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Report of Bologna Tour 2019

Professor Stefano Zamagni, University of Bologna

Article by Chris Nichols, co-founder of Wood Shop Worker Coop 

From May 26 to June 7, 2019, I had the immense privilege of attending a Vancity-sponsored tour of the Emilia-Romagna region of northern Italy. Vancity, as a financial-services cooperative – or credit union as it is more commonly called – has been organizing this tour since 2003. It brings groups of its executive leadership and local community partners to Italy to learn from the cooperatives in this area, providing education and inspiration and a way for Vancity to embrace its cooperative foundation. It is a two-week immersive experience that will make you a coop enthusiast for life. 

In many ways, Emilia-Romagna is a world leader in the strength, density, and cultural resonance of its cooperative sector. One in seven people in this region work in a cooperative, and, in being there, one is struck by how coops of all types are a central feature in peoples’ lives. This particular trip was organized to emphasize worker coops, and, having been a co-founder of a worker coop in Vancouver and local promoter of this sector, I was invited to join. Adding context and practices from home, invited community members are a sounding board for how the cooperative sector in Vancouver can be seen vis- à-vis the Emilia-Romagna region. The following report is an effort in this regard, summarizing the main themes and commenting on the many relevant details I gleaned from visiting worker cooperatives of varying sizes, as well as other types of coops, umbrella organizations, academics and supporting agencies. 

This report is more impressionistic than summative. I don’t intend to provide a recap per se, but rather a reflection on my impressions and takeaways based on what I perceive to be of interest to our local coop sector more generally, as well as worker coops in Canada. I also mention challenges and debates that were evident within Emilia-Romagna organizations and how these were addressed to varying levels of satisfaction. Hopefully this engages readers, invites discussion and inspires interested parties to learn more. 

Our group was based in Bologna, the capital of Emilia Romagna, from which we traveled to many organizations by foot, train and bus. The tour began in the city itself with lectures from prominent academics in the field of cooperative economics and history. Professors Stefano Zamagni, Vieri Negri Zamagni, and Flavio Delbono provided context and theory in order to frame discussions and identify themes of the sector and region. In later tours and presentations, Stefano Zamagni in particular was brought up time and again as a lynchpin in the movement, offering advice to Emilia-Romagna coop leaders and linking organizations in the sector through a common language and understanding. Clearly these academics had a close working relationship with the cooperative sector and served to instruct and lead its efforts. 

Several insights stand out from these initial academic discussions. There is clear acknowledgement that the Emilia-Romagna coop sector is influenced by larger social, political and economic forces. Rising inequality and forces of automation and consolidation in certain sectors were continually referenced. Coops were presented as positive social forces that could mitigate against these trends. From a macro-economic perspective, Flavio argued that cooperatives fostered social cohesion by both creating wealth and mitigating inequality. Equality without wealth means we all are suffering equally; wealth without equality means that wellbeing in society suffers. Vieri provided important context for the rise of coops in the region, including the establishment of funds and policies that promoted cooperative resilience. It was mentioned here and in other talks that Emilia-Romagna was one of the poorest regions in Europe at the turn of the 19th century and now was one of the richest, with wealth well distributed and small-scale organizations thriving. Coops were cited as a major reason for this remarkable turn-around. 

Perhaps the insight with the greatest resonance for our trip was given by Stephano Zamagni. Borrowing a metaphor from Plato, he argued that coops are like a plow pulled by two horses that must be in balance. The first horse is that of organizational efficiency and the second of cooperative ethics, meaning both buy-in from workers on coop principles and practice, as well as a commitment to advancing the movement more generally. Without even pulling from both horses, the furrow would be bent and a coop would suffer from its erratic path. With one facet outpacing or lagging behind the other, the coop is unbalanced and in need of correction. A coop needs to innovate and run efficiently, but it must also be attentive to its principles. It was stirring to see how often during our tours this metaphor was referenced and applied as we learned of the struggles and triumphs of the coops we visited. 

