Worker cooperatives, worker owned and managed businesses, are especially prevalent in northern Italy. There are several reasons for this: Firstly, since the late 19th century, the labor movement in that region, which has historically been quite strong (though faced brutal repression during Mussolini’s rule), has consistently promoted small-scale worker cooperatives; Secondly, the Italian government, recognizing the undeniable socio-economic benefits of such enterprises, has been facilitating the expansion of worker cooperatives for decades. By 2011, 1.1 million, or 6% of the Italian population, were employee-owners in the country’s 43,000 cooperatives. Collectively, these businesses generate about 127 billion euros annually, that’s 7% of Italy’s GDP. In the Emilia-Romagna region in particular, which includes the city of Bologna, more than half the population are members of worker and/or consumer cooperatives and about 30% of the region’s GDP is derived from such enterprises. Unlike in other places, worker cooperatives in Italy, far from being rare but thought-provoking oddities, constitute a formidable segment of that country’s overall economy.
Worker cooperatives in Italy employ certain smart business strategies that allow them to persist and flourish in the contemporary transnational marketplace. Specifically, many Italian worker cooperatives have formed networks of small-to-mid scale worker cooperatives that are able to pool capital and risk and maintain a certain standard of employee-owner training and skill, practices which often counteract the detrimental impacts of international economic dislocations by promoting localized economies and flexible workforces. Additionally, Italian worker cooperatives, true to their history, remain highly politically mobilized. They’ve secured non-profit status from the Italian government and, in exchange for an obligation to reinvest a portion of their annual profits into growth and the creation of further worker cooperatives, enjoy certain tax exemptions. By maintaining a reasonable scale and investing, first and foremost, in their own employee-owners, Italian worker cooperatives are able to maintain sustainability and ensure firm and job survival even under volatile conditions (Italian cooperatives, like Spanish ones, weathered the 2008 financial crisis particularly well). While conventional hierarchical firms the world over continually fall victim to outsourcing, downsizing, bankruptcies, etc. as a result of globalization, most Italian cooperatives continue to prosper.
Legacoop, with 14,500 businesses and 450,000 worker-owners, is one of Italy’s largest cooperative networks. Like Mondragon, it encompasses cooperatives in a variety of industries: manufacturing, retail, insurance, travel, construction, agriculture and banking – just to name a few. Most importantly, Legacoop acts as a vehicle through which Italians promote and protect the interests of there country’s larger worker cooperative movement. Their “Generazioni” program provides vital vocational training and retraining for worker-owners in up-and-coming industries, a practice that adds to the workforce’s value and flexibility. Another program, “Bellacoopia,” allows young students in Emilia-Romagna to submit business plans focused on promoting economically sustainable start-ups in annual competitions; this helps to educate younger generations about the benefits of the worker cooperative business model and inculcates entrepreneurship among prospective worker-owners. The “Innovacoop” and “Rete Regional Dei Servizi” programs both provide consulting and other forms of support to cooperatives within Italy and facilitate cooperation among individual cooperatives within Italy and between Italian and other international cooperatives. Legacoop both ensures sustainable and relatively just economic activity in northern Italy and, like Mondragon, acts, to some degree, as a revolutionary catalyst for worker cooperative enterprises internationally.
Several policies of the Italian government have been vital to the continued growth of worker cooperatives in that country. Foremost among them are those derived from Italy’s Marcora Law, which was passed in 1985. This law provides recently laid-off Italian workers with the option of immediately collecting their accumulated unemployment payment from the Italian government in a lump sum, as opposed to in increments over the course of several years like in most countries. The said lump sum recipient is subsequently required to capitalize the greater part of their payment in a local cooperative startup (often in the same industry that they were laid off from); their investment in the enterprise is then matched threefold by several Italian government funds. The first of these funds, FONCOOPER promotes and facilitates cooperative expansion generally, while the CFI provides fair loans to cooperative startups. Capitalization funding for cooperative startups have further been supplemented by the recent allowance by the Italian government of outside investing in such enterprises (vitally, the cooperative startups must remain 75% owned by their worker-owners, with outside investing generally coming from public bodies and other cooperatives). With a 90% success-rate over the course of several decades, Italian cooperatives which have been incubated through the Marcora Law provide an incredibly useful example to policy makers across the globe.
Here in Italy is a government successfully seizing on the opportunity provided by the problems of deindustrialization, outsourcing and globalization to both alleviate the pains of dislocated workers and give them the tools to become successful small-scale entrepreneurs themselves. Most impressively, the Italian government and, importantly, the popular labor movements that they’re responding to, exemplified by Legacoop, are crafting a more sustainable and just economy defined by solidarity, cooperation and mutual aid – one free from the domination of the capitalist and managerial classes. Governments and labor movements across the globe should take note. There are few concrete reasons why some variant of Italy’s Marcora Law could not find success in postindustrial American communities.
For more information on worker cooperatives, check out: https://newgracchi.wordpress.com/2014/06/16/alternative-economics-the-worker-cooperative-2/
For more on the Mondragon example, check out: https://newgracchi.wordpress.com/2014/06/16/alternative-economics-the-mondargon-story/
Sources: 1) John Logue “Economics, Cooperation, and Employee Ownership: The Emilia Romagna model – in more detail” Ohio Employee Ownership Center (2006): accessed December 3, 2014 http://dept.kent.edu/oeoc/oeoclibrary/emiliaromagnalong.htm
2) Jeffery Hollender “Legacoop Cooperative in Bologna, Italy Empowers Worker-Owners” TriplePundit (August 26, 2011): accessed December 3, 2014 http://www.triplepundit.com/2011/08/legacoop-cooperative-bologna-italy-empowers-worker-owners/
3) “Marcora Law” Wikipreneurship: accessed December 3, 2014 http://wikipreneurship.eu/index.php/Marcora_Law