Co-operative approaches to improving work and livelihoods in the digital economy

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About the project

Workers face a host of challenges in the digital economy, from precarious employment to weak social protections, discrimination and a lack of voice on the job. This knowledge synthesis project identifies the potential of co-operatives to improve workers’ conditions in the gig economy, tech sector and digital creative industries.

Co-operatives are businesses democratically owned and governed by their members. Of the different types of co-operatives, this project focuses on worker-owned co-ops and multistakeholder co-ops with worker-members.

Co-ops deliver a specific benefit to a defined member group—they satisfy a need for a sustainable livelihood or meaningful work, for example. Co-ops differ from traditional business structures in how they spread decision-making power and economic rewards among their members. They also uphold a set of co-operative principles including, but not limited to, concern for community and co-operation among co-operatives.

• What groups of workers are turning to the co-operative model in the digital economy?
• Can co-ops mitigate precarity, deepen worker engagement and combat inequality in the digital economy?
• If co-ops are a promising means to improve livelihoods and democratize work, what are the obstacles to increasing their uptake?
• What policies and practices have been forwarded to grow co-operatives’ presence in the digital age?

Guided by these questions, this project’s methodology combined a scoping review and thematic analysis of 100 academic articles and book chapters, news stories and reports published between 2015 and 2021.

Key findings

• Interest in co-operatives is growing in digital economy contexts, particularly among three groups:
  • Platform workers in the on-demand economy are developing co-operative platforms that match clients to workers for geographically bound services such as ridesharing, cleaning and personal care.
  • Workers in digital creative industries are forming worker co-operatives in a range of fields, from website development to video games and marketing.
  • Self-employed workers are using the co-op model to overcome challenges stemming from their employment status. These co-ops provide mutualized services to help project-based workers manage their careers (e.g., legal advice, payment collection).
    
• While many co-ops in these fields are new, preliminary research shows that co-operatives are an effective tool for empowering workers and mitigating precarity in the digital economy:  
  • Gig workers can receive better compensation from co-op platforms than from incumbent platforms.
  • Through freelancer co-ops, self-employed workers access career supports and social protections without compromising their independence and flexibility.
  • In tech co-ops, worker-owners have a say over what projects their business takes on.
• Co-ops are more likely to use technology to improve, rather than degrade, working conditions:
  • Some co-op platforms do not allow individual workers to be rated, opting out of a feature of gig-economy apps that can exacerbate stress and facilitate discrimination.
  • Co-op members can choose to cap the number of workers on a platform, potentially reducing competitive pressure on wages and protecting employment quality.
  • Some tech co-ops specialize in producing software for democratic decision-making in the workplace.
    
• Despite their promise, co-operatives’ capacity and presence in the digital economy is constrained by structural challenges, including access to capital, public knowledge of co-ops, competition and business development support.
  
• Innovative efforts to help co-ops start, survive and scale in the digital economy are emerging:
  • Under the banner of “Exit to Community,” advocates are exploring ways to convert existing technology companies to community ownership and improve co-ops’ access to investment without undermining their democratic structure.
  • Platform co-ops are adopting a longstanding co-op model, the federation, where individual co-ops pool resources and set up shared infrastructure to serve member-co-ops’ mutual needs.
  • Co-op supporters are adapting the tech sector concept of the startup incubator.
    
• Canada is a site of co-operative innovation in the digital economy. Examples include: Stocksy United, an artist-owned stock photography platform; Eva, a ridesharing co-op; Coopérative Belvédère, a communication agency; and Hypha, a technology services worker co-op.

Policy implications

Recommendations for growing worker co-operatives’ presence in the digital economy:

• Raise awareness of co-operatives among future founders by covering the co-op model in postsecondary business, technology and creative industries programs.
• Build knowledge of the co-op model at strategic sites of new business formation by holding workshops at tech incubators, cultural hubs and coworking spaces.
• Enhance publicly funded business development support for co-op projects by training frontline business advisors in the co-op model, leveraging and expanding the co-op development capacities within co-operative associations, and establishing co-op-centric incubators. 
• Lower barriers to start a co-op platform by forming co-operative federations to develop, maintain and cost-share digital infrastructure.
• Support freelancers by developing shared-services co-operatives that provide business support and facilitate access to social protections.
• Foster an enabling environment for co-operative businesses by prioritizing co-ops in public procurement programs.
• Build inter-co-op capacity by creating networks of digital co-ops for co-training and co-bidding on projects.
• Increase the startup capital available to digital co-op projects by developing co-op-tailored investment frameworks that combine contributions from public funds, established co-ops and social investors.
• Deepen the partnership between co-ops and unions by identifying needs and opportunities for the co-development of co-operative platforms and union co-ops.

Further information

Read the full report

Contact the researchers

Greig de Peuter, Associate Professor, Department of Communication Studies, Wilfrid Laurier University: gdepeuter@wlu.ca

Date modified:

2022-07-29