businesses to tender together to compete for Games related procurement contracts – capacity building that will have long term legacy benefits. 

One co-operative that will play a key role in helping visitors discover the best places to stay, eat and drink is the Merchant City Tourism & Marketing Co-operative. The Merchant City will be a hive of activity during Games time, including hosting the venue for high profile business events. 

Another co-operative that should benefit from the growth in tourism is the Scottish Mountain Bike Consortium. Set up to increase the range and quality of mountain bike experiences, it aspires to make mountain biking the ultimate family-friendly adventure activity.

roadshow

Scotland is leading the way in the adoption of innovative business models. The coming year offers an excellent opportunity to leverage this success. Businesses that are already successfully exporting, such as employee owned Tullis Russell, Clansman Dynamics and Scott & Fyfe, are well placed to use the flexibility and power of their business model to seize new opportunities for growth. 

As Scotland ‘Welcomes the World’, hopefully you too are considering what 2014 could mean for your business. Are you capturing this once in a lifetime opportunity to profile your business and build international relationships? 

Wishing you a successful 2014

Best wishes

Sarah

Take Five

Jaye Martin 03Jaye Martin is a specialist adviser who joined Co-operative Development Scotland this summer. Here she shares her experience of what it’s like to work at Scotland’s co-operative and employee-owned enterprise development organisation.

It’s already six months into my new role as a CDS specialist adviser, focussing on collaborative business models, so now is as good a time as any to pause for a moment and take stock of my top five experiences so far in what has been an exciting and challenging few months.

 

 1. The CDS Collaboration Prize

PrintThis has been a revelation for me as I’d never been involved behind the scenes of a competition before – unless you count making up a quiz sheet for Comic Relief to sell around my village when I was 12! We were overwhelmed with the quality of the collaborative ideas contained in the applications this year and it’ll be a valuable learning experience for me to be involved in the strategy sessions for the winners when they take place in due course. Excitingly, we are poised to announce our winners shortly so watch this space…

 

2. New consortia

We support so many groups of businesses and communities across Scotland in exploring and formalising their ideas for collaboration and I love the variety this work provides. To mention only a few of the new collaborations we’ve advised so far this year: Destination Stirling, the new tourism group supported by Stirling Council, Scottish Enterprise and VisitScotland; Scottish Mountain Biking Consortium, a group of like-minded businesses committed to developing the best family mountain biking experiences, packages and solutions in Scotland; and Community of Raasay Retail Association (CORRA), the community group behind the purchase of the only shop on Raasay.

 

3. Community shares

On my second day at CDS, I attended our Advisory Board session on ‘Community Shares – Realising the Potential’. Of great interest was a presentation by Hugh Rolo of the Community Shares Unit in England. Their newly launched dedicated web platform for community share issues, Microgenius, is a potential game-changer for this growing sector. We are seeing increasing interest in community co-operatives in Scotland, particularly in relation to renewable energy generation (wind, hydro) and broadband projects.

 

4. Tweeting

Another revelation. Somewhere between dinosaur and sceptic when it came to social media,CDS Twitter I can now see the real value in tweeting, blogging and their ilk – there is the potential to strike up dialogue with like-minded individuals and organisations and to spread the word about co-operative business models. Follow me @CDSjaye and us @cdscotland to find out more!

 

5. Collective Futures workshop

I was pleased to be asked to present on the consortium co-operative model at one of the Collective Futures workshops. This is an exploratory project to define the nature and form of co-operative business models used by designer/makers to sustain and grow their creative businesses. The project is itself a collaboration between Gray’s School of Art, University of the West of Scotland, Glasgow School of Art and a selection of residents who are practising designers/makers from all over Scotland. I was (unsurprisingly) impressed at the creativity used to facilitate the discussion on collectives, particularly the ‘mood boards’ which caused much hilarity (one included a photo of Katy Perry being blasted into outer space) but also revealed inner thoughts about the pros and cons of collaboration.

And as for my top moment outwith CDS…? It has to be when a boy from Dunblane lifted the Wimbledon trophy on that oven-hot day in July. Let’s hope the next six months are just as exciting!

 

2014: An exciting time to collaborate

Marc Crothall picture

The Scottish Tourism Alliance (STA) is an independent trade body comprising trade associations, individual businesses, marketing and local area tourism groups who earn their living from tourism or have an active interest in tourism.

Marc Crothall, CEO of the Scottish Tourism Alliance, explains why the organisation has partnered with this year’s Collaboration Prize at an exciting time for the Scottish Tourism industry.

