How to replicate a regional approach to economic development through the lens of cooperative ownership March 2015

1. 1
1
Blueprint
for
Increasing
Worker
Ownership
in
Low-­‐Income
Communi<es
How
to
replicate
a
regional
approach
to
economic
development
through
the
lens
of
coopera6ve
ownership
March
31,
2014
Sushil
Jacob,
Alison
Lingane,
Ricardo
Nuñez

2. 2
2
AGENDA
1.
Introduc<ons
2.
Why
a
BLUEPRINT
for
worker
ownership?
3.
Elements
of
the
BLUEPRINT
4.
What
we
learned
5.
Resources
available
6.
Next
steps
from
here

3. 3
3
1.
Introduc<ons
Alison
Lingane
Project
Equity
Ricardo
Nuñez
SELC
Sushil
photo
Sushil
Jacob
EBCLC

4. 4
4
2.
Why
a
BLUEPRINT
for
worker
ownership?

5. 5
5
45%
of
working
adults
in
the
East
Bay
earn
below
Basic
Family
Wage
55%
%
working
adults
45%
hQp://workingeastbay.org/wp-­‐content/uploads/2014/05/State-­‐of-­‐Work-­‐in-­‐the-­‐East-­‐Bay-­‐and-­‐Oakland-­‐2012.pdf
Basic
Family
Wage
is
the
minimum
needed
to
cover
basic
living
expenses
of
food,
shelter,
healthcare,
transporta6on
and
childcare.
In
California
it
is
$18.15
/
hour
for
a
family
with
2
working
parents.
www.lafla.org/pdf/MakingEndsMeet.pdf
THE
PROBLEM
WE
WANT
TO
SOLVE
“Working
poor”
has
become
the
norm

6. 6
6
What
are
Worker-­‐Owned
Coopera<ves?

7. 7
7
What
are
Worker-­‐Owned
Coopera<ves?
Coopera<ves

8. 8
8
What
are
Worker-­‐Owned
Coopera<ves?
Coopera<ves
Employee
Ownership

9. 9
9
What
are
Worker-­‐Owned
Coopera<ves?
Coopera<ves
Employee
Ownership
Worker-­‐
Owned
Coops

10. 10
10
What
are
Worker-­‐Owned
Coopera<ves?
Coopera<ves
Employee
Ownership
Worker-­‐
Owned
Coops
Businesses
that
are
owned
and
controlled
by
their
workers

11. 11
11
WHY?
Worker
ownership
brings
significant
benefits
All
cita6ons
are
in
Worker
Coopera*ves:
Pathways
to
Scale
TO
WORKERS
ü BeQer
pay
and
benefits
ü Assets
(business
ownership)
ü A
voice
in
key
decisions
TO
BUSINESSES
ü Higher
produc6vity
and
growth
ü Lower
employee
turnover
ü Improved
business
longevity
TO
SOCIETY
ü Local
spending
mul6plier
ü Higher
vo6ng
levels
ü Correla6on
with
other
social
benefits

12. 12
12
3.
Elements
of
the
BLUEPRINT

13. 13
13
We
have
a
vision
that
many
share...
Worker-­‐owned
coops
building
community
wealth
at
scale

14. 14
14
Some
imagine
a
yellow
brick
road...
Worker
coops
at
scale
“Let’s
just
start
more
worker
coopera6ves,
and
grow
them
to
be
big
players
in
our
local
economies!”

15. 15
15
But
in
fact,
there
are
MULTIPLE
ways
to
get
there
Worker
coops
at
scale

16. 16
16
Each
one
plays
an
important
role
in
the
economy
Start
and
grow
SMALL
businesses
Start
and
grow
BIG
businesses
Convert
EXISTING
businesses
Worker
coops
at
scale

17. 17
17
Each
one
plays
an
important
role
in
the
economy
Start
and
grow
SMALL
businesses
Start
and
grow
BIG
businesses
Convert
EXISTING
businesses
Worker
coops
at
scale
Our
guiding
ques6on:
How
can
we
accelerate
growth
along
any
or
all
of
these
pathways?

