Update on City of Boston Contract, and 5/31 Employee Ownership Workshop

LEAF continues to work with the City of Boston’s Office of Economic Development, where it is matched to businesses with needs through the On-Site Technical Assistance Program. Boston is also creating initiatives to support local worker cooperatives. One example was a workshop hosted on 5/31 by the City, LEAF, the ICA Group, and BCCO to provide information on employee ownership. Since executing the contract in March, LEAF is working with five small businesses through the program.

Image courtesy of Betsy Cowan, who works with the City of Boston on small business development.

Some notes from the workshop, which focused on converting traditional businesses to cooperative structures:

  • Foreign countries have had success with large cooperative movements. Example: Mondragon, a federation of cooperatives in Spain intended to build cooperative communities in disadvantaged areas, now employs nearly 75000 workers across 240 companies in the fields of finance, industry, retail, and knowledge.
  • 5 of Boston’s 15 cooperatives have been operating for more than 30 years, which speaks to the longevity of cooperatives.
  • 50% of businesses in MA employing between 10 and 100 workers are majority owned by people older than 55. When these owners seek to retire in the near future without a succession plan, their employees’ jobs are jeopardized. Continuity is built into the structure of a worker cooperative.
  • Full democracy often brings logistical issues. Thus most cooperatives still have a traditional management structure, except that the workers select the board of directors which oversees the management. This creates an accountability loop, preserving the workers’ interests.
  • It’s difficult to find outside management with industry experience, management experience, and the will to operate under a democratic system. This means cooperatives should focus on developing management talent from within.

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