The STA’s primary role is to lead, facilitate, co-ordinate and provide support to industry to help enable the successful delivery of the national strategy (Tourism Scotland 2020) objectives and vision. Other activities undertaken by the STA on behalf of its members are to collaborate with and represent industry views to government and agencies, offer advice and information to its members and enable strong networking opportunities across industry sectors.

We are recognised by government and public agencies as a credible and fully representative ‘voice of the Scottish industry,’ which Co-operative Development Scotland (CDS) has also acknowledged, and we are pleased to have been asked to work in partnership with them as a representative of the Scottish Tourism Industry.

The STA is delighted to support CDS’s Collaboration Prize as it focus’ on one of the key elements that underpins the National Strategy (Tourism Scotland 2020) “Collaboration”.

With the hook of a great £10,000 prize, the competition creates market opportunities, facilitates collaboration, endorses sustainable tourism and helps drive economic growth in the tourism sector. All of this contributes towards the Tourism Scotland vision in: “Making Scotland a destination of first choice for a high quality, value for money and memorable customer experience, delivered by skilled and passionate people.”

Tourism is one of the most important industries in the Scottish economy, generating £4.3bn from overnight visitors, employing 185,900 within the tourism growth sector and attracting 15 million visitors in last year alone.

Now is an exciting time to be a part of the Scottish Tourism sector which will grow exponentially in the coming years with three landmark events taking place next year when Scotland “Welcomes the World” in 2014 with our second year of homecoming and two of the world’s biggest sporting events: the Commonwealth Games and the Ryder Cup.

These events are key to the tourism industry as they will not only give us the opportunity to showcase Scotland to the world, but will provide the stepping stones to delivering the growth ambition set out in Tourism 2020. Many opportunities will also be generated for our home grown talent to work together to succeed on the world stage and compete in the world market.

With these vast opportunities on the horizon the STA is looking forward to seeing the calibre of entrants that emerge from the Collaboration Prize this year and how they plan on taking advantage of these forthcoming key events. Fundamental elements we will be looking for in the proposals are: 

  • Innovative and creative concepts
  • Collaborative opportunities identified
  • Sustainable plans and projects
  • Valuable contribution to the Scottish Tourism sector
  • And most importantly, vision for future expansion and growth

The STA is looking forward to seeing what the future stars of the Scottish Tourism Industry have to offer.

If you are not yet a member of the Scottish Tourism Alliance for more information on membership please visit www.scottishtourismalliance.co.uk or email jean.kilpatrick@stalliance.co.uk

Come together to make this a summer of success for your business

Gillian Kirton 02What do three farmers from Dumfriesshire, 51 musicians from Scottish Opera and 12 Scottish Screen facilities companies have in common? Answer they all won funds through last year’s launch of the Co-operative Development Scotland (CDS) new Collaboration Prize.  Now the search is well underway to find 2013’s winning ideas. With less than one month to go until the competition closes, CDS Collaboration Prize project manager Gillian Kirton gives us the latest update. 

What do three Dumfriesshire farmers, 51 musicians from Scottish Opera and 12 Scottish screen facilities companies have in common? Answer: A desire to grow their business through collaboration.

As CDS Collaboration Prize project manager, it’s an exciting time for me.  With less than one month to application deadline, I’m waiting with baited breath to see the exciting and innovative ideas to come in this year.

Last year our competition was such a success that more than a dozen new business collaborations were established, often with different aims and objectives.  So here’s a wee taster of the sort of consortium co-operative that our prize has created:

  1. Scottish Woodlot Association was set up to enable individual foresters to rent small forest lots for timber production while helping landowners maximise their forestry potential.  It also gave them a way to share often expensive specialist equipment.
  2. iMAPcc offers dedicated team of drug discovery scientists, consultants and associates with complementary backgrounds and experience in small molecule and biopharmaceutical drug discovery.
  3. Burns Country Larder sees six Ayrshire producers of fine foods including haggis, cheesecakes, beers, deserts, chocolates and ice-creams collaborate to access events and shows all around the country.

But what about the farmers, musicians and screen facilities…our three worthy winners from 2012?

With the help of colleagues in Scottish Enterprise and Business Gateway, I’ve had the pleasure of working closely with these three groups over the last year or so, joining them on their exciting journey as they form themselves as a consortium co-operative and reap the benefits of their £10k prize.  Do view the short videos of our winners – it’s great to hear it from the horse’s mouth as they say. Hopefully it will give you the incentive to consider how collaboration can help your business.

