Friday, 23 March 2018

Some Reasons why the 1970s Wave of UK Worker Coops Faded Away and Why there is an Upsurge in the 2010s

Cooperative Development Support

In the late 1990s ICOM (the former worker cooperative federation) did a cluster analysis of location of worker coops and CDAs (cooperative development agencies) in the UK.  It was very clear that existing worker coops clustered around long standing CDAs. There were few where there had not been a CDA. With some odd exceptions eg Suma Wholefoods, the largest 70s worker coop, in Leeds and Halifax.  

It was also apparent that the loss of worker coops seemed to be higher where CDAs had disappeared previously due to loss of funding by local authorities as they lost funding from the Conservative governments of the 80s and early 90s.

Social Enterprise UK Style

But when the Blair Labour government won a landslide victory in 1997, they emphasised social enterprise. Cooperatives were deemed to be 'innefective and obsolete' by the promoters of social enterprise. They successfully lobbied the Blair administration to put all their considerable 'third sector' support into promoting social enterprise. Which meant that there was almost no cooperative development support or awareness raising on the ground. No one with any authority wanted to hear about cooperatives.

Social enterprise thought leaders of the 90s discounted democracy as part of the governance of their type of social enterprise, creating a gulf between cooperatives and UK social enterprise (unlike on the continent where social enterprise and cooperatives intertwine).  This was the case until fairly recently. 

Change in Attitude

Conservative politicians disliked social enterprise 'Blairstyle', they referred it as 'jobs for the children of labour politicians'. After 2010 and the election of a Conservative led government it was again possible to start talking about cooperatives in the UK without getting the cold shoulder from government (local and national). Cooperatives fit the politics of all major parties (for different reasons) even if they don't really understand them.

Cooperative Enterprise Hub

The coalition government didn't fund cooperative development though. That was left to the retail society coops, first United NorWest's regional C Change program (2010ish) and then the Cooperative Group's national Cooperative Enterprise Hub from 2011 until their major crisis in 2013.

All of which meant there were few worker coops forming in the 90s (with amazing exceptions e.g. Unicorn Grocery) to replace those fading away after their first twenty years of life. Most small businesses have a fairly short life and few survive their founder. Coops as Virginie Perotin of Leeds University, shows in her research, do survive longer and more often but only statistically. Most still die fairly young (like other small businesses) - especially where they don't have someone to turn to for help when they have a crisis and/or have failed to do succession planning (the majority).

Upturn: Worker Cooperation Becomes Popular Again

The upturn in worker coops currently could be linked to the Hub program directly and indirectly. Hundreds of coops were set up and revitalised by the Hub.  My coop development network, CBC, alone had nearly 300 Hub clients (of all types of coops, worker coops tended to be in the minority). I personally 'saved' quite a few worker coops thanks to Hub funding where they were in a people fix and needed a third party to come in and help unblock the emotional logjams. Such jams kill coops and their businesses and worker coops are especially vulnerable to them,  having no boss to cut through the tangle.

The (no longer a cooperative) Coop Bank continues to fund The Hive a smaller support program than the Hub managed by Cooperatives UK. Coop development practitioners report a lot of demand for assistance by groups of, often young, people trying to set up collectively organised businesses, in order to make a living, the way 1970s youth responded to their economic recession.

Tech Coops; the New Wholefoods

I think the tech coops expansion is an example of a business idea whose time is now.   In the 70s it was a popular campaign for real food that created a demand and allowed young people to make a living from wholefoods - minimally processed foods. Today software development is the equivalent. 
And it's the same junk food/real food choice.  Software developers have a terrible reputation, do the project, take the money and run, even though it doesn't work.   The market is not only huge and expanding faster than supply can keep up, but the opportunity for more people friendly suppliers is also huge.  Learning to code is easy for those who have an aptitude for it and software development is a team activity. Individual workers must cooperate with their colleagues to get the whole development job right.  Outlandish, the leading UK tech coop,  famously converted from a privately owned partnership into a worker coop to increase their team working potential. 

The new Suma

Outlandish are undoubtedly the 'Suma' of this new network. But, significantly, they have cooperated with other coops from the start. They actively help other people form tech coops to take on some of the work that Outlandish lacks capacity for/no longer wants to do. They do the more complicated stuff now and pass on the simpler jobs to newer coops to gain experience. eg Outlandish are said to be opening a university coop where students will hone their skills before taking on better paid and more difficult work either in this coop or setting up their own. 

CoTech; the Network of Tech Coops

A self supporting ecosystem of tech coops is developing.  Just as once there was a self-supporting ecosystem of wholefood coops from importers and manufacturers to distributors to retailers and caterers.  It isn't a coincidence that one of the principal advisers to this new, 30 coop strong,  CoTech network is Principle 6. sadly the sixth principle faded and was lost from the wholefood coops movement early on and was replaced by competition.  Worker coops sank or swam by themselves, and most sank.

Cooperation between Cooperatives, the solution.

CECOP/CICOPA (the European ad Global worker coops federations) have always stressed the need for cooperation between coops and building horizontal networks for successful worker coop development. The evidence is compelling. Wherever worker coops cooperate in horizontal networks, Italy, Spain, Argentina, Japan, France, they prosper and (mostly) survive the ups and downs of national politics and economics. 
The loss of so many UK worker coops since 1980 (3000 and down to 400 today) is significantly due to their inability to use Principle 6 for mutual support. Why that was the case is the stuff of another essay.


  1. Very interesting, Bob. But there seem to be quite a lot of new co-ops and social enterprises opening in the food sector too. And I'm not so sure SEs are automatically undemocratic; they can express multi-stakeholder democracy.

  2. To be clear Principle Six is a worker coop dev partnership, and principle six is the sixth coop principle of cooperation among coops ... or is that even more mystifying

  3. Interesting, but its worth looking at Jess Baines research on Print Co-ops, who had a strong ethos of mutual support, but got outflanked by technological developments and the decline of print. At their height there were over 30 Print co-ops in London who informally worked together in great part because their workforce often moved from co-op to co-op.
    Also relevant is Jon Walkers application of the Viable Systems Model to the failed attempt to set up Federation of Wholefood Coops.
    One key element is that they nature of tech work can mean that the transaction costs of mutual working can be substantially reduced.

  4. Great article - thanks Bob. I'm hoping to meet other co-ops and a lot of the CoTech and Outlandish gang and others who are interested in making the sector stronger through greater adoption of principle 6 at the PLatform Co-op conference in July

  5. Excellent and very timely post. I completely agree about CoTech - the time has come.

    I also know you'll agree with this Bob: there is cooperation in theory and cooperation in practice.

    I hear a lot of talk about cooperation in theory and I also see some actual cooperative practice. The latter, for me, means developing enough self-knowledge and skill in communication that we can avoid getting in our own way and harming rather than building relationships.

    This is not easy - which is perhaps why people avoid it and would rather talk about cooperation in the abstract?

    Tech speeds up the process - but that can be making it fail faster or succeed faster. How communication takes place is most important - not the medium.

  6. Thanks for this Bob, it's a great article with lots of historical context alongside points that are still relevant today. It makes me think about what future co-op developers need to know in order to help start long standing co-ops.

    Just one thing, Outlandish are supporting (where relevant) UCLAN's commercial technical department in setting up their own worker co-op but it will be completely separate from us. Once it's up and running, it will of course be invited to join CoTech.

    Thanks again - I'll be a frequent reader of your blog from now on :)

    Kayleigh from Outlandish