I moved to the Basque Country 22 years ago from Colombia to study and work at Mondragon University. I had no idea how much I would learn living in such a small, hard-working, and resilient community in the Mondragon Valley. The region of the Alto Deba, Debagoiena in Basque, has a surface area of 342 square kilometers and a population density of 180 inhabitants per square meter. The region is composed of several adjoining towns in the Deba river valley, whose union alliances are so strong that they transcend political, commercial, and institutional relationships. This valley, and particularly the town of Mondragón, are now best known as the birthplace of the Mondragon Cooperative Movement, which is led by the Mondragon Corporation.
At the time, I saw a society with a strong personality, work ethic, social cohesion, lifestyle, and socioeconomic homogeneity. I was captivated but it took me a long time to adjust. The region also had a rich cultural and linguistic identity, a deep connection to the land, and an impressive industrialized rural-urban community that didn’t forget its rural roots. It’s a culture where people are proud of their achievements, accustomed to fighting under hostile conditions, and suspicious of anything foreign or novel until it proves to be trustworthy.
This story may seem trivial to you, but given the current state of discontentment with the capitalist economic system, much attention has been focused on this small town of Mondragón, which has proven to be a fairer, more responsible, balanced, and sustainable system. Many people and institutions visit Mondragon to learn about its history and discover its keys to success.
What has Mondragon accomplished, and what can we learn from their experience?
Many articles and books have been written about the “Mondragon miracle,” including its outcomes, characteristics, and even failings. I’d like to synthesize the points that I believe are most important, not only as a source of learning but also as levers that will help Mondragon continue to grow without losing its essence, its distinctiveness.
- A single point of origin, a leader, and unmistakable values. In the midst of the Spanish post-war, the priest Arizmendiarrieta arrived in Mondragon in 1941 with revolutionary ideas about solidarity and mutual work, linking concepts such as social justice and retributive balance. He was always concerned with the individual, the community, and their well-being. His ideas inspired a group of young pioneers to form Mondragon’s first cooperative company. It wasn’t just a matter of surviving the crisis; it was also a matter of devising a self-governing model that would produce strong, resilient businesses that could be passed down to the next generation.
- Values and principles in practice. Mondragon cooperatives adhere to a set of corporate principles and values that are aligned with the seven cooperative principles of the International Cooperative Alliance (ICA). But what is interesting is not that these principles are defined and put in writing, but that there is a real will to put them into practice, in the most authentic way possible. “Speak little and do a lot” is the unconscious motto at Mondragon that is part of its business culture. Zero bragging, zero buzzwords.
“Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility, and caring for others” ICA
- From a neighborhood network to a regional and global ecosystem. Solidarity through cooperation and social responsibility through mutual support were the seeds that sowed the first network of companies in Mondragon. Currently, Mondragon has built an ecosystem around itself that provides essentials to its base cooperatives: a credit union Caja Laboral (Laboral Kutxa), a Social Welfare Body Lagun Aro, a university: Mondragon Unibertsitatea, 3 cooperative schools, 14 R&D centers, 8 social foundations, and numerous support services for internationalization and the creation of new businesses. The Corporation is also a member of the Chambers of Commerce, sectoral associations in the Basque Country and Spain, sectoral clusters, and the majority of active professional associations. It also serves on the governing bodies of the Federation of Cooperatives of the Basque Country and Spain, as well as other sectoral federations and social economy bodies. Mondragon participates in sectoral and general forums organized by various public administrations at all levels, assisting in the definition of cooperative Basque legislation to promote new cooperatives. Mondragon also works to promote cooperative principles on a global scale, such as the union co-op model, which was co-designed with the United Steelworkers to create worker cooperatives in the United States.
- Figures of significance, ambition, and perseverance. Mondragon is organized into four divisions: finance, industry, retail, and knowledge. It currently has 95 separate, self-governing cooperatives, approximately 80,000 employees, and 14 R&D centers, ranking first in the Basque business ranking and tenth in Spain. It has 141 manufacturing plants in 37 countries, 53 commercial businesses, and more than 150 sales offices. For 2020 alone, Mondragon expected about 11.482 million Euros in revenue, 335 million euros in investments, and 25,30 million Euros in resources for social content activities.