Screen Facilities Scotland brings together the best that Scotland has to offer in screen facilities.  Over 12 companies, with more to come on board, are now collaborating to secure contracts that may otherwise have been awarded to those south of the border or further afield.  I just love that one of the members created the Fatboy Slim Octopus of the London 2012 Olympics, and another filmed the James Bond and the Queen footage!

Screen Facilities Scotland video

Three farmers from the south west of Scotland (Castle Loch Foods Ltd) have come together to produce a range of luxury charcuterie products, using their individual high quality meats. This will see them access new markets, and hopefully export overseas in due course.

DG Farmers Cooperative video

Music Co-operative Scotland now gives us all an easy way to hire professional musicians for any occasion, offering any style of music you desire. All made possible through the formation of a consortium co-operative.

Musicians Cooperative Scotland video

This year we have increased our prize fund to £40,000 – up to four winners will each receive £5,000 consultancy support, and £5,000 cash to help implement their idea.  Even those that don’t win a prize can still access a comprehensive package of free support.

We are delighted to be working with our partners from Creative Scotland, Scotland Food and Drink and Scottish Tourism Alliance, and aim to attract really good entries from creative, food & drink and tourism businesses. In other words sectors that really lend themselves to collaboration.

However – our competition is of course open to all Scottish based companies regardless of sector.

So what are you waiting for?  The deadline for applications is 3rd August.  I personally can’t wait to see what comes our way this year…

Good luck.

Gillian

Community co-operatives – realising the potential

Karen BirchThe nature of communities in modern society is evolving, but their role remains more important than ever.

Here Karen Birch, managing editor of 3rdi magazine, a leading voice of the co-operative sector, assesses the value of co-operative community enterprises.

Karen is also a member of Co-operative Development Scotland’s (CDS) Advisory Board.

 

Community co-operatives are organisations set up to provide services to a particular community which use co-operative principles to guide their activities. 

A local community, such as a village or a block of flats, has physical boundaries which makes it easy to recognise. But in the increasingly complex world most of us inhabit many different communities exist and playing different roles. For example, we may be a member of a faith group, a volunteer for a charity and or a member of a local sports team.

Almost every activity which involves people coming together for common purpose has the potential to create a co-operative community enterprise. The co-operative enterprise I am most closely involved with, the 3rdi magazine, is just such a community with women and men3rdilogo5 from across the UK coming together to create an on-line magazine which looks at business issues from an ethical perspective.

We do not serve a local community but rather serve a community with a shared interest in ethical business practices and in furthering equality and diversity in the workplace. Community is an active condition reinforced by active membership with people choosing to identify with and support community values and purpose. 

Community Investment involves members of that community buying shares in an enterprise that serves that community. It gives people a stake in the success of that enterprise. Common ownership puts the assets of the community co-operative in a similar relationship to its members as the village green is to the inhabitants of a village. Everyone has use of the asset but no one person has title or claim and no one person can dig it up and take it away. 

Throughout the last century, the model of community action has been one of volunteering and was heavily reliant on grant-funding from public sector bodies and individual philanthropy. This is not sustainable. I am a fan of enterprise and I’ve run successful businesses for the last 20 years. I see community enterprise as a real alternative to the market failures in the private sector and the continual withdrawal of funding from the public sector. 

Community enterprises provide goods and services to meet the needs of their communities. Community shareholders, unlike traditional shareholders, only expect a fair return not a maximal or rapid return on their investment. This long-term alignment of shareholders to the needs of the community enterprise, promotes long-term sustainability over short-term profit-taking. 

At a time when many communities are faced with the loss of local amenities this change in focus is, I think, crucial. And community shareholders are also far more likely to get involved, to become active supporters of the enterprise, and not just remain as consumers of products and services.

This engagement also strengthens the business model. It creates role flexibility: as customer and supplier and employee and owner is a true stakeholder model, and is more robust and sustainable than the traditional supplier-to business-to customer model. It is this combination of engagement, flexibility and sustainability that leads me to conclude that we need more community enterprise and ownership.

So, what sort of services can community co-operatives provide? Examples are wide ranging and reflect the needs of the communities they serve. These include a crèche in a tower block containing many single-parent families which has enabled them to seek work, through to a launderette in a housing estate.

Most successful community share issues focus on an asset, which is why community shops, pubs and community buildings have featured amongst the big success stories for co-operative community enterprise. As an Advisory Board Member of Co-operative Development Scotland (CDS), I’ve seen first-hand how shared ownership enables communities to develop services such as utilities and broadband, and this can work particularly well in remote regions.

However, just because a community lacks a service that it wants, it does not automatically mean that there is a viable business model that can meet that need. As with any business an opportunity only exists if there is sufficient demand from customers willing to pay a reasonable price for the goods or services provided.