18. 18
18
Bay
Area
Blueprint
for
Increasing
Worker
Ownership
in
Low-­‐Income
Communi6es
WORKER
COOP
ACADEMY:
small-­‐scale
coop
entrepreneurship
SCALE
STRATEGY
1:
scalable
coop
incuba6on
plan
SCALE
STRATEGY
2:
business
conversion
assessment
Worker
coops
at
scale

19. 19
19
Bay
Area
Blueprint
Mul<-­‐Sector
Partners
xf

20. 20
20
4.
What
we
learned

21. 21
21
Worker
Coop
Academy:
small-­‐scale
coop
entrepreneurship
Scale
strategy
1:
scalable
coop
incuba6on
plan
Scale
strategy
2:
business
conversion
assessment
Worker
coops
at
scale
Bay
Area
Blueprint
learnings

22. 22
22
First
cohort
7
teams
graduated
on
12/10/14
4
teams
get
follow-­‐on
business
coaching
and
6
get
legal
counsel
Pictured
here:
Mandela
Foods
Coop,
Mandela
Marketplace
&
WCA
organizers
WORKER
COOP
ACADEMY,
Oakland

23. 23
23
WORKER
COOP
ACADEMY:
Mul<ple
par<cipant
types
Mix
of
coop
types
–
by
design
to
meet
‘market’
need
• 1
start-­‐up
• 1
exis6ng
looking
to
expand
/
grow
• 2
nonprofit
developers
(with
coop
members)
• 3
conversions
Business
models
that
build
a
beQer
world
• 3
farming
/
fresh
food
access
(Plan6ng
Jus6ce,
Mandela,
New
Hope)
• 2
sustainable
landscaping
/
construc6on
(Mariposa,
DIG)
• 2
holis6c
health
(Sarana,
On
The
Spot))

24. 24
24
WORKER
COOP
ACADEMY:
What
par<cipants
told
us
“Having
the
opportunity
to
be
in
the
Academy
with
my
co-­‐
workers
and
to
learn
about
coop-­‐specific
things
like
coopera6ve
governance
was
invaluable.
We
need
more
of
this
kind
of
thing
if
we’re
going
to
build
the
kind
of
economy
we
want,
especially
for
people
of
color
and
low-­‐income
folks.”
“The
Academy
was
very
impacqul
for
me
in
giving
great
resources
and
viable
opportuni6es
for
coopera6vely-­‐
minded
people/organiza6ons
to
support
each
other
in
growing
their
visions
while
strengthening
the
bones
of
the
businesses.”

25. 25
25
Worker
Coop
Academy:
small-­‐scale
coop
entrepreneurship
Scale
strategy
1:
scalable
coop
incuba<on
plan
Scale
strategy
2:
business
conversion
assessment
Worker
coops
at
scale
Bay
Area
Blueprint
learnings

26. 26
26
SCALE
STRATEGY
1:
Business
fit
scorecard
ranks
business
ideas
for
social
impact
and
business
feasibility
JOB
CREATION
ü Ability
to
create
50-­‐100+
good
jobs
at
maturity
ü Speed
to
50
jobs
ü %
of
total
jobs
that
are
available
'entry
level'
to
LMI
workers
JOB
QUALITY
ü Compensa6on,
rela6ve
to
the
cost
to
sustain
a
family
locally
ü Career
laddering
and
professional
growth
poten6al
ü Poten6al
for
higher
than
industry
average
pay
and
robust
asset
sharing
ü Other
job
quality
factors
BUSINESS
CHARACTERISTICS
ü Compe66ve
advantage
ü Poten6al
for
mission-­‐aligned
or
anchor
ins6tu6on
business
contracts
ü Start-­‐up
capital
requirements

27. 27
27
Business
Fit
Scorecard
Score,
then
compare
individual
business
ideas
based
on
rela6ve
importance
of
social
impact
components
and
strength
of
business
ideas

