Friday, 23 April 2010

Cooperatives and Social Enterprise in Europe

In March, I was at a European meeting between cooperative representatives (, european social enterprise representatives and officials of the European Commission. Our task was to find common understandings. Not easy!

In the rest of Europe, it is commonly accepted that social enterprises are democratically governed. In many countries they have to be cooperatives eg Italy which invented the 'Social Cooperative' to provide local community social services under contract to state funders.

But the UK is very different. Our social enterprises tend to be chief executive led and not democratic. In the UK we therefore see rapid growth and very large social enterprises which are 'corporate' rather than 'community' focussed.

This was my contribution:-

Bob Cannell, Cooperatives UK (UK):
There is a need to understand our (Cooperatives and Social Enterprises) differences and to harmonise our understanding.
It is possible to harmonise some of the principles. We are not going to get one working definition.

In the UK, the “chief executive social entrepreneur” is the norm.

What does “social” refer to? To governance? To goals and outputs? There is a very different understanding of this word.

If governance has to be social, then the cooperative is the model.

If the goals and outputs are to be social, we are talking about a very different type of enterprise. It gets confusing if you interpret “social” as referring to the goals.

The response to the economic crisis should be local. But corporate social enterprises have no local links. There are two possible responses:

1/ Local community response: responding to local needs (employment, etc.)
2/ Corporate response: incentives by the state for corporate social entrepreneurs to take over public services (for example, the reform of the NHS in the UK ).

Contract negotiations are incredibly complicated; there are economies of scale in contracting hence the big fish get bigger and the small ones get squeezed out. Consequently, local links get broken in the process.

We must emphasise democracy and participation. In the UK, we did have a wall between social enterprise and the cooperative, but both movements are now talking. We should prioritise the definition of general criteria: in this perspective, a loose definition is needed, not a tight one. We should make sure that large corporate do not dominate community-based response.

The cooperative movement and social enterprise, franchising models, cooperating with each other, is a challenge for us. Private investor corporations will be moving in, it is so easy for the State to contract with those people to provide services, but that is not what we cooperatives and social enterprises want at all.

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