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It’s harder to get finance as a co-operative, so it’s hardly a fair competition. Also, in most studies, co-ops and employee ownership models do actually end up
by coxmichael 3y ago
It’s harder to get finance as a co-operative, so it’s hardly a fair competition.
Also, in most studies, co-ops and employee ownership models do actually end up being more profitable and sustainable in the long term [0, 1].
[0] Page 23+ in this UK government review on employee ownership:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/31706/12-933-sharing-success-nuttall-review-employee-ownership.pdf https://assets.publishing.service.gov.uk/government/uploads/...
[1] ONS report showing the rate of survival of cooperatives in the UK after five years was 80 percent compared with only 41 percent for all other enterprises https://www.uk.coop/sites/default/files/2020-10/co-operative_survival_1.pdf https://www.uk.coop/sites/default/files/2020-10/co-operative...
- Shaanie 3y agoSkimmed the first report and it seems like employee-owned companies perform better up until around 75 employees, after which there's no benefit? That would explain why they aren't outcompeting the larger companies - their advantage disappears when they grow.
- coxmichael 3y agoI’d wager that’s more to do with raising finance than organisational productivity, but I’m not aware of any actual research on something of that scale or even how to accurately study those effects without it turning into more of a qualitative theory. Still, it’s quite an interesting possibility worth pursuing in my opinion. (Full disclosure, I work for a small nominally employee-owned company, and have mixed thoughts about how it works in practice).