With our long term energy future, particularly our reliance on fossil fuels, looking increasingly insecure, more and more attention is being drawn to renewables. Local communities are rightly seeking to benefit from renewable energy projects based in their vicinity.

By coming together to form a co-operative the local community can receive a direct financial benefit from the development and can use any profits generated to re-invest in other community projects. The profit generated stays within the community rather than rewarding shareholders outside the area.

Harlaw Hydro Electric directors (from left): Martin Petty, Simon Dormer, Lynn Molleson and Ian Hynd – pictured at Harlaw Reservoir.

A good example of this is Harlaw Hydro Limited whose purpose is to own and operate a micro-Hydro scheme. It will generate revenue by selling ‘green’ hydro-electricity. The income generated will allow Harlaw Hydro Ltd to contribute to other projects and initiatives within the local area through the Balerno Village Trust. It is 80 per cent of the way to raising £313,000 through a share offer scheme.

CDS works in partnership with other organisations such the Co-operative Enterprise Hub to help communities develop community co-operatives in the renewable energy and broadband arena. The benefit of this model is that co-owners are involved in decision-making. Income can be invested back into the community through local projects or distributed among the members.

From my perspective the key is enterprise and long-term viability and I think that the model of ownership and engagement in community co-operatives means that they can be more robust and sustainable than either their private sector or charitable counterparts.

If you like the sound of this way of doing business do sign up or visit our website: www.the3rdimagazine.co.uk/ and follow us on Twitter, @the3rdimagazine

Co-operative Development Scotland is 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.

 

One prize – One giant boost for collaboration

 Screen Facilities Scotland 08

After the success of the inaugural awards in 2012, Co-operative Development Scotland (CDS) has today launched this year’s Collaboration Prize.

Screen Facilities Scotland was one of the three winners from last summer and Joanna Dewar Gibb, business manager at ARTEM LTD explains how the initiative has had an amazing effect on the consortium’s activities.

 

In the first instance, quite simply, being one of the winners gave us a boost of confidence to the Screen Facilities Scotland (SFS) working group that professional peers also deemed what we were doing as worthy of support.  The double layers of the CDS Collaboration Prize – the practical professional support and the hard cash – gave the working group a solid underpinning for the next steps in the evolution of SFS. 

SFS is now a fully established representative trade body with members and is, in itself, a full member of UK Screen Association.  This forged link between the two entities is a valuable membership benefit of SFS and our thanks go to Creative Scotland for their support with this.

As a recognisable and formal entity, SFS has been able to work effectively with Creative Scotland in a number of other areas as well.  Working as partners, SFS and Creative Scotland set up an eye-catching “Film in Scotland” space at the London Trade Show, BVE 2013. The stand was staffed by Creative Scotland and different SFS members and affiliates.  Each of us on the stand had different knowledge and expertise to share with visitors and the result was a collaborative Scottish presence at this media expo. 

Mini FilmBang directory

Mini FilmBang directory

Alongside this, each of the SFS members, Creative Scotland and other stakeholders took the opportunity to organise a networking event in Central London whilst we were all there.  With combined guest lists and again, many of us on hand to mingle with our guests, this was a valuable opportunity to connect with key clients in London, the media production hub of the UK. 

Copies of a revised Mini FilmBang directory were handed out at BVE 2013 and subsequently at the Cannes Film Festival.  This reference book lists the facilities companies in Scotland all in one place in a handy format. 

Circulating information and contact details of all the facilities and service companies in Scotland is a key focus of SFS as part of our combined collaborative marketing efforts. 

We have produced our logo (that graces the front of Mini FilmBang) and the development of both our website and Members’ Agreement are on-going, thanks again to combined efforts both of SFS members and the business consultancy element of CDS’s Collaboration Prize. 

Across our membership, we have companies that are direct competitors but even so, we find we are able to put those aspects aside to work together in areas of mutual support and benefit to everyone’s advantage. SFS members have been sharing even administrative tasks, like chasing potential member to make sure anyone who wants to be part of SFS is a part of it.

The publicity from winning the Collaboration Prize gave SFS a further boost with articles on SFS appearing in Screen International and Broadcast magazine, two key trade journals in our business.  The £10,000 prize win was the “hook” for the bigger story of the aims of SFS. 

The £5,000 cash prize is being allocated in part to our launch networking event that will include members, clients and key industry figures.  Alongside this, SFS is also planning to have a presence at this year’s Edinburgh Festival and Media Guardian Edinburgh International Television Festival. 

