Emilia-Romagna

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= as an example of sustainable manufacturing: The Emilia-Romagna region of Italy, boasts one of the highest living standards in all of the European Union and one of the lowest unemployment rates. It also has the strongest cooperative economy in Europe, with employee co-operatives representing 30% of the GDP and involving 57% of the population. [1]


Description

Alan Avans:


"New Impressions of Emilia Romagna--a Global Leader in Innovative Approaches to Development and Economic Democracy

In the 1940s, the Emilia Romagna region in northern Italy—Bologna is its center—was one of the poorest regions in Europe. Today, according to Bob Williams, of the Van City Capital Corporation in Vancouver:

“There are 90,000 manufacturing enterprises in the region, surely one of the highest densities per capita in the world! Small, medium, enterprises (SME’s) predominate. One person in twelve is self-employed or owns a small business. In recent years the region has produced the highest GDP per capita in the country, and it now ranks with the ten best in Europe…2/3 of the citizens of Bologna belong to a co-op…45% of the GDP is produced by co-ops…(and) 85% of the social services in Bologna are delivered by co-ops…”

Today it’s a fascinating web of cooperatives, small manufacturing companies, innovative social service programs, and a complex and dynamic partnership between business, labor, and government. It’s a region that was governed by the Italian Communist Party for over thirty years, and still has strong labor, social and business organizations and leaders that identify with the left, as well as a strong Catholic tradition among those sectors, and a smaller presence of similar companies, organizations, and networks that identify with the right.

I with 16 other American and Canadian cooperative practitioners just spent 5 intense days in Emilia Romagna studying this phenomena with the support of the Cooperative Charitable Trust Forum of Cambridge, Massachusetts. I was looking at this region to understand it relevance and importance for those who are looking for a model for development that is practical, has scale, and consistent with social justice values. This was my second visit and study tour. After the first, I had more questions than I started with, and was skeptical. This time, I got it. This region needs to go to the top of the list for those in the developed and developing world creating the competitive alternative development model.

 Some of Emilia Romagna’s manufacturing companies that are world class high performance companies are cooperatives. Other private companies and cooperatives work together in flexible networks that combine a number of smaller firms into joint projects. And government has played a powerfully positive role in creating sector-based service centers that assist smaller companies in being competitive in the global economy;

  • Coop Italia is the top retailer surpassing giants like the French equivalent of Wal-Mart—Carrefour—in sales. It has 6 million owner/members, 55,000 employees, 1,200 stores, and €11 Billion in sales;
  • Cooperatives are legally required to put profits into an “indivisible fund” that will sustain the company for generations and can’t be taken by the worker owners;
  • The cooperatives have their own huge insurance company—Unipol, large investment funds such as Coop Fund to provide loan and equity to start-up companies, and very sophisticated support organizations such as Lega Coop that provide a full-range of technical, educational, and financial services to insure the success of cooperatives;
  • “Social Cooperatives” provide various services to the mentally and physically disabled—“privatizing” what historically were state services but to cooperatives that are frequently preferred by professionals because they permit creativity and the delivery of high quality services and work experience for the disabled; and
  • Italian cooperatives are expanding internationally, and the cooperative movement is assisting the growth of cooperatives in both the developing as well as the developed world. Recently the Coop Fund and a large cooperative of restaurants committed $500,000 in debt and equity, as well as technical assistance to a group of workers in New York City affiliated with the labor-based Restaurant Occupation Center who are starting a restaurant cooperative in Manhattan.

Those committed to economic democracy and sustainable development need to learn more about this experience. See Coop Italia power point, Bob William’s full article, and a great description by David Thompson on the region at www.clcr.org" (http://www.ecodema.org/archives/000119.html)


Discussion

Kevin Carson:

"The closest existing model for sustainable manufacturing is Emilia-Romagna. In that region of 4.2 million people, the most prosperous in Italy, manufacturing centers on "flexible manufacturing networks" of small-scale firms, rather than enormous factories or vertically integrated corporations. Small-scale, general-purpose machinery is integrated into craft production, and frequently switches between different product lines. It follows a lean production model geared to demand, with production taking place only to fill orders, so there's no significant inventory cost. Supply chains are mostly local, as is the market. The local economy is not prone to the same boom-bust cycle which results from overproduction to keep unit costs down, without regard to demand. Although a significant share of Emilia-Romagna's output goes to the export market, its industry would suffer far less dislocation from a collapse of the global economy than its counterparts in the United States; given the small scale of production and the short local supply chains, a shift to production primarily for local needs would be relatively uncomplicated. The region's average wage is about double that of Italy for a whole, and some 45% of its GDP comes from cooperatively owned enterprises.

Emilia-Romagna's production model is a fulfillment of the potential of electrically powered machinery." (http://c4ss.org/wp-content/uploads/2009/01/industrialpolicycarson0109.pdf)

John Restakis talks about the cooperative economy of Emilia Romagna, and about the networks of small manufacturing companies. http://youtu.be/bPpLaLcqz7E

It's Legal Basis

Kevin Karner:

" Article 45 of the Italian Constitution (1947) states: “The Republic recognizes the social function of cooperation characterized by mutual aid and not private profit. The law promotes and favors the growth of these structures using the most appropriate means and guarantees that their character and purpose will be inspected accordingly.”

Also in the constitution was a provision called Basevi’s Law, which allowed declared cooperatives to transfer their surpluses to a reserve free of corporate tax on the condition that if the coop be dissolved or sold the reserve is dispersed to other cooperative associations, providing development funds for other cooperative initiatives. Additional tax advantages are tied to initiatives like “employment for marginalized” communities. " (http://onthecommons.org/good-life-italian-style)

Critique: Francesco Garibaldo on the Studies of Reggio Emilia in 2010 and Imola 2017

– fieldwork on working conditions in the stronghold of the cooperative sectors.

"Common theme: The deterioration of cooperative principles towards more business criteria, closer to that of a capitalist company. There are two different sorts of perceptions by workers:

Fake participation & corporatist participation.

 Fake cooperatives: an entrepreneur creates a cooperative because of strategic advantages, but it is entirely phony.

 Corporatist solution: Those with a long perspective on this see a gradual abandonment of cooperative values in which “cooperation is a façade”. Wealthy members of a cooperative control the cooperative and control other cooperatives. A minority of people create a good situation for themselves, but not for outsiders and nonmembers.

There is a general perception that this deterioration is often the result of demands of clients of the cooperative; this is a structural condition that imposes extreme flexibility and cost cutting. The privatization process was based on the possibility of cutting costs through harsh labor conditions, and this privatization led to the boom in cooperatives operating under intense competition. The result is a downward spiral.

In carework cooperatives, the workers saw cooperatives as a way of self-organizing and acting on principles of meaningful work. Workers thought that complex social services made it possible to strike a deal that is not just cost cutting, but also, because of the quality requirements of such services, could support the realization of other values. This possibility was blocked because of competition.

In Imola I studied a service cooperative in which wages and working conditions are in line with best of private sector. But still the cooperative is competing with private firms on the same grounds as private firms. This firm is the hub of a supply chain of firms in which there are 270 cooperative members and 2000 nonmembers in this supply chain hub. Those 270 are “a happy few”, but this is not a process of diffusing ownership and quality of work." (https://www.ssc.wisc.edu/~wright/Cooperative-Pathways/Padua%20meeting%20Report.pdf?)


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