A look at the ways Mondragon encourages innovation

What do innovation and entrepreneurship have to do with worker-owned cooperatives?
A look at the ways Mondragon encourages innovation

Professor Ariana Levinson is sharing Dean Crawford's blog for the week of May 21, 2018. She is blogging from a research trip to Mondragon, Spain.

See her previous posts:

May 21, 2018: First day in Mondragon, Spain

May 22, 2018: What does Wakanda have to do with Mondragon?

May 23, 2018: A cooperatively owned university

May 25, 2018: Inside Mondragon's labor-management relations

May 29, 2018: #metoo #yotambien #niere

Ariana Levinson in the lobby of Saiolan
Ariana Levinson in the lobby of Saiolan, a public-private partnership between the Mondragon Company and the Basque government.

The final day of the Mondragon Seminar and Tour, we toured the city with a historian and visited the Business and Administration School of Mondragon University in Onati. We earned certificates for completing the course! I have learned as much from the others attending the Seminar — who range from the executive director of the Canadian Worker Co-operative Federation to the director emeritus of Pathways to Peace, an international peacebuilding and educational center, to two educators from Living Web Farms, a non-profit organic farm in North Carolina — as I have from the workshops, and we covered an amazing amount of material in one week.

Because innovation is so critical to the Mondragon Company, I am going to write about it today, even though it is not within my field of expertise. I know entrepreneurship is a subject of interest to many in the Louisville community, including those of us at the law school.  

The Mondragon Company’s structure as an integrated network of co-ops enables it to contribute significant resources to innovation and development. One of the first entities formed was Laboral Kutxa, the cooperative bank that has provided a source of funding for many of the co-ops created later. Today, Laboral Kutxa has a foundation, Gaztempresa, that helps hundreds of people start small businesses each year, assisting with developing a solid business plan, obtaining financing and implementing the business successfully over the first year or two. Within each co-op, many have R&D departments. Then each profitable co-op provides 10 percent of its gross profits to Mondragon Investment Fund, which is an entity that provides guarantees to encourage the co-ops to make loans to entrepreneurs or new business ventures within the co-ops. Each co-op also gives 2 percent of gross profits to education and research non-profits. Mondragon University offers a LEINN degree, which is the first degree in Europe for Leadership and Entrepreneurial Innovation.  

Coop in Mondragon
A road sign points to a coop, Fagorand.

Our most intensive exposure to this culture of innovation was our visit to Saiolan, which is a public-private partnership between the Mondragon Company and the Basque government. It is one of four business innovation centers in the Basque Country; the other three are public entities. The Center helps co-ops that are diversifying bring new products to the market. It also identifies companies outside of Europe with patents on innovative products and assists co-ops to partner with those companies to manufacture and market the product in Spain and Europe. The Center promotes awareness of and training in entrepreneurship and provides project tutoring, feasibility studies and other services for companies. The Center includes a prototype lab. It fosters regional cooperation and helps companies that are competitors work as cooperators to develop new business initiatives.

The Basque region has the highest percent of R&D of any region in Spain and the lowest economic inequality. As you can see from the photos, hard work and innovation are basic precepts of the Mondragon co-ops and the Basque government.

Father Arizmendiarrieta answers the question of what innovation has to do with worker-owned cooperatives by noting the two are inseparable. “A cooperativist is a worker but also an entrepreneur.”