Business consultancy from Co-operative Development Scotland worth £5,000 was also given as part of the prize and has been incredibly worthwhile.  The different experts made available to SFS have each helped focus the working group to achieve key milestones in establishing SFS in a more straight-forward and professional streamlined way. 

SFS photo

On a strategic level, there is an industry-wide period of examination and evolution going on in our core business of film and television production. SFS is now established as a point of reference for those consultants and others charged with reviewing the health of the production sector in Scotland, including the current considerations about building a Scottish Studio facility. 

This is exactly where we wanted to get to. 

It means hard-pressed business managers/owners do not have to be approached separately on every matter but rather, with one point of contact under the banner of SFS, views of busy people can be amalgamated and submitted collaboratively.

In due course SFS plans to have a part-time administrator to manage its business. In the meantime, what is clear on a daily basis is that within SFS there really is strength in numbers and tasks – when tackled co-operatively – become so much more efficient and effective as a result. 

Being one of the CDS Collaboration Prize-winners gave SFS a most incredible boost at the outset of its evolution and we moved forward so much more quickly and efficiently than would have been possible without it. 

This article also appears in the latest edition of 3RDi magazine. Click here to view.

You can follow Screen Facilities Scotland on Twitter @ScotFacilities

Co-operative Development Scotland is 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.

Success is the common currency of employee ownership…

Carol LeslieEmployee ownership is a business model that reaps rewards for companies home and abroad. Carole Leslie, specialist adviser, Co-perative Development Scotland, reports on her visit to America and why success is the common currency between UK and US employee owned firms.

we the owners

 Here at CDS we’re always keen to cast the net as far and wide as possible when it comes to broadening our understanding of employee ownership. Last month we ran a highly successful series of screenings across Scotland of the powerful film We the Owners: Employees Expanding the American Dream,which interviewed American workers. It cut to the heart of what it means to be an owner in your own business. 

  

I was also fortunate enough to travel to the US recently to take in a conference of employee owned businesses (EOBs) in New England. I was struck by the similarities rather than the differences that exist between British and American models of ownership.

On both sides of the Atlantic, companies owned by their employees are competitive, professionally run, excel in their sector, and operate a form of responsible management with inclusive and transparent governance systems. The result is a more robust and fairer model of business. 

carris reels logoA good example is Carris Reels. Carris Reels designs and manufactures reels and spools for the wire and cable industry, employs 450 staff and has locations across the US and in Mexico.

 

 

BillI met with Bill Carris, who engineered the transition to employee ownership in 2008. Bill’s father started the business in 1951, and Bill grew up in the company, taking over as CEO in 1980. Father and son shared the recognition of the importance of the individual, and of community.

 

 

Bill looked to find ways to involve employees more in the business. He knew that many companies pursued “emotional ownership” but he wanted his employees to have real ownership of the business. He embarked on what became known as the “LTP” or Long Term Plan, which would not only transfer 100 per cent of the ownership to employees but also 100 per cent of the governance.

Carris Reels 2Herein lies the real challenge. Firms who have gone through the transition, whether in UK or US or anywhere else, would agree that getting the technical elements in place is the easier bit of the business transfer process. Attaining true ownership – hearts and minds ownership – is much more difficult. Speaking with some of the employees and seeing the business results left me in no doubt that Carris Reels has been successful in achieving that transformational culture of employee ownership. 

Carris Reels used a three stage process to implement their ownership culture. The first step was to set out the objectives and vision. Bill Carris was quite clear in what he was looking for – total employee governance to fit with total legal ownership.

Carris Reels

The second step was to make this vision real by building the capacity of employee owners to understand what ownership means for them. This included a wide ranging examination of the business goals and how the company is managed.

A thorough education programme was implemented which explained the risks and rewards, company strategy and operation, and the technical details of ESOP operation.

 

The third stage examined the context for employee ownership, ensuring that managers and staff have the appropriate skills to manage and work in a transparent and productive environment. As part of this stage, structures for employee involvement and participation were devised and introduced, as was a systematic process clarifying decision-making responsibilities. Each one of these three stages is constantly assessed, reviewed, revisited and new recruits are fully inducted.  

Carris Reels StaffThis kind of programme might appear daunting and time consuming, but the long term benefits are evident. Indeed, Scottish firms such as Clansman Dynamics and the Keil Centre will testify that doing the spadework in the early stages reaps rewards later on and brings success much more quickly. Getting the legal structures and the tax repercussions resolved are both important; but these are only the start of what is a continual process.

The US experience tells us that legislation to support employee ownership in tangible ways is key if we want to see a step change in growth. However, to achieve that transformational change takes sustained and considered application. In many ways, the technical architecture is just the vehicle.

