For a European framework that fosters social innovation


Managing Director, SMart

The concept of platform cooperativism is an attractive one, but there are a number of obstacles to its development.

For a European framework that fosters social innovation

Firstly, the cooperative model encompasses a very broad variety of situations, from small cooperatives in which workers share their tools (for example, potters sharing a kiln) to supermarket chains like Leclerc. Secondly, legal form is not a guarantee of virtue: some cooperatives adopt a collective (horizontal) governance structure, while others use a more “conventional” (vertical) decision-making process. In addition, producers’ cooperatives alter the role of workers, who have a dual status both as paid employees (subordinates) and coowners of the capital stock and/or the work tool (entrepreneurs). This blurs the lines between traditional categories and can either prompt fear or paint a romantic picture of small businesses where decisions are taken jointly in a horizontal management structure. This idealistic perspective prevents the development of large-scale, open cooperatives. As a result, cooperatives are confined to a smallscale economy, much like social and solidarity enterprises.

The biggest problem, however, is of a financial nature: dividends are limited in the cooperative model, which can be off-putting to conventional investors. Those who stand to gain the most from investing in cooperatives are stakeholders (including users), public authorities (services of general interest) and, lastly, mutual insurance companies and cooperative banks looking to reinvest the profits they have managed to rake in.

However, the most successful digital platforms have managed to attract substantial investment in projects that “look good” (using the traditional capitalistic model). They claim to be part of the sharing economy but there is very little actual sharing involved in the most well-known digital platforms, and the sharing economy existed before its digital form (think about local supply chains, car-pooling, etc.). The real problem with netarchical digital platforms is of a social nature: it is not so much that they fail in their role of employers and see themselves merely as intermediaries (they do provide an opportunity for thousands of people to work independently), but that some people (including those who work for digital platforms) do not have access to social protection.

SMart works in the opposite way to these platforms by assuming the role of an employer to afford the best possible protection to independent and irregular workers. Regardless of the working method, it is urgent to develop a system of labour taxation and social security contributions that delivers real social protection, including for those working for digital platforms.

To conclude, social innovation is essential to promote platform cooperativism and other socially sustainable solutions. This will require some experimentation, as social innovation cannot be achieved without altering the boundaries of existing frameworks at least a little. It would however be feasible to create a regulatory framework that fosters social experimentation in partnership with the various stakeholders. Ideally, the framework would be designed at European level then implemented at other different levels.