- Future challenges ahead. Not everything in this cooperative oasis is fine. The current environment and its evolution necessitate cooperatives adapting quickly and making decisions that are not always in line with their principles and values. Questions like, “How do we continue to live cooperative values and pass them on to new generations influenced by an egomaniacal and capitalist worldview?” How can we continue to create high-quality jobs? How do you expand internationally in a non-cooperative environment? How do you survive in a volatile and hostile economic environment that speaks a capitalist language? How do you adapt to new business models in the digital age, or how do you change while remaining consistent and pragmatic?
“The co-op needs to be rebuilt and reviewed every day.” — Arizmendiarrieta
What’s Mondragon’s next chapter?
Mondragon must reconsider how it creates value in its businesses, as well as how it interacts with its cooperative members and all other stakeholders. It has a valuable asset in the form of a living ecosystem, which allows it to conduct varied experiments; experiences that would revive its current local and global impact; and adaptation to current global and social trends that lead to greater sustainability and social, business, and environmental responsibility. What we have been doing up to now cannot be the ceiling that limits our future action. Fear of job loss or loss of profitability cannot deter us from taking risks, from dreaming and believing in a better world.
- Towards a digital economy and a platform cooperative paradigm
The recent global crisis caused by the COVID-19 pandemic has provided flexibility to service delivery, workforce hiring, and labor productivity, as well as a digital infrastructure that supports a wide range of digital interactions and innovation channels. Platform cooperatives are an example of how Mondragon’s nearly 70-year history can be combined with the opportunities presented by digital labor platforms today, in order to provide decent and ethical jobs.
“Platform cooperatives are businesses that primarily use a website, mobile app, or protocol to sell goods or services. They rely on democratic decision-making and shared ownership of the platform by workers and users. Today, this movement strengthens the backbone for workers to sustain themselves during difficult times while also keeping the idea of participatory democracy alive” ´The Platform Cooperatives Consortium PCC.
Although the Mondragon Corporation has not yet taken a formal strategic line in this regard, there are already initiatives such as the Platform Cooperatives Now! program, which is offered jointly by The Platform Cooperativism Consortium (PCC) at The New School in New York City (USA) and Mondragon University in Mondragon (Spain), and is an online course to introduce, incubate, and accelerate platform cooperatives. In addition, Mondragon University and Luvent Consulting offer the CoopWorks course, a two-month entrepreneurship program for early-stage team startups in the field of platform cooperatives.
Some examples of platform coops we can learn from right now include Katuma, a Spanish agricultural co-op platform that promotes ethical supply chains by purchasing directly from local agroecological producers. Eraman is a cooperative that provides bicycle-delivered home delivery services. Fairbnb is a sustainable travel accommodation platform that uses 50% of platform fees to fund a social project in the visited community.
- A regional ecosystem that supports the creation of platform cooperatives
There is so much to be done. We need an entire value chain to support the new platform cooperatives that are being formed, as well as financial and institutional support for these businesses that are up against stronger competitors with more resources and coverage.
Some of the measures suggested by PCC that can help in the Basque regional context and the Mondragon ecosystem -previous further analysis and context adaptation- may be:
- Procurement policies to provide preferential treatment of platform co-ops over privately-owned platforms
- Public solidarity lending to finance early-stage platform co-ops as part of national, regional, and municipal development strategies
- Public participation in multi-stakeholder co-ops via direct state ownership of co-op shares that provide a public voice in co-op management
- A new generation of cooperative members
We need young people who believe in change, are willing to invest in it, and are not afraid to try a new business model. Who are these people in Spain and the Basque Country in particular? What are their needs? How can we assist them in their endeavor? What kind of environment is required to launch a successful platform co-op? What is their real contribution to their community and region? How can Mondragon cooperative experience benefit platform cooperatives?
Our starting point
My research agenda for The New School’s Institute for the Cooperative Digital Economy’s 2022-2023 Fellowship Program is full of research questions, hope, and anticipation of creating something new. Something that can create value and wealth for more people who believe in doing business cooperatively and contributing to our community and society.