And thus the tone was set for our tours, presaging a dynamic and ever-changing sector that would require managers and members willing to innovate while remaining committed to the foundational values of cooperative organization. For the next 10 days, we had the privilege of seeing this dynamism up close, catching a glimpse into the working of the coops that comprised the local sector. These varied from a 7-member consultancy worker coop managing a co-working restaurant and mixed-use facility, to a 9000-member multi-national catering coop. We toured a tile-making worker coop over 150 years old and a maintenance coop whose original founder was still the CEO. Member share buy-ins ranged from 800 to 70,000 Euros. Industries varied from manufacturing to agriculture to book binding. It was clear that these coops were unique, autonomous and instructive in numerous ways to the cooperative sectors in various stages of growth at home. As was discussed in our trip orientation, ‘if you’ve met one coop, you’ve met one coop’. 

Given the range of businesses, it’s from the tours themselves I have drawn out several themes that have relevance to the cooperative sector in Vancouver and worker coops specifically. These include a reflection on the systems of legal, organizational and cultural supports in place that make this sector thrive, as well as relevant insights into the operations of the coops themselves and how these relate to my personal experience in a worker coop. 

Clearly, there are many supports that exist in the Emilia-Romagna region and Italy more generally that help to grow and sustain the cooperative sector. One primary source of support is Coopfond, an organization we visited on our fourth day. Owned by one of the three coop umbrella organizations, Legacoop, this 450 million Euro fund is responsible for supporting coops at all stages, from start-up to expansion, through providing financing and technical support. 

The money that supports this fund comes from two main sources, both of which point to a legal framework that promotes coops. The first stems from a mandated 3% share of profits of all coops in Italy, a law that was introduced in 1992 after extensive lobbying by the sector itself. This is a recurrent theme amongst many support systems – they were not ‘top-down’ initiatives by the government but rather ‘bottom-up’ suggestions from the sector. Once organizations within the sector identified specific policies they favored, they lobbied government actors to implement these plans. 

The second funding source is from dissolving coops that are mandated to contribute equity to an indivisible reserve. The presence of an indivisible reserve – a pool of money that can be used to finance coops but cannot be distributed to members of these coops either through liquidation or dividends – is a very compelling source of strength of this sector. Further, there are tax breaks for contributing to this fund instead of sharing profits with members on a yearly basis. All this contributes to a massive fund that ensured the health of the sector. The sharing of 3% of profits was described by thriving coops as “insurance” against an unforeseen downturn, all while facilitating the growth of new coops. 

There are also a few things to note about how coops are supported during their start-up phases. In some cases, Coopfond will provide patient capital up to 150 000 Euros that doesn’t require personal guarantees. Further, other more conventional financing is evaluated differently than how a bank would consider an application. There are even possibilities for interest rates to change based on meeting social impact goals. These novel ways of approaching finance can be instructive as to how they enable a low- barrier entry into cooperative organizations. 

Another interesting fact about Coopfond is how it sees itself as actively directing the sector based on perceived trends and necessary interventions. In this way, it serves as the rudder of the coop movement, channeling funds and efforts to bolster flagging sectors while redistributing resources from areas of strength. In this, Coopfond is an expression of what was dubbed ‘external mutuality’, or the practice of Cooperative principle number six, cooperation among cooperatives. Rather than being an aspirational goal, however, this is a firm example of an infrastructure and funding mechanism put in place to have some teeth behind it, a principle in action that produces real results. 

We visited many coops where the influence of Coopfond was evident, but perhaps none as much as Centro Moda Polesano, an all-female worker coop making garments for the high fashion industry. In 2017, this coop was facing financial difficulty and, through the support of Coopfond, underwent a worker buyout wherein 22 workers became the new worker-owners of the business. As another example of a regulatory system enabling this process, workers were able to redirect the funds they would have received through unemployment insurance into the member share investments they needed to buy out the company. Clearly, this is an innovative way for state-funded social services to ensure people remain employed and in their skilled fields of work. 