Achieving true employee ownership takes courage and conviction. But US companies like Carris Reels and native examples like Woollard & Henry and Accord Energy, clearly show the results are positive and far reaching.

Co-operative Development Scotland is 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.

Seafood Producer Serves Up Food For Thought…

Angela Wardrope hi resScotland has a thriving food and drink sector. Employee owned companies like seafood producers Aquascot are reaping the rewards of co-operation.

Angela Wardrope, project manager, Co-operative Development Scotland, shadowed Aquascot’s Dennis Overton when he went before the Scottish Parliament Cross Party Group on Food.

 

I had the opportunity to hear Employee Ownership Ambassador Dennis Overton from Aquascot address the Scottish Parliament Cross Party Group on Food in January. The experience provided an insight into Aquascot’s journey towards employee ownership and a fascinating bird’s eye view of Scotland’s food and drink sector. It got me thinking about the bigger role co-operation could play in this industry. AquaScot Dennis Overton 94

Aquascot is based in Alness and takes its inspiration from the 1920 pioneering profit sharing model of employee ownership set up by John Spedan Lewis. The seafood producing firm began its journey towards employee ownership in 2008, which it will complete 2016. 

AquaScot 02In 2008 the main driver was to sustain and grow the business for the future. The potential was huge: a strong team, accelerating health drivers, expertise in aquaculture and strong market demands. A business owned by the employees was the only solution to create long term value in a fairly remote part of Scotland.

Now, four years later turnover has reached £29m and total staff numbers are up to a healthy 135. Aquascot is also benefiting from a reduction in absenteeism and leaving rates – half that of the sector average. Staff are twice as productive as the sector average and feel they can bring forward ideas that are listened to and implemented.

AquaScot 05So what is the wider potential for this model in Scotland’s food and drink sector? The industry is made up of lots of micro-businesses, a few large family businesses such as Tunnock’s and Mackies and a few giants like Devro. The industry also has plenty of first generation entrepreneurs, who in my view would be a great fit for employee ownership. The challenge is how we ensure other companies take inspiration from the benefits enjoyed by Aquascot, and think about employee ownership themselves.

But back to our parliamentarians. A good debate took place amongst Cross Party Group members following Dennis’s address. They wanted to hear more about the risks when changing ownership structure and how businesses adapt to this change. Dennis responded by pointing out the difference between ownership and management. He conceded the transition process can add complexity to the mix, but a well run business is a well run business, irrespective of the ownership structure. 

A question was also raised around ‘co-opetition’, when businesses co-operate with competitors. At Co-operative Development Scotland (CDS), we are seeing a strong appetite for this. Especially where there is an opportunity for businesses to collaborate to help a sector grow.

For example Food from Argyll is a consortium of nine food producers that came together to sell their produce at events under its singular banner. Overall, the members all saw the co-operative as an opportunity to get into a market that would be really hard to crack on their own. A consortium co-operative allows single businesses to pool their resources in this way without compromising their independence as singular entities. They look at the bigger picture and will reap the benefits as a consequence. 

Best of Food Argyll 2So did the Cross Party Group members feel that co-operative business models were a good fit for Scotland’s food and drink businesses? Overall, there was a feeling that any form of co-operation would be beneficial. And that much more needed to be done to promote collaboration for the benefit of the sector.

CDS supports all businesses in Scotland, irrespective of sector or size. If you like the sound of accessing bigger markets through co-operation we can help you. We have produced a short paper on Scotland’s food and drink sector, so if you want to read more see: Co-operate for growth; Growing Scotland’s food and drink sector.

Co-operative Development Scotland is 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.

Employees can have their ‘stake’ and eat it…

Austin Flynn - PortraitAustin Flynn is a corporate lawyer and head of Morton Fraser’s business team where he advises business owners from across the UK. Here, he reflects on the rising popularity of employee ownership and says workers’ rights need not be compromised by this business model.

 

 

For more than twenty years I’ve been advising businesses on a variety of corporate and commercial legal matters. For most of that time the majority of my clients have been owner-managed. As a result, the person who’s instructing me not only works for his/her business, but also owns it, has capital tied up in it and sees the business as ‘part of the family’ and inextricably linked with it.

There isn’t the kind of work/life distinction that allows owner-managers to leave work behind when they get home and it certainly creates a different dynamic when compared with taking instructions from someone who is simply an employee and has no share in the business. Interestingly, increasing numbers of my owner-managed clients are now looking at ways of giving their key employees a financial stake in the business.

sharesThese range from share option schemes where a small proportion of the company is made available, to more radical and far-reaching re-structurings that in some cases can effectively be a partial exit for the owner. As with anything in life, there’s no ‘one size fits all’ solution when it comes to employee ownership but it’s striking how popular the concept has become, thanks to organisations like CDS spreading the word about the benefits.

