Co-operating for Business Success in the Creative Industries

Diarmuid McDonnell Co-operative Education Trust Scotland

28/02/2013diarmuid@cets.coop

Outline

1. What is a co-operative?2. Are they relevant?3. Are they ethical?4. Are they useful? Why would I choose one?5. How would I set one up?6. What other ways can I get involved?7. Further resources8. Discussion Qs

Introduction

Despite the wide-ranging successes of co-operatives, in financial terms as well as in the development of sustainable communities, the study of these democratic forms of enterprise remains surprisingly absent from the curricula of most university business schools around the world.

The Invisible Giant

Co-ops defined

Co-operatives are businesses

• Member-owned• Democratically controlled• Distribute surplus to members

Purpose is not profit maximisation; they serve the needs of members. However, the do generate a surplus.

Members

Why become a member?

It’s about achieving self-interest in a collective manner

A group of individuals have a common need that is not being met

Types of co-op

Typical types:

1. Consumer

2. Producer

3. Worker

Sectors:

Finance

Insurance

Agriculture Retail

Housing Education

Creative

....and pretty much every other

you can think of!

Co-operatives globally (1)

Source: ‘Statistical Information on the Co-operative Movement’ ICA. http://www.ica.coop/coop/statistics.html, accessed 29 September 2011.

Co-operatives globally (2)

The UK co-operative sector (1)

Source: Co-operatives UK. The UK co-operative economy 2011: Britain’s return

to co-operation (Manchester: Co-operatives UK), 2011.

No. of co-operative businesses in the UK:

5,450

No. of members: 12.8m

Turnover of co-operatives: £32.2bn

No. of people employed by co-operatives:

236,000

The UK co-operative sector (2)

Source: Co-operatives UK. The UK co-operative economy 2011: Britain’s return to co-

operation (Manchester: Co-operatives UK), 2011. p. 23.

4352

473

386239

Number of co-operatives by country

EnglandScotlandWalesNorthern Ireland

The UK co-operative sector (3)

Source: Co-operatives UK. The UK co-operative economy 2011: Britain’s return to co-

operation (Manchester: Co-operatives UK), 2011. pp. 20-2.

2008 2009 2010

-4

-2

0

2

4

6

8

10

12

14

16

% Growth of the UK co-operative movement

Turnover Membership Co-operatives

Year

Growth %

Odd one oot!

Value-driven

Co-op ValuesSolidarityEquityEqualityDemocracySelf-helpSelf-responsibility

Ethical ValuesOpennessHonestySocial responsibilityCaring for others

BUT... Google, Tesco and Barclays have values as well...

Values in actionCo-op Principles

1. Voluntary and open membership2. Democratic member control3. Member economic participation4. Autonomy and independence5. Education, training and information6. Co-operation amongst co-operatives 7. Concern for community

All* co-ops subscribe to these principles – firm ethical foundation

Uses of co-op model

Share resources Share risk Share reward

KnowledgeBuildingsCapitalEquipment

InvestmentCostsTraining

New clientsWork-life balanceShare of a larger pie

Example: sharing a studio, IT equipment/software

Example: joint purchasing of raw materials, insurance policies

Example: joint marketing/bidding for contracts

Case study 1 - Bridges

Actor-owned and controlled agency providing casting and PR services.

Usually between 10-20 members at any one time.

Members pay the usual fee (12.5%) and volunteer some of their time - 3

days per month - to admin tasks. http://s.coop/1f3c3

Why choose co-ops?

Case study 2 – Openspace

Producer co-operative of self-employed professionals and small businesses.

Joint renting and management of office space – ‘co-working’

The space is used by a broad mix of people including: a digital marketing

consultant, a web designer, two freelance journalists, an author, a

writer/performer, a cartoonist, an illustrator.... http://s.coop/me3t

Setting up a co-op

1. Shared purpose and objectives2. Ownership structure3. Democratic governance4. Distribution of surplus5. Membership6. Capital requirements7. Legal structure

Case study 3 – graphics.coop

A worker co-operative of web and graphic design experts.

Operating for over 20 years, graphics.coop specifically targets the

third sector and ‘ethical’ businesses.

Set up by individuals fresh out of university.

http://s.coop/1f84u

ExampleBusiness idea: marketing services for local SMEs

Design elements In practice

Shared purpose and objectives To allow members to access larger contracts

Ownership structure Members will be the individual businesses and self-employed marketing professionals

Democratic governance Each member has one vote to elect the management committee

Distribution of surplus 65% retained in business, 25% to members, 10% to charitable donations

Membership The majority of members must be businesses/self-employed and the majority of businesses/self-employed must be workers

Capital requirements Not a capital-intensive business so no need for shares

Legal structure Company Limited by Guarantee

Case study 4 - Yellow Brick House Media

A producer co-operative (known as a consortium) of digital media professionals

and businesses.

New media content and marketing, television production, web development

and graphic design.

Each professional and business retain their own identity but jointly bid for

contracts.

http://s.coop/1f3dh

Get involved

In higher/further education:

• Join/set up a ‘vegbag’ scheme – http://s.coop/1f35f

• Need books or other services? – http://s.coop/1f35j

• Freshsight model – http://s.coop/1f35t

In the ‘real world’:

• Bank/save with a co-op – http://s.coop/8157; http://s.coop/1f36a

• Shop with a co-op – http://s.coop/1f36b; http://s.coop/1f36h

• Create your own employment – see any of the cases in this presentation!

Case study 5 - Freshsight

Student-run enterprise providing consultancy services to the third sector in

Edinburgh.

In the process of becoming a worker co-operative with help from CETS and Co-

operative Development Scotland.

The basic idea is replicable, if not in the same sector (uni students are a plentiful

and in demand resource...)

http://s.coop/1f35t

Conclusion

1. The Invisible Giant

2. Share resources, share risk, share rewards

3. Ethical

4. Democracy in action

5. Easy to get involved in

Key message

Further resources

Co-operative Entrepreneurship – an ebook and VLE aimed at students/graduates

containing information on how to set up a co-operative enterprise

http://cets.coop/moodle/course/view.php?id=4

Start a co-operative – an online resource by the UK’s trade body for co-operatives

http://www.uk.coop/start-co-op

Join the Co-op Future – a 4 minute film that offers a snapshot of the co-operative sector

in Scotland

http://vimeo.com/43665118

Further resources (2)

Creative Co-operatives – a dedicated guide to the creative co-operative sector

http://s.coop/1f83y

Co-operative Development Scotland – free and expert advice on a variety of co-

operative models

http://s.coop/vft6

Discussion Qs

1. If everything I’ve said is true and so great, why are there not

more co-ops?

2. Are there any areas of your life (as a student or in general)

where setting up a co-op could make things much better?

3. Why is democracy not widespread in corporations, but is

nonetheless something we strive for in society (and for

which people in some countries sacrifice their life)?