Co-operation can grow Scotland's economy

Co-operative and employee owned business models are attracting increasing interest from businesses and policymakers across the UK seeking more productive and profitable ways of working. Research suggests a combination of shared ownership and employee participation delivers superior business performance and sustainability.

Success stories include Merchant City Tourism & Marketing Co-operative, a co-operative of 180 businesses in Glasgow's historic Merchant City, including bars, restaurants, theatres, visitor attractions, shops and music venues. Since receiving start-up advice from CDS, joining forces has allowed the members to create a brand, a website, merchandise and a marketing plan to attract more people to the area.

Chair and Leader of Glasgow City Council Gordon Matheson says: "What the businesses are telling us is that their footfall has increased and their take at the tills has gone up as a result of the activities that we have been promoting." 

In East Kilbride, robotic handling specialist Clansman Dynamics completed a £2.2m employee buyout last year with specialist help from Baxi Partnership and CDS. The company, which numbers Volvo and Fiat amongst its clients, employs 30 people and turns over £7.5m.

Founder Dick Philbrick says: "I wanted to find a form of ownership that was anti-short-termism and would keep the business in Scotland. Employee ownership will allow us to focus on the long-term, develop an increasing range of technically difficult products and build the business in a highly competitive market."   

In the Borders, Stewartry Care, the largest independent provider of personal health care at home services in Dumfries & Galloway, and the largest employee owned company in the south of Scotland.  Based in Castle Douglas, it has more than 300 elderly and/or disabled clients across Dumfries & Galloway and employs 130 people. In 2004, 97% of the employees voted for an employee buyout, which was supported by Baxi Partnership, the employee ownership investment vehicle. Turnover increased by 16% in the first year and profitability by 39%.

"Employee ownership increases staff retention," explains Stewartry Care Managing Director Louise Smith. "My experience has been that staff enjoy working in a situation where they have real influence in their working environment and how their company develops."

In Argyll, local success stories include employee owned Loch Fyne Oysters and Argyll Food Producers, a co-operative of nine local food producers who sell their products as ready-to-eat food at events under the ‘Food from Argyll’ banner.

"Employee ownership helps the local economy by anchoring businesses in the region and providing stability through succession," explains Loch Fyne Chief Executive Bruce Davidson, who is also member of the CDS Advisory Board.

"Selling to a competitor or a management buyout are not the only ways for the owner to exit the business.  There is always a fear at these times that the company could be bought by a buyer from elsewhere and disappear from the region.  An employee buyout is an effective way of avoiding that and of attracting people back into rural areas, while ensuring that the owner receives a fair price for the business."

The members of Argyll Food Producers include Bumble, a maker of hand-made puddings; Winston Churchill Wild Venison, a venison gamekeeper and producer and Ifferdale Lamb, a beef and lamb producer.

"The members all saw the co-operative as an opportunity to get into a market that would be really hard to crack on their own," says co-ordinator Fergus Younger, also CDS Advisory Board member. "With events, there is always an element of uncertainty, however turnover has grown year-on-year and it has become increasingly profitable as members focus on the correct events and refine their operations."

CDS promotes co-operative and employee owned enterprise across Scotland and is widely supporting Co-operatives Fortnight. 

Sarah Deas, Chief Executive of CDS said: “Co-operative business models are increasingly in the spotlight and being advocated by business organisations, political parties and international organisations such as the UN.   There is a growing interest in co-operative business models, and the productivity and community benefits they provide.  We are delighted that this dedicated Fortnight has been launched, and we will be supporting the campaign across Scotland.”

The initiative is organised by Co-operatives UK, the membership organisation for co-operative enterprise, and will promote co-operative business models with the theme – There is an Alternative – and a website – http://www.thereisanalternative.coop/