Columbia Institute Centre for Civic Governance Harrison Hot Springs March 26, 2010

Co-operation and Regional Economic Development In BC, and Canada generally, the dominant model for regional economic development has been focused on the individual firm seen as an isolated entity, and as in strict competition with other firms. Rarely has there been an approach focusing on regions as economic agents, or local governments as catalysts and co- ordinators of regional economic development. Co-operation among firms, and the co-operative as a form of enterprise democratically owned and controlled by its members, have been absent as strategic tools for development.

Co-operation and Regional Economic Development Over the last 20 years, there has been a growing recognition of the crucial role of geographic regions as economic agents, and their importance in fostering both the success of individual firms, and of strategic sectors that can compete in a global marketplace. The role of regional and local governments is key in this strategy as is the use of co-operative models of development. Key examples of this approach include Emilia Romagna in northern Italy, the Ruhr region of Germany, and the cluster economies of Seattle, Silicon Valley, and in the U.S.

Some Facts: Survival rate of co-ops Co-ops have a higher survival rate than other forms of enterprise Over 5 years, co-ops have a 64% survival rate; only 36% of private firms survive; Over 10 years, co-ops have a 46% survival rate; only 20% of private firms survive; Co-op Survival rate by sector Consumer co-ops (5 yr: 82%, 10 yr: 66%) Producer co-ops (5 yr: 77%, 10 yr: 58%) Worker co-ops (5 yr: 44%, 10 yr: 26%)

Co-ops and the Rural Economy Worker Co-ops Worker Co-ops can play three key roles in a rural economy: Addressing the problem of succession in small firms; Addressing plant closures; Creating new enterprises.

Co-ops and the Rural Economy Worker Co-ops Lack of succession for small firms is one of the primary sources of enterprise and job loss. Worker co-ops can serve as a key strategy for ensuring the survival of small firms by transferring succession to employees. There are numerous models for establishing a worker co-op as a succession strategy. These include an outright worker buyout; a partnership between workers and other partners; or a staged process involving existing managers/owners. Resources are available: for training; planning; financing; incorporation.

Co-ops and the Rural Economy Worker Co-ops Plant Closures Worker co-ops can serve as a means for protecting against plant closures; Often, plant closures have little to do with the viability of a plant – they may be due to insufficient capital return to shareholders; to competing corporate and regional interests (e.g. outsourcing to lower cost regions); etc. Current examples: Eurocan Pulp and Paper Mill (Kitimat); Harmac pulp mill;

Co-ops and the Rural Economy Social and Community Service Co-ops Social Co-ops are emerging as a key response to the decline in social services. Key sectors where social co-ops are beginning to play a role: – Health care – Elder care – Funeral care – Community services (family services, shared services, training/employment for marginalized groups)

Co-ops and the Rural Economy Social and Community Service Co-ops A social co-op is a co-op that provides social care not only to members, but to the broader community. Characteristics: Service users are members and have control rights; Multiple stakeholders (caregivers, users, community members); Often more innovative, cost effective, than traditional models.

Co-ops and the Rural Economy Social and Community Service Co-ops Social co-ops are often more innovative, and cost effective, than traditional models. Why? a)User involvement in service design and delivery; b)Use of Volunteers; c)Control of special interest costs (private profit; bureaucracy; labour). d)Job control/satisfaction.

Discussion and… Thanks