28. 28
28
SCALE
STRATEGY
1:
Analysis
of
Bay
Area
industries
iden<fied
business
ideas
in
many
sectors
• Biotechnology
(along
supply
chain)
• Green
building
services
– Sub-­‐sector:
LED
ligh6ng
• Green
infrastructure
– Sub-­‐sector:
Stormwater
management
• Healthcare
• Logis6cs
&
Transporta6on
• Manufacturing
– Sub-­‐sector:
Specialty
food
and
other
light
manufacturing
• Tech
Services
– Sub-­‐sector:
Networking,
security
and
helpdesk
services
• Reviewed
local
reports
on
the
Bay
Area
Economy
completed
by
regional
and
city-­‐focused
organiza6ons,
and
nonprofits
• Interviewed
nearly
50
individuals
across
nine
sectors
• Significant
web
research

29. 29
29
SCALE
STRATEGY
1:
Leading
to
addi<onal
considera<ons
for
selec<ng
a
business
• Presence
of
quality
job
training
programs
• Mission
focus
of
business
• Poten6al
for
support
from
exis6ng
local
coops
• Unique
“connec6on
to
market”
opportuni6es

30. 30
30
SCALE
STRATEGY
1:
Example
businesses
demonstrate
different
approaches
to
“connec<on
to
market”
• Based
on
market
demand
and
differen6ated
offering
(compe66ve
advantage)
A
“design-­‐build-­‐maintain”
company
with
strong
design
aesthe6cs
in
the
stormwater
/
water
efficiency
space
• For
anchor
clients
LED
ligh6ng
retrofits
for
public
and
mission-­‐aligned
ins6tu6ons
that
have
long-­‐term
commitments
and
incen6ves
to
increase
energy
efficiency

31. 31
31
Worker
Coop
Academy:
small-­‐scale
coop
entrepreneurship
Scale
strategy
1:
scalable
coop
incuba<on
plan
Scale
strategy
2:
business
conversion
assessment
Worker
coops
at
scale
Bay
Area
Blueprint
learnings

32. 32
32
SCALE
STRATEGY
2:
Why
focus
on
business
conversion?
• Lack
of
succession
planning
is
the
#1
preventable
cause
of
job
loss
• Baby
boomer
re6rement
wave
(“silver
tsunami”)
• Bay
Area
beach
head
of
socially
responsible
companies
• Business
“conversion”
risk
<
start
up
risk

33. 33
33
xf
SCALE
STRATEGY
2:
Lack
of
succession
planning
is
the
#1
preventable
cause
of
job
loss
According
to
the
Ohio
Employee
Ownership
Center
• Only
15%
of
family
businesses
succeed
to
the
2nd
genera6on
• Only
5%
succeed
to
the
3rd
genera6on
• Those
that
don’t
close
are
sold
to
out-­‐of-­‐state
buyers
or
private
equity
firms
that
oyen
relocate
jobs
or
the
en6re
business
What
if,
instead,
these
businesses
were
sold
to
their
workers?
hQp://www.oeockent.org/exit-­‐planning/

34. 34
34
“Trillions
of
dollars
of
business
value
are
going
to
change
hands
in
the
next
10
to
20
years.”
Image:
BreQ
Ryder,
The
Economist
Quote:
Bob
Balaban,
Headwaters
MB,
a
Denver-­‐based
investment
bank

35. 35
35
SCALE
STRATEGY
2:
Employee
ownership
addresses
business
owners’
fears
about
selling
their
businesses
Owners
fear
that
a
sale
of
their
business
to
another
(usually
larger)
company
would
result
in
its
mission
being
overshadowed
or
cut
out
altogether,
local
offices
or
stores
closed
down,
employees
laid
off
and
valued
customers,
vendors
and
partners
de-­‐priori<zed

36. 36
36
SCALE
STRATEGY
2:
Quan<ta<ve
analysis
of
Oakland
businesses
shows
concentra<on
in
a
few
industries
Analysis
criteria
• Growing
industries
• 20-­‐200
employees
• Low
wage
workers
Resul<ng
target
industries
• Manufacturing
• Commercial
prin6ng
• Logis6cs
&
shipping
• Health
services

