Cooperative business have a much higher rate of survival than conventional businesses. A 2011 study of cooperatives in British Columbia found that 5 years after establishment, 64% of co-ops were still in business, compared to around 40% of conventional businesses.
The famous Mondragon Cooperatives, in the Basque region of Spain, the world’s most successful worker cooperative system, provides another example of the resiliency of the cooperative model. Its more than 250 cooperative enterprises and 83,000 worker owners are strengthened by an integrated network that provides mutual support in the form of finance, training and education, research and development, and providing re-deployment for worker-owners from enterprises that need to shrink their workforce. Joel Barker of the Drucker Foundation observes that Mondragon is very strong in nurturing start-ups, “…its entrepreneurial success rate has been 80 per cent! That is the failure rate for the rest of the world!”
If we are looking for business models that will provide stable employment, cooperatives offer a promising alternative to conventional businesses.
Created by CPE Member Economist Emily Kawano
October 2011
Sources:
Barker, Joel A. “The Mondragon Model: A New Pathway for the Twenty-First Century,” in Frances Hesselbein, et al (eds), The Organization of the Future (New York: The Peter F. Drucker Foundation/ San Francisco: Jossey-Bass, 1997).
http://www.joelbarker.com/downloads/Mondragon.doc
Carl Davidson, “Mondragon diaries: Five days on the cutting edge: Studying real world worker-owned co-ops”, SolidarityEconomy.net, September 19, 2010.
http://www.solidarityeconomy.net/2010/09/19/mondragon-diaries-five-days-studying-cutting-edge-people-and-tools-for-change/
Murray, Carol. “Co-op Survival Rates in British Columbia,” BALTA, June, 2011 http://www.bcca.coop/sites/bcca.coop/files/BALTA_A11_report_BC.pdf