Examples of innovation extend beyond regulatory structures, including many within the organizations themselves. Perhaps the most compelling was seen in the agricultural coop we toured. Cooperative Agricole Braccienti (CAB), a coop of seven different worker coops in the agriculture sector, has been in existence in various iterations since the 19th century. As such, its worker coops have needed to innovate at different points in time due to social and economic change. For example, we learned how these coops had developed agritourism services and value-add products to ensure their long-term viability. An inspiring and recent innovation was the development of a biofuel power plant, which we toured on a piece of nondescript land with a cow barn and a tank for decomposing harvested corn – both of which provided the fuel for the power plant that had proven to be a vital source of revenue for the coop. All this was made possible by a Europe-wide subsidized rate for electricity produced through biofuel, as well as land worked by owners who could not sell land that was held as an asset by the coop. 

How a marriage of innovation, appetite for risk, regulatory structures and indivisible assets gave rise to such a success can inspire such efforts in BC, especially those working toward the formation of community land trusts on which farms can operate. Land is key, but the combination of innovation, regulation and worker-ownership makes such a dynamic economic system possible. 

The examples above illustrate how coops were willing and able to take great risks to innovate and stay competitive. The managers of the Massari coop – one of the 7 under CAB – spoke with great pride that, despite the pressures on the agricultural industry, they had 100 worker owners in an operational system that under a different structure would employ a small fraction of this number. In this way, innovation served the twin aims of efficiency and cooperative ethics, as Stephano’s plow analogy said it must. 

The theme of pride in how coops dealt with adversity was conveyed time and again. One of the more stirring examples of this featured prominently in the Ceramics worker coop we toured in Imola, a town known for being the heart of the cooperative sector in Emilia Romagna. Currently, this coop has a yearly turnover of 221 million Euros and employs 1150 people, 150 of whom are worker-owners. However, in our tour, its current president focused not on success, but on the struggles endured by the coop in the wake of the 2008 financial crisis. Amazingly, after the organization saw a 30% reduction in sales in a short period of time, the members of this coop decided collectively to keep every worker employed, agreeing to wage and hour reductions across the board. The president spoke with pride of how they had dealt with this crisis against the advice of many outside parties. They were autonomous and made their own decision on how to proceed, and now, ten years later, had righted the ship. 

Despite the supports that were in place in this region, there were many challenges mentioned by the organizations we toured. Coops, although resilient in the face of economic challenges, are not immune to market trends. Despite having survived the financial crisis, the Imola ceramics coop had contracted over time, as had the Massari coop and many others. Conversely, there were compelling examples of newer worker coops who were navigating the current economic trends positively, including General Coop, which was founded in the wake of the crisis, and Kilowatt, which had successfully bid for an unused municipal park building in Bologna and had turned it into a vibrant and dynamic space. Taken as a whole, the cooperative sector had displayed resilience in managing crises, and there were examples of workers from struggling coops finding work in those that were thriving. 

One issue that arose in several cases was the challenge of having worker coops in low-margin, low wage and part-time employment fields. CAMST worker coop, a large, multi-national catering coop with 9000 worker-owners, is in direct competition with corporations with deep pockets and no mandated emphasis on high-quality employment. The nature of the catering business is such that many workers are employed only part-time, as a major part of the business involves catering for lunch service. Further, the wages paid to workers are low in this field of work. Some ways CAMST seeks to address these challenges included giving opportunities to its workers to buy food at cost from the coop – a form of consumer coop interior to the worker coop – as well as having investment opportunities and maintaining a low member buy-in threshold. Our tour of CAMST also involved talks on the innovations that would make the organization more competitive, including the development of apps and other services that didn’t have increased employment quality as a clear outcome. There is clearly a fine line to walk: the organization exists to provide meaningful employment to its workers, but some innovations were clearly intended to make the coop more competitive vis-à-vis its rivals. In a low margin, low wage sector, the plow becomes extremely sensitive to the imbalanced pull of the horses, and managers of such a large coop face a tough task. Pushing for technological innovations while attempting to provide work for struggling part-time worker-owners requires striking a delicate balance.

