A study of the contribution of cooperative models to Scotland’s economic strategy and evaluation of Cooperative Development Scotland

The report has two primary aims: to present the findings of a study into the contribution of cooperative models to Scotland’s economic strategy (ES); and to provide an evaluation of Cooperative Development Scotland (CDS) over the period 2009-2015.

The review draws on the views of 40 stakeholders, 61 CDS supported client businesses, which is 41% of the total businesses supported by CDS, and four focus groups with employees from employee owned (EO) businesses. The research was conducted via face-to-face and telephone consultations, a detailed telephone survey, and a wider online survey. A desk review of CDS management information, and a literature review of best practice in supporting cooperative models, were also conducted.

The review finds that there is an element of untapped potential in the sector, and that the original market failure rationale for establishing CDS remains. It indicates that the impact of CDS to date is positive, with CDS supporting almost 150 lasting cooperatives, resulting in a net additional turnover of £34.8m to date with a further £19.4m expected in the future. As a result of CDS’ input, 56% of companies have seen improved employee performance and 88% have or will implement more flexible working practices. The review finds potential to grow the cooperative sector significantly and that cooperatives are making a contribution to the 4 I’s of the Scottish Economic Strategy (innovation, internationalisation, investment and inclusive growth), with potential to increase this further. Additionally, the review finds there is an advantage to be gained from greater integration and partnership with other SE specialist teams: CDS can be seen to support innovation collaboration which has the potential to drive a far greater level of referrals to the CDS and make the transition process for businesses adopting alternative business approaches easier. It is suggested that these links could also promote greater collaborative activity across the sector more generally. The review argues that there is a need for greater capacity building within communities; CDS it suggests, could provide some of this support. It also highlights a lack of awareness of alternative business models in schools and indicates that this needs to be addressed if future businesses are going to look to adopt alternative business approaches in the future.

The review makes a number of recommendations including: greater integration of CDS into Scottish Enterprise’s (SE) suite of specialist teams; and that CDS maintains its pan- Scottish remit and underlying values, which it should strive to communicate to other businesses as an alternative to traditional models. The review also recommends that CDS, while focusing on EO and consortium cooperatives, should also continue to support community cooperatives. Additionally it is recommended that CDS undertake an educational role to promote alternative business models in schools, which could in turn drive a future pipeline of clients. It is also suggested that CDS could contribute as a partner organisation to projects to ensure it maintains its promotion and influence in community cooperatives and other community strengthening projects.