Does size matter?

On top of the advantages of the co-operative model itself, it's clear that a significantly larger co-operative sector can 'ripple out', helping to transform the economy as a whole.

Communications & Digital Officer


Today the think tank the New Economics Foundation (NEF) launches a new report on doubling the size of the co-operative sector, titled ‘Co-operatives Unleashed‘.

As we announced back in April, the Co-operative Party commissioned this independent piece of work from the NEF because we want to see a step-change in the co-operative sector. While consumer and employee owned businesses here in the UK are still seen as a little unusual, edgy or even ‘alternative’, in countries like France, New Zealand and the Netherlands, co-operative businesses make up a significant percentage of the economy, and are considered part of the mainstream business landscape.

So today’s report, containing practical steps policymakers can take to double the size of the co-operative sector, is undoubtedly great news for UK co-operatives, and for our co-operative movement.

But why should those outside of the UK co-operative sector care about how big it is?

Amongst co-operators, you’ll often hear about the ‘Rochdale Pioneers’, who founded the world’s first successful modern co-operative. There is one lesson from that story that is worth remembering, and which came up repeatedly in the Party’s Centenary celebrations last year:

In creating the world’s first successful co-operative, the ambition of those Pioneers went far beyond selling quality goods at prices ordinary people could afford through a network of shops. For them – many themselves veteran activists and radicals – that first shopfront was about creating, and demonstrating, a different model of how businesses could be run.

It was an experiment that dared to challenge the conventions and upset the power dynamic of Victorian Britain, seeking to catalyse wider change in the economy and society of the time.

Seen in that light, today’s report should be understood not only in terms of increasing the number of co-operatives in the UK and their proportion to the rest of the economy, but also for that co-operative expansion to act as a catalyst for even further-reaching changes in how our economy is run.

You’ll read a lot on this blog and elsewhere about the fact that Britain’s economic model isn’t just unfair, it’s also broken. Growth is sluggish, wages have fallen in real terms, and productivity lags behind other countries.

Co-operatives have obvious advantages in meeting these challenges, as the report makes clear. For example, we know that businesses which are at least partially employee-owned tend to be more productive, while co-operatives as a whole are more resilient in times of downturn. In these respects, a substantial expansion of the sector is an inherently good thing

But on top of the advantages of the co-operative model itself, it’s clear that the impact of a significantly larger co-operative sector can ‘ripple out’, helping to transform the economy as a whole.

Many of the challenges we face are symptoms of an economy where a single form of business – the shareholder-owned PLC – has come to be seen as the ‘default’ business form in regulation and law, while simultaneously, a diminishing number of players abuse dominant positions in key markets such as energy and water.

That’s not the norm in other countries, where a variety of forms of business and models of ownership, including co-operatives, mutuals, the public sector and other social enterprises help to create competitive, dynamic economies that work for both employees and consumers.

As our General Secretary, Claire McCarthy wrote today, “Today’s report fires the starting gun on an exciting, and desperately needed, transformation of our economy.”

So the size of the co-operative economy matters a lot –  not just for co-operatives, but for anyone who cares about fixing the UK’s broken economic model.