Co-operating for Business Success in the Creative Industries Diarmuid McDonnell Co-operative Education Trust Scotland 28/02/2013

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 resources 8.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: FinanceInsurance AgricultureRetail 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. 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), 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), p. 23.

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), pp

Odd one oot!

Value-driven Co-op Values Solidarity Equity Equality Democracy Self-help Self-responsibility Ethical Values Openness Honesty Social responsibility Caring for others BUT... Google, Tesco and Barclays have values as well...

Values in action Co-op Principles 1.Voluntary and open membership 2.Democratic member control 3.Member economic participation 4.Autonomy and independence 5.Education, training and information 6.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 resourcesShare riskShare reward Knowledge Buildings Capital Equipment Investment Costs Training New clients Work-life balance Share 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 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.

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

Setting up a co-op 1.Shared purpose and objectives 2.Ownership structure 3.Democratic governance 4.Distribution of surplus 5.Membership 6.Capital requirements 7.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.

Example Business idea: marketing services for local SMEs Design elementsIn practice Shared purpose and objectivesTo allow members to access larger contracts Ownership structureMembers will be the individual businesses and self- employed marketing professionals Democratic governanceEach member has one vote to elect the management committee Distribution of surplus65% retained in business, 25% to members, 10% to charitable donations MembershipThe majority of members must be businesses/self- employed and the majority of businesses/self- employed must be workers Capital requirementsNot a capital-intensive business so no need for shares Legal structureCompany 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.

Get involved In higher/further education: Join/set up a ‘vegbag’ scheme – Need books or other services? – Freshsight model – In the ‘real world’: Bank/save with a co-op – Shop with a co-op – 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...)

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 Start a co-operative – an online resource by the UK’s trade body for co-operatives Join the Co-op Future – a 4 minute film that offers a snapshot of the co-operative sector in Scotland

Further resources (2) Creative Co-operatives – a dedicated guide to the creative co-operative sector Co-operative Development Scotland – free and expert advice on a variety of co- operative models

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)?