On my own weekly blog on the Morton Fraser website I commented last year on George Osborne’s new owner-employee contract under which employers will be able to award shares to staff in return for staff giving up unfair dismissal, redundancy and training rights and also relinquishing the right to ask for flexible working.

FiguresI commented at the time that as a fan of employee ownership I couldn’t see any reason why an employee can’t have his/her employment rights and a stake in the company. My guess was that many of the benefits of true employee ownership (increased productivity, innovation and profitability) would be undermined by a structure where the employee is shackled to a company and can be walked over roughshod. Also, the lack of liquidity in the private company share market could make the value of such shares very subjective anyway.

 

It was therefore interesting that recently in the House of Lords John Gummer declared the plans to be ‘mystifying’, adding “I cannot imagine in any circumstances whatsoever that this would be of any use to any business that I have ever come across in my entire life.”

Lord Pannick QC added: “What is so objectionable is that these employment rights were conferred by Parliament over the past 50 years and they have been protected by Governments both Conservative and Labour precisely because the inequality of bargaining power between employee and employer means that freedom of contract is quite insufficient to protect the employee. To allow these basic employment rights to be traded as some sort of commodity frustrates the very purpose of these entitlements as an essential protection in the employment context.”

I couldn’t have it put it better myself, so I won’t even attempt to do so.

Co-operative Development Scotland is 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.

A co-operative consortium that’s bringing home the bacon…

D&G Farmers Cooperative 02Farmers Nigel and Angela Taylor look after 180 Highland cattle at Castle Douglas, Dumfries and Galloway. The company, Barlochan Highlanders, was one of three similar outfits to win the CDS Collaboration Prize. Here, Nigel reports on why forming a co-operative consortium with Annanwater Organics and Clash Saddlebacks will bring home the bacon.  

 

 

I once read that forming a co-operative could best be described as a leap into the unknown. Until now I never fully appreciated the scale of the challenge involved, but more importantly I’d never really considered the huge benefits that taking a collective approach to a business can bring.

All that changed a few months back when myself and two other farming outfits from Dumfries and Galloway found ourselves clinking champagne glasses together having just won £10,000 worth of funding as part of Co-operative Development Scotland’s (CDS) inaugural Collaboration Prize

My partners are Steve and Sarah Burchell from Annanwater Organics, based near Moffat, who sell organic blackface and blackface-cross lamb and Robert and Caron Stewart, based at Port Logan, whose firm Clash Saddlebacks sells rare breed traditional pork and bacon.D&G Farmers Cooperative 07

The first strength of our enterprise is the fact that we have known each other for years and our triumvirate of existing businesses all share an obsession with delivering produce of the highest quality. Here in Dumfries and Galloway we all have the same approach to high animal-welfare, outdoor reared, slow grown, ethically and locally sourced and artisan produced meat.

We would all tick the same boxes and this has proved a positive foundation to forming our co-operative.

So what’s the big deal? Well, I guess it’s all to do with working together…the very definition of a co-operative, you might say.

Of course agriculture is known for its solitary lifestyle. After all my outdoor office in the beautiful Scottish countryside, and comprises just me and 180 Highlanders (cattle that is!) and we spend most of our days together. It’s only when a rep turns up, or I have to go and get something fixed, that I meet anyone else.Highlander Barlochan 2 for blog

Farmers’ markets each weekend throughout the season can be a real test of my dormant social skills.  We are simply not used to working with other people, especially when we only have a share of the decision making process. But then again, that’s the whole point.

Setting up a consortium has been a big step forward for each of us. We have immediately been thrown into a season of re-adjustment that we could never have envisaged. Geographically separated by almost 100 miles of open space, we have had to plan ahead and consciously think about how to communicate. Whoever invented the conference call deserves a pat on the back.

We have had to adjust to each other’s timescales in terms of lifestyle and when we are each available. Steve & Sarah (Burchell) from Annanwater Organics, out at Moffat, are just about to embark on what is their most demanding time of the year … lambing! Sheep Annanwater 2 for blogWhilst Robert and Caron (Stewart) in the fantastic area of Port Logan with Clash Saddlebacks are always busy.

Saddleback Clash 1 for blogGood communication will be key to our success and is all part of our exciting new venture.

I think each of us are quite creative in their own way and that again is important for this enterprise. We each have strengths and specific areas of experience that we each bring to the kitchen table (or conference call).

