Consortia – support growing enterprises in Italy
Social co-ops are the most dynamic part of the third sector: in 2011 they made up around 4% of organisations within the non-profit sector but employed more than 50% of workers within the sector. While the non-profit sector grew by 28% between 2001 and 2011, social cooperatives grew by 98% within the same period. Nevertheless, as SMEs working mainly in low-value-added sectors, they suffer from competitive weaknesses. Consortia are part of an ecosystem of various types of support structure, both political and economic. They enable their member cooperatives, by working together, to achieve scale and offer a broader range of services, without significantly increasing their operational costs.
Cooperative consortia are second-level cooperatives, which can be founded by at least three primary cooperatives with a minimum capital of only €516. They grew up essentially as a reaction to the disinterest of the mainstream economy. They may combine cooperatives that are in the same line of work, as well as those that carry out complementary activities.
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In 2005 there were 284 consortia, spread across Italy but with a concentration in the north-west of the country. In Lombardy particularly, their number is growing fast: from 22 to 70 between 1998 and 2012.
Consortia are very flexible, carrying out a wide range of activities, both representational and technical, and fall into two broad categories, ‘light’ and ‘heavy’. Their principal technical role is to bid for public and private contracts on behalf of their members. They are able to do this because in legal and accounting terms they are able to manage contracts and divide the work among their member cooperatives, and to account for their members’ expenditure as if it was their own, and not as if they were subcontractors. By coping with the paperwork, consortia also enable their member cooperatives to access new sources of funding such as the European Social Fund.
Consortia provide public authorities with a single point of contact through which they can conduct a dialogue with the local social cooperative sector.
Consortia have played a major role in enabling social cooperatives, which are relatively small in scale, to grow and to compete in larger markets. However there are other ‘lighter’ collaboration tools, such as network contacts, which have their own advantages.
Lessons of consortia in Italy
- Flexible structures for collaboration are a major asset to small and medium-sized enterprises. Consortia exist within a broader context of collaboration for both political and economic ends.
- Social cooperatives are relatively small, and so gain a significant advantage from working with other social co-operatives to access larger markets and improve their opportunities and competences.
- Though there is no specific tax exemption for consortia, specific legal and fiscal rules can make a lot of difference to the effectiveness of collaboration structures. For instance the ability of a consortium to act as a general contractor for its members, managing contracts on their behalf, is a major factor on social cooperatives’ being able to compete in larger markets.
- The administrative skills that consortia possess have also enabled social cooperatives to absorb European funding.
- The consortium is not the only model of commercial collaboration. Social cooperatives that wish to collaborate with capitalist businesses or on a wide geographic scale may prefer to use other tools such as the network contract.