New production and worker cooperatives and the employee buyout phenomenon

Research Area: Innovative models
Scientific coordinator: Marcelo Vieta
Project Manager: Sara Depedri

Project status: Concluded

Description

Following many company crises and the high (and growing) rates of youth unemployment, particularly among graduates, there has recently been a renewed interest in cooperation among workers. In particular, workers buyout, which occur when workers acquire ownership and control of a company,  are an innovative way through which employees can try to save companies facing closure, keeping their jobs and ensuring that the know-how acquired over years of employment is not wasted. The transformation of ordinary companies into cooperatives is increasingly relevant today, and monitoring this trend was the aim of this project. Specifically, the research project aimed to assess the relevance of workers‘ buy-outs in Italy and to study their evolution in terms of number, history, efficiency and effectiveness, in order to also understand the sustainability and resilience of these organizations and the levers that ensured their success.

The research project had the support of CFI (Cooperazione Finanza Impresa). This institute, whose members include the Italian Ministry for Economic Development, supports and funds investment in production and worker cooperatives.

Objectives

The focus of the study was the analysis of the recent evolution of cooperatives started by workers of pre-existing companies in crisis, also known as “worker-recuperated enterprises”. Given the need to provide a theoretical framework to the study and to evaluate the relevant legal areas, one of the research study’s initial objectives was to provide an introduction to the context and look at the historic evolution of the phenomenon. In addition, the empirical analysis examined the phenomenon of worker buyouts in terms of numbers, looking at the number of cooperatives created, their economic size and their resilience, i.e. the success rates of the new organizations. This allowed an exploration of the relevance of the phenomenon not only as a new response to the risks of unemployment and company closure, but also as an efficient and long-term solution. Finally the project helped understand the conversion processes and what it means to be a “recuperated” worker cooperative in terms of governance, management and challenges.

Main results

The investigation into recuperated worker cooperatives has led to important theoretical reflections on the relevance of these organizations and the legal and socio-economic context that has supported their emergence and evolution. While the collaboration with CFI made it possible to monitor worker cooperatives that had requested funding for buyouts, it is also true (as shown by supplementary sources) that there are many other recuperated worker cooperatives that did not obtain funding and which are therefore not officially recorded in any register as being recuperated enterprises. Integrating different data sources made it possible to create an initial, albeit probably still incomplete, map of this phenomenon, and to evaluate the economic and financial situation of these organizations and their resilience. It was then possible to confirm the very recent emergence of many new recuperated worker cooperatives that are responding to the economic crisis  and that have long-term survival rates close to 50%. These organizations were found all over Italy and in many different sectors.

The administration of questionnaires and the collection of data from 25 worker cooperatives helped explore participatory governance mechanisms,  innovation capacity, workers’ motivations and  management policies. To supplement the questionnaires, in-depth interviews were conducted with some representative worker cooperatives in order to better investigate the conversion process and their most recent evolutions.

Publications

Vieta, M, Depedri, S., & Carrano, A. (2017). The Italian road to recuperating enterprises and the Legge Marcora workers’ buyouts: A report on Italian imprese recuperate in times of crisis, Euricse Research reports n.15, Trento, Italy: European Research Institute on Cooperative and Social Enterprises.

Depedri S e Vieta M. (2015) “Le imprese recuperate in Italia”, Terzo rapporto Euricse “Economia cooperativa. Rilevanza, evoluzione e nuove frontiere della cooperazione italiana”.

Vieta, M. (2015). The Italian road to creating worker cooperatives from workers’ buyouts: The emergence of Italy’s worker-recuperated enterprises and the Legge Marcora framework. SSRN and Euricse Working Papers, 78/15. Trento, Italy: European Research Institute on Cooperative and Social Enterprises.

Vieta, M. (2013). The emergence of the empresas recuperadas por sus trabajadores: A political economic and sociological appraisal of two decades of self-management in Argentina. SSRN and Euricse Working Paper 55/13. Trento, Italy: European Research Institute on Cooperative and Social Enterprises.

Vieta, M. & Lionais, D. (Eds.). (2015). Editorial: The cooperative advantage for community development (special issue). Journal of Entrepreneurial and Organizational Diversity, 4(1), 1-10.

Vieta, M. (2015). Autogestión: Prefiguring the “new cooperativism” and “the labour commons.” In DuRand, C. & Stone, B. (Eds.), Moving beyond capitalism. Winnipeg / Farnham, UK : Fernwood / Ashgate (in press).

 

This project is part of the line of research into New cooperative forms and new roles for cooperation in the Italian and international context.

Over the years, cooperative and social enterprises have taken on different roles and forms, and interest in the potential of these entrepreneurial forms is increasing, especially in regards to certain sectors (such as social services and general interest) and the ability to tackle employment problems and competitiveness in SMEs in particular.

These new forms of enterprise are, however, often defined in an approximate way, partly due to a lack of specific regulation. The development of research aimed at understanding emerging cooperative and social entrepreneurship forms is therefore of particular relevance.

The other research projects carried out by Euricse, in reference primarily to the Italian and European context, are:

Social and community enterprises and cooperatives
New evolutions and regulation of worker cooperatives;
The evolution of the role of agricultural cooperatives

Partner

University of Trento

University of Toronto

CFI

Confcooperative Italia

Centro Studi Lega Coop Bologna

International Study Group on Utility Cooperatives