Another coop we toured that provides services in a comparable field was General Coop, a 60-member worker coop that provides maintenance and janitorial services. This organization has chosen to situate itself as a premium service in the sector, emphasizing high-quality work and customer engagement rather than being the lowest cost option for clients. In this, it has leveraged its ability for its workers to be excellent spokespeople of the business. As the CEO explained, it was far more likely that a worker-owner would stay late or do a bit extra for a client than an employee because the worker-owner had a stake in the organization’s success. This came from a continual emphasis on fostering the culture of the coop, something admittedly much more difficult at the 9000-member level. Nevertheless, General Coop was structured vertically and it was stressed that on a day-to-day basis there were clear lines of authority and an emphasis on efficiency. Contrast this to the more horizontal organization of Kilowatt, which was much smaller and was comprised of highly educated consultants operating a space in an affluent area of the city. Clearly the sector in which the coop operates influences the type of organization and the balance that must be struck. Kilowatt runs a delicious restaurant with produce from its own land, selling at premium prices to a relatively wealthy clientele. General and CAMST provide services in lower margin fields but nonetheless feature ‘premium’ services to differing degrees and leverage worker loyalty to be competitive. As with all the tours, these tensions were discussed with an admirable degree of openness and honesty. 

The notion of dividends, or a portion of yearly profits paid to members, is an interesting one in the Emilia-Romagna locale. For context, Flavio mentioned that typically stock companies distributed an average of 80% of profits to shareholders, while comparable coops distributed, on average, 5%. Further, a number of coops we spoke to didn’t pay dividends to members at all, only using profits to strengthen the coop itself, enabled through the regulatory system to receive tax breaks for this investment. Some, such as Cooperative Ceramica, thought it important to issue dividends based on a recognition of the financial and emotional investment made by its members, particularly when it struggled in the wake of the 2008 financial crisis. The counterpoint to the paying of dividends was that it reflected a certain inefficiency of a worker coop. If dividends were being paid then salaries should be raised or more jobs should be created rather than having a payout to members. This was stressed at Deco Industrie, a worker coop in the field of food manufacturing and home and personal care products. All profits in this coop were reinvested in the business and workers were paid industry-standard wages in a relatively embattled sector. However, at other times the idea of recognition or reward was offered as an argument in favour of dividends. In the case of low-wage fields this seems like an important consideration, but clearly the stronger the coop the better chance for stable, long-term employment for the members. It is a fascinating problem on which to reflect. 

Despite these challenges, or perhaps because of them, our tours were overwhelming in the generosity shown by our hosts and the openness with which their struggles were discussed. Every challenge was unique and approached differently by each organization. Every tour was inspiring, but the coop that stands out in this regard is the only Social “B” coop we visited, named Cooperativa Sociale Giovani Rilegatori. The model of a Social “B” coop in Italy provides a way for the worker coop structure to be applied to disadvantaged groups, and this coop engaged in activities such as book-binding, digital printing and archiving in order to provide meaningful employment to workers with and without identified challenges to employment. Working side-by-side, these individuals from diverse backgrounds have contributed to a space permeated with respect, autonomy and the dignity of work. The emphasis on the provision of employment rather than services to disadvantaged groups forced the coop to always be innovating to be self-sustaining –pulling both horses for an even plow. Further, having everyone as not just a worker but an owner produced a space where there were not ‘givers’ and ‘receivers’ but only workers. Touring this coop crystalized what it means to have a “right to work” and galvanized my commitment to the worker coop model for everyone. This is what meaningful employment for all looks like, and the feeling of this space will linger as a reminder of its importance. 

Our two-week tour ended as it had begun, returning to touch base with the academics who had framed our interpretations of the site visits and stories that had been shared. There was much talk of how to bring what we had learned back home, a conversation to which this report hopes to contribute. Our final session with Flavio helped point towards the steps necessary beyond simply directing one’s will toward creating more coops. His research had indicated that coops thrive in circumstances when an imbalance in the market exists, something capitalism will always produce, and groups of people have a) resources to enable an organization’s growth and b) a common set of values and beliefs. 

