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A new approach to local economic development has never been more urgent, as poverty concentrates and inequality rises in cities across the United States[i]. A new approach has also never been more possible. Faced with a widening racial wealth gap, unprecedented displacement of people of color from urban cores, and deadlocked federal and state governments, cities across the country are flexing their local muscle to solve big problems. They are innovating. They are prioritizing strong local economies. Various public and private sector actors are working together to maximize broad-based community benefit in real and sustainable ways.

 

The Cooperative Growth Ecosystem framework encourages diverse stakeholders in the field of community economic development to invest in inclusive economic development by fostering cooperatively owned enterprises within a broader entrepreneurial ecosystem. It encourages organizations investing in worker cooperative development to push their conception of “cooperative business development” beyond basic supports for shared entrepreneurship to more coordinated, high-investment incubation and conversion models. It reframes quality jobs as well-paid jobs with ownership opportunities and envisions an ecosystem that can be leveraged to support viable worker-owned enterprises.

 

We started with the following questions:

– What are the key elements of an entrepreneurial ecosystem that supports sustainable growth of cooperative enterprises and their ability to create quality jobs and assets for low-wage workers?

 

– How do different elements in an ecosystem interact with each other to support pathways to scale—whether through startups, acceleration, or conversion of conventional businesses to cooperative ownership?

 

– Who are the actors in an ecosystem and how can they leverage existing resources and culture to develop and support those elements that are most critical for scale?

 

– Are there common stages of development for a Cooperative Growth Ecosystem?

 

– In active ecosystems like the five we studied, how can actors collaborate for next-stage growth?

 

– In communities where no worker cooperatives or co-op developers exist today, what is the best place to start?

In other words, how can all the actors in a place work together strategically to turn the demand for worker cooperatives into the supply of what is needed to create them?

 

Beginning to answer these questions—and using the answers to develop strategic action plans—will position those investing time, resources, and political capital in developing worker cooperatives for success. We believe that ecosystem thinking and well-informed collaboration can make the difference between creating a few worker cooperatives and building an ecosystem in which worker coops create good jobs and real wealth for large numbers of people who are today working poor, underemployed and unemployed.

What are
Worker Cooperatives?

Worker cooperatives are values-driven businesses that put worker and community benefit at the core of their purpose. The members of the cooperative are the people who work in it. These typically small and medium-sized businesses can be found in every sector and industry, from engineering and manufacturing to retail to service. Workers participate in the profits, oversight, and, to varying degrees, the management of the organization, using democratic practices. Workers own the majority of the equity in the business and control the voting shares.

The Inclusive City Series

Through three groundbreaking reports Funded by Citi Community Development Building the Inclusive Economy series sets out new, cutting-edge economic development models for city leaders and community development practitioners interested in embedding equity, community wealth and sustainability into their local economic growth plan. This series, authored by The Democracy Collaborative, The Democracy at Work Institute and Project Equity, lays out key tools and building blocks for equitable local economic growth where all residents are able to maximize opportunities, thereby expanding urban economies where all can meaningfully participate and benefit.

Authors

The Cooperative Growth Ecosystem project is a joint production of the Democracy at Work Institute and Project Equity. Hilary Abell and Alison Lingane of Project Equity, Melissa Hoover and Tim Palmer of the Democracy at Work Institute, and consultant Tim Lohrentz comprised the team that developed the Cooperative Growth Ecosystem framework; piloted it as an analytical and strategy tool looking at five regions around the country; hosted a national convening on the topic to get feedback and provide space for regions to develop actions plans; and developed a robust report to share with the field. Engagement with partners in the San Francisco Bay Area, New York City, Cincinnati, Madison, and Western North Carolina played a vital role in the process.

 

Both the Democracy at Work Institute and Project Equity are available to support regional groups in applying the ecosystem framework in their communities.  

 

The Democracy at Work Institute works at the national level to expand the promise of worker ownership to communities most affected by economic and social inequality, and to ensure that future growth in the field is adequately supported and strategically directed.

 

Project Equity, based in the San Francisco Bay Area, fosters economic resiliency in low-income communities by demonstrating and replicating strategies that increase worker ownership.

 

Thank you to the Surdna Foundation for additional funding for this work.

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[1] http://www.citylab.com/housing/2015/08/americas-biggest-problem-is-concentrated-poverty-not-inequality/400892/