Good public policy can help create the right conditions for people to set up and grow successful co-operatives. Right now, the policy environment for people developing co-operatives requires improvement.
Too many communities struggle to sustain the rich, resilient and radical civil society they need to shift their economic and social circumstances. Within this knowledge and knowhow about co-op options is limited and can be hard to access. This has not been helped by the long term underinvestment in community development, nor by the paucity of useful information and advice provided through public and quasi-public channels.
Legal and regulatory frameworks for people choosing a co-op option are not as user-friendly as they should be. The processes for incorporating along co-operative lines can be complicated, costly and time-consuming and co-op law is in need of both routine maintenance and strategic reform.
There are some distinct challenges for co-operatives around raising start-up and growth capital that go beyond those experienced by new ventures in general. Government finance and tax initiatives aimed at supporting business development and the social economy are usually of little or no use to most co-ops.
Achieving scale in the co-op economy
There is a lot of discussion about how to foster greater scale in the co-op economy. Co-operative scale and scalability must be understood and approached differently from the scale and scalability in shareholder capitalism. There are often natural limits to the growth of individual co-operatives. While there is certainly scope for more co-operatives to achieve a larger scale within their contexts, scale in a co-operative economy should also be understood as a collective endeavour between many autonomous enterprises.
When it comes to how to achieve scale, the UK has a lot to learn and adapt from the strongest co-operative economies around the world. There are six mutually reinforcing practices needed to achieve scale in the co-operative economy, each of which can be supported through a range of policy actions in areas such as tax, legal reform and enterprise support.
Six mutually reinforcing practices needed to achieve scale
- Financial, commercial and operational co-operation between co-operatives, to increase their collective capabilities and resilience, while retaining an autonomy and scale appropriate to their purposes
- The proliferation through reproduction and adaptation of successful co-operatives that have grown to a size appropriate to their members’ needs and aspirations
- Knowledge exchange so that growing co-operatives have access to the right information, advice and support
- Use of digital to allow existing and new forms of co-operation to function at scale
- A well-developed system of common wealth creation that builds, retains and recycles wealth within the co-operative economy
- The co-operativisation of organisations and businesses that already exist at scale