New Ideas for Economic and Community Development

A Report by the Cooperative Development Institute

Executive Summary

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Thanks to our sponsors: Belfast Co-op, Coastal Enterprises Inc., College of the Atlantic, Cooperative Fund of New England, Cooperative Maine, Local Enterprise Assistance Fund, Maine Farmland Trust, Maine Organic Farmers and Gardeners Association, Portland Food Co-op, VIA Agency

October 2016 DOWNLOAD THE COMPLETE REPORT AT

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Acknowledgments This report was written by: Davis Taylor PhD, College of the Atlantic Professor of Economics and Board Member of Cooperative Development Institute Rob Brown, Director of Business Ownership Solutions at Cooperative Development Institute Jonah Fertig, Director of Cooperative Food Systems at Cooperative Development Institute Noémi Giszpenc, Executive Director, Cooperative Development Institute Kate Harris, Cooperative Organizer at Cooperative Development Institute Ahri Tallon, Intern at Cooperative Development Institute

Thank you to these organizations for their major support:

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Cooperatives Build a Better Maine

We believe that cooperatively owned businesses are key to growing Maine's future economy, reversing demographic decline, and promoting widely-shared prosperity in the state. We outline in this report the advantages of cooperatives, describe their current role in Maine, the United States, and key regions around the world, and argue that they have important advantages in promoting manufacturing and strengthening Maine’s service sector. We advance policy measures that would create a “cooperative ecosystem” in Maine.

What will Maine’s future look like?

Maine has several possible economic futures. Right now, Maine’s demographic, economic and social trends are pointing in an ominous direction. While a few areas of the state will continue to grow in population and diversity and have reasonably robust economies, a large majority of the state’s communities will most likely continue to struggle and lose population. The few communities that are growing have frequently struggled to integrate New Mainers from other regions and cultures. Analysts that have looked at the statistics and trends have painted a picture of where we’re headed that is downright bleak. While we agree this future is possible, we offer an alternative way forward, a path to prosperity that is both practical and revolutionary. Our suggested path forward is practical because it builds on our existing strengths, history, culture and characteristics. It is practical, also, because it draws on economic and social policy strategies that have broad support from across the political spectrum, as well as a rich and diverse history of applications in Maine, the United States and beyond. Yet our path is revolutionary, simply because it is so different from what is continually offered up for solutions to our problems. It is revolutionary in its faith in the ability of Maine people to take control of and improve their own future. We believe it will have a revolutionary impact on securing the future we all want.

Transforming Ownership of our Economy

This report outlines a vision of a prosperous, equitable economy where all Mainers—young and old, new and longstanding—can fulfill their needs and aspirations. The economy we envision is anchored by a robust cluster of cooperative and employee-owned enterprises that help many individuals and communities create more wealth, promote entrepreneurship and innovation, and deeply root ownership locally. We explain why our vision makes sense, what it could look like, and what steps we need to take to get there. This report asks and answers the following questions:

What is a cooperative?

A cooperative is a business that is owned and democratically controlled by its members, and operates for the benefit of its members. They are formed by groups of consumers, workers, residents, farmers, fishermen, independent businesses and others to meet common needs.

What examples do we have in Maine?

Cooperative and employee-owned businesses exist throughout the state, operating in sectors such as agriculture and food production, fishing, manufacturing, retail, food service, advertising and marketing, housing, construction and engineering, banking and insurance. Throughout this report, you will find many profiles of these businesses and the impact they’ve had on their members and communities.

How can cooperative and employee ownership help Maine grow? We highlight numerous ways the cooperative model is used to meet citizens’ needs for better jobs, healthy local food, affordable housing and other basic needs, while building stronger, more resilient economies and communities. Cooperative and employee-owned businesses offer a unique opportunity for workers and independent businesses to compete in a global economy. Cooperatives are a particularly effective tool for poor and rural Mainers, Native Americans, immigrants and refugees, and others who have been marginalized by our current economy to meet their needs and create economic security and opportunity for themselves.

How do cooperatives fit into current economic trends regarding innovation and economic growth? We describe how cooperatives can help plug Maine into the most innovative (and hence fastest growing) sectors of the U.S and global economy. Cooperative ownership can help Maine build its craft-manufacturing sector and transform tourism-based jobs into more lucrative and satisfying work. We propose that Maine becomes the leading cooperative business cluster in the United States.

What successful examples are there for Maine to look to? Regions and countries that rank highest on all manner of economic and social progress also tend to have high concentrations of cooperative and employee-owned businesses. We provide examples of where this is the case and analyze the elements of history, culture, economics, and public policy that have led to these outcomes.

What lessons can we learn? The key lesson is that regions where businesses grow most quickly in numbers and size are regions where there is an “ecosystem” of similar businesses combined with supportive public and private institutions, policies, incentives and finance. We use the study of “clusters”—e.g. Silicon Valley, where there are so many tech firms that grow quickly -- to explain how Maine can develop its own cluster of cooperative and employee-owned businesses.

How do we get there? If our goal is to create a prosperous, equitable economy where all Mainers can fulfill their needs and aspirations by 2030—a time when today’s children will be seeking to make their own way in the world—then we need to learn from these examples and replicate the best of these ideas here in Maine. We offer five goals Maine can set and a dozen strategies to pursue, starting now, that will begin to improve our economy today and put the next generation on the road to success.

Executive Summary

The economy we envision is anchored by a robust cluster

of cooperative and

employee owned enterprises that help many

individuals and communities create more

wealth, promote

entrepreneurship and innovation, and deeply root

ownership locally.

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