Okay, we each have our weaknesses and areas we would rather avoid, but somehow the co-operative knits together six individuals, all from different backgrounds, knocks out all the rough edges off, sticks us all back together, and then gives us something exciting and rewarding to fight for.

The future looks bright. We are just about to sign the lease for premises that will enable us to develop an exciting range of pork, beef and lamb added value charcuterie products, as well as providing a distribution and admin location.

Our new branding (including new co-operative name … watch this space) is in development with one of the top marketing companies in Scotland, and we just can’t wait for the summer when we are planning our official launch.

So, to answer the initial question: Yes, we are taking a huge step, but so far we are all finding it a hugely exciting one to be making.

Highlander Barlochan 4 for blog

Co-operative Development Scotland is 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.

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

Collaboration Italian Style!

My recent visit to Emilia Romagna left me excited about the possibilities for co-operatives in Scotland. In this third instalment I share insights in how collaboration is core in this famous European co-operative region.

Before visiting Emilia Romagna I was very much aware that it is the ‘home’ of business consortia and industrial clusters. Robert Putman (Professor at Harvard University) identified culture as a key driver. I was keen to gain a deeper understanding of this and what else was driving this collective approach.

Collaboration is the norm in this region, with companies collaborating while remaining competitors. The form of collaboration varies from relationships centred on a specific contract to fully constituted ventures established to enable on-going business. Firms are highly specialised and exist as part of a co-operative production system and as such, there is a genuine desire to work with others. Success of one firm is intimately connected to success of others – a recipe for success. 

Emilia Romagna is known for leadership in the production of specialised manufacturing machinery – expertise that builds upon its strengths in agriculture, ceramics, textiles and packaging. Collaboration lies at the core – creating vibrant industrial clusters.  Often businesses will be members of more than one consortium or industrial cluster. Similar practices exist within the service sector.

Throughout the world collaboration is well established in agriculture.  In Italy farmers owning vineyards are members of consortium co-operatives which harvest grapes on their behalf and the latter are members of secondary consortia that produce the wine. 

During my stay, I enjoyed a visit to one of the Cervico Group’s plants.

The co-operative was established in 1963 and is now number one producer in boxed wine and number two in packaged wine (bottles/Tetra Pak) in Italy.

 

 

The business is self-financing and has recently undertaken major capital investment. I was fascinated by the pallet storage system’s use of gravity to move the next pallet into position!

 

I was also interested in the finance and services consortia. These are a relatively recent development for the region. Legislation was passed in 1991 to encourage the creation of ‘business clusters’ and ‘inter-firm co-operation’ with three types of consortia emerging; credit guarantee, export and services.

Credit guarantee consortia operate like lending circles, with individual loans guaranteed by other firms in the consortium. Business members pay a fee, which may be supplemented by the government. The resulting ‘guarantee fund’ is deposited in a credit or banking institute, with which a specific agreement has been established. It is used as collateral for credit extended to members. By doing it this way the risk associated with lending is divided between the bank and the credit co-op, or borne completely by the latter.

The advantages to entrepreneurs is that they do not need to provide collateral based on personal assets and are able to access credit at relatively favourable terms. A positive aspect of this model is that the default rate is a fraction of that of a normal bank – due to the credit guarantee consortia’s role in monitoring. In Emilia Romagna the insolvency rate by firms guaranteed by the consortium is less than one per cent compared to a national average of ten per cent.

Export consortia promote members’ goods/services abroad and facilitate their export. The model is now well established with approximately 350 consortia. The high number is the result of the law establishing public funding for export consortia with more than eight members (small & medium sized enterprises). Government will contribute up to forty per cent annually to operating costs (higher level in first five years and for those based in Southern Italy).

Consortia comprise groups of firms that pay a one-off lump sum to underwrite the consortia’s capital and an annual membership fee for operating costs. Services vary and include market information, translation, secretarial, credit guarantees, merchandising, franchising and legal assistance. Consortia may also benefit from tax reductions – the ‘indivisible reserve’ is tax exempt and so too are the services rendered and acquired by the consortia. I was told about a textiles consortium in Prato that worked with its members to produce a new image, developed an export culture and other ventures to improve competiveness.

Services consortia play an important role in providing strategic advice, payroll, marketing, bidding and fundraising guidance to their members. They offer the advantage of access to skills and economies of scale.

So some further lessons for us in Scotland.  It was crystal clear that there is significant benefit to be gained from working with other businesses in order to achieve scale in buying, producing and selling. There is scope for much wider levels of adoption of this model in Scotland – especially for export purposes.

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.

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