37. 37
37
SCALE
STRATEGY
2:
Quan<ta<ve
analysis
of
Oakland
businesses
showed
concentra<on
in
a
few
industries
Analysis
criteria
• Growing
industries
• 20-­‐200
employees
• Low
wage
workers
Resul<ng
target
industries
• Manufacturing
• Commercial
prin6ng
• Logis6cs
&
shipping
• Health
services
The
Bay
Area’s
concentra6on
of
mission-­‐driven
companies
becomes
a
“beach
head”

38. 38
38
SCALE
STRATEGY
2:
We
need
to
use
our
megaphone
with
business
owners,
business
associa<ons,
employees,
CPAs,
and
engage
impact
investors
“If
I
heard
success
stories
about
this
a
couple
*mes
a
year,
it
would
be
on
my
radar
when
I
am
ready
to
sell
my
business.”

39. 39
39
5.
Resources
available

40. 40
40
Resources
available
Worker
Coop
Academy
• Round
2
next
fall
(we
are
ac6vely
fundraising
for
this)
• Think
Outside
the
Boss
workshops
and
manual
• WCA
curriculum
will
be
available
early
Fall
2015
• Upcoming
Laney
course
as
soon
as
Fall
2015
• Co-­‐opLaw.org:
online
resource
about
worker
coop
law

41. 41
41
Resources
available
SCALE
STRATEGY
1:
scalable
coop
incuba<on
plan
• Business
fit
scorecard
• WriQen
industry
and
sector
assessments
– Biotechnology
(along
supply
chain)
– Green
building
services,
sub-­‐sector
LED
ligh6ng
– Green
infrastructure,
sub-­‐sector
stormwater
management
– Healthcare
– Logis6cs
&
Transporta6on
• Worker
Coopera6ves:
Pathways
to
Scale
white
paper

42. 42
42
Resources
available
SCALE
STRATEGY
2:
business
conversion
assessment
• Methodology
for
assessing
business
“conversion”
poten6al
in
your
city
• Outreach
plan
to
engage
business
owners,
employees,
investors
and
professional
service
providers
(CPAs,
accountants,
lawyers)
• Case
studies
of
businesses
that
have
converted
–
released
in
early
April
by
Project
Equity
• Guide
to
worker
coop
conversions
will
be
available
later
this
year

43. 43
43
6.
Next
steps
from
here

44. 44
44
Implemen<ng
the
Blueprint
ü WCA
–
Round
2,
Fall
2015
ü SCALE
STRATEGY
1:
scalable
coop
incuba6on
plan
– Project
Equity
is
looking
for
partners
and
crea6ve
“connec6on
to
market”
opportuni6es
– Project
Equity
will
focus
more
on
this
strategy
in
the
coming
years
ü SCALE
STRATEGY
2:
business
conversion
assessment
– Coop
Conversion
Incubator
with
aggressive
“pipeline
development”
(Project
Equity)
ü “Collec6ve
impact”
effort
in
its
nascent
organizing
stages
– Project
Equity
and
SELC
are
spearheading
ü Worker
Coopera6ve
Bill
in
CA
Assembly
– SELC
and
EBCLC
sponsoring
AB
816
to
create
a
worker
coopera6ve
statute
ü City
Ordinance
for
the
Promo6on
of
Worker
Coops
– SELC
is
currently
working
with
Oakland
City
council
members
to
pass
a
city
ordinance
that
promotes
the
development
of
worker
coopera6ves.

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45
For
more
informa<on…
• On
the
Bay
Area
Blueprint,
visit
Project
Equity’s
website:
www.project-­‐equity.org/bay-­‐area-­‐blueprint
• On
the
Bay
Area
Worker
Coop
Academy,
visit
SELC’s
website:
www.theselc.org/worker-­‐coop-­‐academy
Sushil
Jacob
sjacob@ebclc.org
Alison
Lingane
alison@project-­‐equity.org
Ricardo
Nuñez
ricardo@theselc.org
Hilary
Abell
(not
presen6ng)
hilary@project-­‐equity.org
Blueprint
for
Increasing
Worker
Ownership
by
Blueprint
Collabora6ve
is
licensed
under
a
Crea6ve
Commons
AQribu6on-­‐NonCommercial-­‐ShareAlike
4.0
Interna6onal
License.

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Ques<ons,
comments,
or
thoughts
to
share?