The role of inclusive business models in creating a fairer economy

Posted: 16 August 2021, in News

As 2020 drew to a close, we looked back on a year like no other, little realising the restrictions would continue into 2021. Despite gradually moving out of lockdown, it’s clear we’ll be dealing with the health, economic and social challenges of Covid-19 for many years. 

Yet, as we are still in the throes of these challenges, we can seize the opportunity to build on what we have learned and consider how inclusive models like employee ownership and co-operatives drive a stronger and fairer future. 

Last year Scottish Enterprise, through our national Co-operative Development service, launched a Reset and Rebuild campaign highlighting the critical role these models play in the creation of a fairer, more democratic economy. The accompanying podcast series focuses on their contribution to building an economy that puts people and planet before profit. It’s a great place to learn more about their impact and the support available.

Throughout the pandemic, we have witnessed different ways of doing business, where companies prioritise wellbeing and communities support each other. These characteristics have always been at the heart of co-ops and employee-owned business and many of the businesses operating this way have demonstrated continued resilience and business growth despite the challenges faced. 

Crunchy Carrot, a local shop in Dunbar, demonstrates the value of being community owned. It went from supplying 60 vegetable boxes weekly before the pandemic to 350, responding to the community in its time of need. Well-established local supply chains with mills and farms, something chain shops didn’t have, meant all orders were fulfilled and deliveries to vulnerable customers guaranteed.  

We also saw the community hub of Bridgend Farmhouse in Edinburgh respond by providing over 75,000 meals, 14 bikes for key workers and free bike repair during the pandemic. Their incredible work saw them shortlisted for the Co-op of the Year Awards

The pandemic has highlighted the importance of community businesses, and now, more than ever, there is a desire to develop and preserve the resources that are important to communities. We work with the Plunket Foundation and Community Shares Scotland to raise awareness of community businesses and streamline support. You can find out more about community co-ops and the partnership here.

It’s not just in the immediate pandemic response where co-ops have demonstrated their potential. Granite Care Consortium was set up to deliver a multimillion-pound public sector care contract in the north east of Scotland. The partnership brings together independent, third and private sector providers creating a unique working relationship within Scotland’s health and social care sector. This consortium provides person-centred, integrated care to ensure users feel supported, safe and well while building a consistently trained, skilled workforce. 

Employee-owned businesses (EOBs) continued to demonstrate resilience despite the turbulence of Covid-19. Research carried out in Scotland showed that 53% of EOBs turnover was unaffected or grew during the pandemic compared to non-EOBs where 80% of SMEs say their revenues are declining. Further research from Co-ops UK confirms the resilience of co-ops. The Co-op Economy report shows co-ops were four times less likely to cease trading in 2020 than businesses generally and the co-operative economy grew by over £1bn in turnover to £39.7bn. 

Co-ops are well known within the social enterprise community. Built on their values, they focus on democracy, concern for community, and distribution of wealth to benefit all members. Scotland has declared its intent to become a wellbeing economy and Covid-19 has shown the importance of acting on this. At our round table to discuss the potential and value of inclusive business models, we were joined by several thought leaders in this area including Dr Katherine Trebeck, Advocacy and Influencing Lead, Wellbeing Economy Alliance, who confirmed the far-reaching potential of these models in creating a wellbeing economy:

“The economy needs to serve higher order goals. In the Wellbeing Economy Alliance Business guide, we have distilled this down into five needs; connection, dignity, fairness, nature and participation. These are the sort of goals that we need to be thinking about when we design an economic ecosystem. The good news is that pro-social inclusive business models do this or at least they are working pro-actively towards this.” 

For further information about Co-operative Development please visit our website

Darah Zahran, Inclusive Models Team Leader, Scottish Enterprise