Certainly, the notion of adequate resources resonates. If worker coops are to grow in capital-intensive sectors in particular then they will need resources and the potential for assets to be held in indivisible reserves has great potential to facilitate this growth in a sustainable way. Holding assets in indivisible reserves ensures that, despite the ups and downs of specific coops, the cooperative sector can continue to grow and provide the resources necessary to new coops in the future. 

The idea of common values and beliefs is far more of a nebulous concept. It is easy to say that there are many shared beliefs in our society and among groups of people, but it must also be noted that there are commonly held values in our culture that work against cooperative concerns as well, among them individualism, elitism and a brand of entrepreneurship that valorizes the high risk – high reward ethos of venture capitalism. These values are widely held and can undermine cooperative projects, especially if you factor in the resources that pour into those projects led by people who share these beliefs. To ignore the individualization of success would be to ignore a cultural belief that may prevent individuals from creating and joining worker cooperatives. 

However, there are indeed many commonly held values around which cooperatives can coalesce, including care for communities, human needs and the environment, not to mention a desire for meaningful employment. Further, as we can see with conversations around the Green New Deal and other efforts, there is a growing consensus that social and environmental problems are also economic problems. The ability for the cooperative sector to enter into these conversations to provide a model through which to express these values is vital to its growth, and the examples in Emilia Romagna can be important aspirational examples. Further, the analogy of the plow can be used to bridge the gap between those who see themselves as ‘innovators’ and those more activated around ‘ethics’. What is essential is for these two processes to be working in tandem. 

The potential for Indigenous communities in particular relates to Flavio’s insights, as there are resources being rightly allocated and appropriated by many Indigenous communities today, including land, infrastructure and assets held in common. These communities often have shared resources, culture and language around which to coalesce, not to mention a historical and contemporary emphasis on the Seventh Generation Principle and concern for the environment and living in common. The formation of cooperatives may be a means of self-governing economic development that aligns with shared principles, though clearly there is equally much that the cooperative sector itself can learn from indigenous forms of economic organization, as well as work it must do to be inclusive along lines of race and gender in particular. I point toward this possibility as grounds for future exploration and would be excited to see what would come of this. 

Relatedly, perhaps what is exemplified by the Emilia-Romagna model is how the term “culture” is woefully inadequate to describe the complex social, political and economic relations embedded in the region that would both support and reflect the cooperative sector. It is not merely shared values or robust institutions. This means that the Emilia-Romagna examples would not translate perfectly to local communities or BC in general. Nor should they. However, the question remains as to what can be used to fertilize the efforts being made here and in other local contexts. One common aspect of the coops we toured is intriguing in this regard. Throughout the spaces we visited and the people we encountered, the stories that were shared were relayed with a striking degree of matter-of-factness, an austerity that belied deep commitments. Perhaps the best example of this was the Social “B” worker coop we toured that left such a resonant impression. Here the CEO of this organization didn’t speak so much with passion as with stubbornness and commitment, conveying a dogged determination rather than flash-in- the-pan excitement. Rather than situating himself as the visionary at the helm of the ship, he stressed how younger workers would supplant him as the leader and the organization would evolve beyond his direction. Perhaps this points to a culture in need of growing in Vancouver: forward looking and stubbornly committed to a long-term vision – the creation of organizations that will outlive their founders. Much like the meals we enjoyed during our two-week tour, these coops were the filling, five- course exemplars to which we can aspire, full of stories I will be digesting for many months to come. 

I would be remiss without finally expressing my sincere thanks to the organizers and co-participants of this trip. A tour without 18 other keen, earnest and voracious learners would have been far less inspiring, and the many conversations over dinner, breakfast, walks to and from sites, and late at night deepened my understanding of the material. Vancity as an organization has served for many years in Vancouver as the thin edge of the wedge in our sector, opening space for other players to insert themselves and providing financial backing to many projects and efforts, not least of which being the worker co-op of which I am a member as well as this Bologna trip. 

If Vancity is the wedge then the main organizer and leader of this tour, Elvy del Bianco, is the requisite hammer. His hard work and dogged pursuit of whatever serves to grow our sector go well beyond reasonable expectations, and I would like to personally thank him for all his efforts in this regard.