Worker cooperatives are the least well-known part of the cooperative movement. Part of the reason is that the idea of a business run by its employees sounds unrealistic to many people. Yet there are thousands of worker cooperatives and related businesses around the world, including some very large firms. In the last two decades, the availability of extensive new data on worker cooperatives and other firms in several countries has made it possible to gain a more comprehensive
understanding of the incidence and patterns of behaviour of worker cooperatives. The picture of worker cooperatives that is emerging from the research findings based on these data suggest that worker cooperatives are more “normal” firms than is often believed. For example, they can be found in a wide range of industries and seem to be larger, on average, than other firms. Importantly, this body of international research also sheds new light on issues that have been at the heart of the research debate on labour-managed firms, such as the objectives pursued by the firms and their capacity for growth.
The paper examines the implications of the key international research findings of the last two decades for our understanding of why worker cooperatives are created, the objectives pursued by founding and subsequent members and the spill-over effects of their performance for the communities in which the firms are found. The paper argues that worker cooperatives, by providing institutions in which employees control most aspects of their job and firm strategy (including pay and employment trade-offs) internalise a number of externalities to the conventional operation of firms. They provide good, stable jobs in which employees’ potential and creativity can flourish. In addition to promoting economic democracy, worker cooperatives offer sustainable and local employment and are likely to have a number of positive effects on their communities’ economies, public finances and health.