The Scottish Government has made a clear commitment to making Scotland a wellbeing economy and has identified inclusive business models such as co-operatives, employee ownership and social enterprises as key contributors to this. Throughout 2023 and 2024 the number of inclusive business model businesses in Scotland continued to grow with both Co-operatives UK and our own research reporting increases in the employee ownership and co-op sector.

  • Co-ops increased to 621 from 603 (The Co-operative and Mutual Economy, Co-ops UK, September 2023,  https://www.uk.coop/resources/co-operative-and-mutual-economy-2023
  • Employee-owned businesses increased from 195 to 286, Scottish Employee-owned Business Census March 2024, University of Leeds, University of New South Wales and the White Rose Employee Ownership Centre (WREOC), 31 March 2024

At a time when a significant number of businesses report ongoing financial challenges, co-op and employee-owned businesses continue to buck the trend by demonstrating resilience and stability. 

As Scottish Enterprise moves forward with the mission-based approach, we look forward to collaborating with our colleagues to build on the the strengths of the sector and maximise the potential of these models for Scotland.

Over the course of the year, the Inclusive Models Team, which includes Co-operative Development Scotland (CDS) has been focused on delivering client support, strengthening partnerships, and raising awareness of the role and value of inclusive models in our economy. Key activities include creating content, running events and researching the sector. It’s been another busy twelve months and we are excited to share the highlights and our ongoing work to support SE’s mission approach as we move into the new financial year.

Darah Zahran, Team Leader of Inclusive Models and Co-operative Development Scotlan

Supporting our clients

Our co-op expert support is offered to businesses and communities who want to adopt or develop a co-operative business model. Open to both new start and existing co-ops, it includes advice on feasibility, structure, governance and member engagement.

For those considering employee ownership we offer up to three days of funded support with an experienced adviser to review all the business succession options available. If employee ownership is identified as a possible solution, we will provide funding for an employee ownership feasibility study.

Over the course of the year the team has fielded 143 enquiries, supported 40 clients and 28 new co-ops and employee-owned business have been established.

 

Blue background with white text stating: Direct support 143 enquiries 40 clients supported 28 new EOBs & co-ops created

Building Awareness

The team plays a key role in building the market which sees us initiating and supporting many events as well as ongoing marketing and media activity.

Green background with paper icon. Text stating Content 44 pieces of content created 18 videos, 13 blog articles, 13 podcasts 3.8k listeners accessed our podcasts

Events

CDS hosted the Selling your Business Masterclasses series aimed at business owners considering an exit from their company. Attendees heard from employee-owned Narro Associates, Livingston James, Pacific Building, Esteem Training, Microtech Group, Caley Timber, Shuttle Buses and Alternative Systems Protection.

Alongside this the team hosted the Employee Ownership Explained webinar series aimed at professional advisers including accountants, lawyers and banking staff around the technical aspects of employee ownership. Attendees were upskilled in the following topics: taxation and the EOT, a deep dive into the EOT and recognition and reward – share schemes with-in the EOT business. 

To complement our comprehensive employee ownership offering we also ran a pilot programme, in conjunction with Co-ops UK, to offer introductory workshops to those considering a co-op. 

This featured established co-ops: Loco Home Retrofit; Fractals Co-op; Jangling Space; and Harlaw Hydro.

Following its success, we look forward to developing this programme further in 2024. Attendees across all webinars and masterclasses totalled 286.

For the second year running, CDS hosted a two-day Employee Ownership Learning Journey to employee-owned companies in Renfrewshire and Lanarkshire.  36 attendees got the opportunity to meet guitar guitar, Allstaff, Chemco International, Stewart-Buchanan Gauges, Clansman Dynamics, Galloway and MacLeod and guest speaker Dave Routledge, a senior executive who has been involved with employee-owned businesses since 1999 including eaga Partnership Gripple and WCF.  Feedback included: “Totally inspirational two days getting to see how successful businesses have embraced employee ownership to the benefit of the business and employees.” Helen Seaborne, Lisle Design Ltd

Policy and Strategy

The Missions

The team is committed to supporting SE’s new mission approach and help achieve transformative and sustained change in Scotland’s economy.  The Green Energy Mission provides us with the clearest vantage point to identify economic opportunities that align with the values and principles of inclusive business models. The team also believe that inclusive models can complement all of the missions’ objectives through embedding key democratic principles and structures across our future industries and scaling companies where appropriate. Work is underway to fully understand and communicate the opportunities here. 

NSET: Inclusive models review and community wealth building consultation

A key commitment from the Scottish Government has been to carry out an inclusive business models review, and the Inclusive Model Team has played a key part in this process on behalf of SE. This is aligned the Scottish Government’s commitment to introduce community wealth building legislation during its current term. The approach is made up of a framework of five pillars, one of which is plural ownership which includes inclusive models such as social enterprises, co-ops and employee-owned businesses. We are playing a key part in these policy developments, both as active members of the government-led steering groups participating in the consultation process and in terms of our engagement plan detailed below to deliver the NSET ambitions and outcomes.

 Research

The Scottish Government has an ambition for 500 employee-owned businesses (EOBs) in Scotland by 2030. CDS commissioned research with University of Leeds, University of New South Wales and the White Rose Employee Ownership Centre, to provide a census of the number of EOBs operating in Scotland. The 2024 Census updates an earlier census carried out in 2022. 

The census shows that as of 31 March 2024, there are currently 286 EOBs operating in Scotland, comprised of 177 Scottish-registered EOBs, 25 Scottish-registered workers’ co-operatives, and 84 EOBs that have some trading or production operations in Scotland but are registered elsewhere. The census also reveals that the Scottish-registered EOBs and worker co-operatives have a combined turnover of £1.643 billion and employ 7,593 people.

 

 

Community Wealth Building Engagement Programme

A key programme this year to support the policy work above was the development of a programme of workshops around Scottish Government’s community wealth building (CWB) ambitions. The programme was designed to address gaps in knowledge in inclusive business models and was created to support partners across all local authorities and local economic development agencies as they develop and implement their CWB strategies. The programme was comprised of four CDS workshops to focus the plural ownership pillar with eight follow up partner workshops focusing on the remaining pillars of community wealth building. A follow up alternative business model workshop was also provided to previous attendees.  362 attendees participated across the programme which every local authority area engaged in.   This work has proved incredibly successful with unprecedented attendance across all events.

2023-2024 has been a hugely productive year and the team has ensured continued awareness of the value and potential of inclusive models. We are now focused on building on these successes in the coming year. We look forward to supporting the growing numbers of co-ops and employee-owned businesses across Scotland and integrating the team’s activity into SE’s overall missions approach to create a more competitive, productive and fairer economy.