With two Communications issued on the 10th of March, the European Commission published the Industrial Strategy (A New Industrial Strategy for Europe) and the SME Strategy (An SME Strategy for a sustainable and digital Europe). Both strategies are key steps in policy making in these areas.
CECOP’s President Giuseppe Guerini: “we need European policies to be close to the needs of enterprises on the ground. Cooperatives in industry and services produce value for society rather than extracting it. In times when the EU is confronted with important challenges such as economic inequalities, cooperatives in industry and services provide quality jobs and redistribute wealth equally. They address many societal needs as well as needs of the communities where they operate”.
In the Industry strategy, great attention is given to environmental and digital challenges. While constantly adjusting to new challenges, such as environmental and technological transformations, worker cooperatives are also an efficient tool to maintain traditional industrial activities and skills in Europe, at the local level. The cooperative enterprise model has proven its constant ability to adapt to major transformations, from the worker-owned cooperatives that have appeared with the industrial revolution to cooperative horizontal groups, clusters or multi-stakeholder cooperatives, particularly adapted to emerging industries requiring high investment in innovation, R&D and value chain. Recent development of cooperative start-ups demonstrates that they are a suitable and attractive model also for digital activities. “While emerging industry deserves specific focus, we also need the European Commission and the Member States to reinforce efforts to protect the European traditional industry, which is often subject to closure and relocation, despite its profitability”, Mr Guerini adds. Business transfers to employees, that save thousands of jobs across Europe every year, can be a great instrument to achieve it.
For both green and digital transition to be achieved, a comprehensive upskilling and re-skilling of the European workforce is needed. Cooperatives in industry and services play an important role in the development of skills since in-work education and training is one of the cooperative principles upon which cooperative enterprises are founded. CECOP will be very attentive to the upcoming EU Skills Agenda and the new “Pact for Skills”.
CECOP welcomes the announcement of an initiative on improving the working conditions for platform workers. Regardless of their employment status, all workers in Europe should benefit from decent work conditions and have access to social protection. Platform cooperatives are great partners for EU and Member States because they provide more work quality, income security, and access to social rights and protection for non-standard workers (platform workers being mostly non-standard workers).
The SME Strategy outlines three different pillars: twin transition (digital and green), reduction of burdensome administration for SMEs and access to finance.
SMEs are the backbone of the European economy and account for over 95% of cooperatives in industry and services. While some support measures for the creation phase of an SME exist and are undeniably important, more needs to be done in terms of upscaling and job retention. The economic and social impact industrial cooperatives have in their regions and local community is remarkable since they cannot delocalize, concentrate the wealth locally and do retain and create jobs at the local level.
When taking into account the size-specific needs, public authorities at national and European level should also focus on entrepreneurial diversity: the promotion and support of the cooperative model can lead to sustainable outcomes for regional and local development. “If the strength of our economy is our diversity” says Mr Guerini “the Commission should explicitly recognise cooperatives as its component. Mentioning us indirectly through our larger family, the social economy, as sustainability and the circular economy drivers, is certainly important but misses to recognize our contribution in all the other sectors of the economy.”
CECOP appreciates that the Commission keeps considering business transfers as essential and foresees to support Member States on preventive restructuring and second chance, in order to avoid bankruptcy. “Measures creating a supportive environment for transfer of SMEs are certainly needed but they should include transfers to employees, since they represent a sustainable and future-fit business solution as experience from the ground proves. Only in Italy for instance, dozens of worker buyouts are possible every year thanks to a balanced mix of regulation and financial support (see Marcora law). The experience of the Marcora law should be replicated across Europe”, Mr Guerini declares.
On the topic of environmentally sustainable development, small and medium cooperatives in industry and services present an ever-growing awareness. However, SMEs in general and cooperatives in industry and services struggle to finalise the transformation due to a general lack of investments in this direction: the green transition will be led by radical production transformation, which is beneficial but may entail job losses. For this reason, innovation and adequate support is a key driver to both technological advancement, environmental protection and job security.
Moreover, a series of specific measures are deemed very useful to better support the environmental transition of SMEs such as developing a specific diagnostic tool to guide SMEs in the transition phase, developing an EU capacity building strategy and capacity building toolbox, expanding the European Resource Efficiency Knowledge Centre, developing a tool aiming at harmonizing all new national regulation with regards to circular products (but without additional burden), and ensuring SME participation in green clusters.
In this regard, digitalisation can play an important role in the environmental transition by optimising processes, reducing waste and collecting useful data for business planning. However, training is needed to learn about digital mechanisms that are helpful in the environmental field.
The Strategy further ensures that in order to accompany SMEs in their digital transformation, the Digital Innovation Hubs (DIH) at the local level will be reinforced and a high-level SME Envoy will be appointed to lead the SME Envoy network (both national and European actors) to make sure the SMEs are mainstreamed in policymaking. Coherence in this area with EU structural funds and other programmes such as InvestEU should be pursued.
On public procurement, the Commission recognizes the untapped possibilities for SMEs: opportunities arising from public procurement improve the general economic environment, promote inclusive growth and ensure effective competition. Moreover, guidance and support measures from the Commission to contracting authorities, who are very often risk-averse, are needed in order to allow greater SMEs participation in public procurements. The Commission’s publication on socially responsible public procurement “Buying for Social Impact”could serve as an inspiration in this field.
On a final note, and following what is happening in these last days with the epidemic caused by the new Coronavirus (COVID-19), it will be necessary to set up a "reconstruction" plan for production and industrial service activities in Europe. Mr Guerini, “The epidemic has shown how important it is to support a development model, which counts on solidarity and social responsibility as factors of such development. The specificity of cooperative enterprises, which include solidarity among members and social responsibility as a production factor is an example of how industrial development and sustainability can be combined”.
CECOP will closely follow the further developments deriving from the Industrial and SME strategies.