Dire economic times may call for different, if not drastic, measures. And while this recession too will end, it's become clear, some business leaders say, that rethinking how and what we build for our economic future might work best as a community exercise.
The idea, said Deborah Grobon Olson, an attorney who heads the non-profit Center for
Community Based Enterprise, is to connect entrepreneurs with the wealth of local resources available in Metro Detroit to create new businesses in ways that root them in the community for long-term success.
Traditionally, economic development involves attracting new businesses and fomenting entrepreneurship at home, she says. But both of those avenues don't necessarily support sustained revival of a community, she explains.
"The model of entrepreneurs in the U.S. celebrates the image of the do-it-alone cowboy," she said. And big corporations who locate in a city are primarily interested in their own financial health, says Olson.
Metro Detroit's economic fate has historically hinged on a short-list of very large corporations that if they start growing again will likely grow somewhere else. The time is ripe, Olson says, to make a local economy in a grassroots way. "We need businesses and entrepreneurs that are rooted here, in the community."
Olson claims that employee-owned businesses, or other models of community-based businesses, could do far more to help revive the sputtering local economy while keeping an economic engine chugging into the future. She defines locally based business models as those that have sustainable revenue models, are committed to paying living wages and are located in the community they serve.
Olson has nearly 30 years of experience as an employee-side ownership attorney, creating and advising employee-owned companies and cooperatives. But she says that the group is "agnostic" about the form the businesses take.
The more important thing, she explains, is that we find new ways to "corral the talent that exists here," with the "facilities, high-tech machinery and intellectual capital," that's sitting idle as a result of failed enterprises.
If there's one thing Southeast Michigan has, Olson adds, it's plenty of people who know how to innovate, design and make things. Why not use that talent to build something sustainable?
She's not the only one that sees the value of such a model. Harriet Saperstein, a Center board member and former president of
HP Devco, an economic development organization in Highland Park agrees.
"I see it as an important alternative," Saperstein says. "It's not a substitute," but it can get people thinking about how working cooperatively can retain regional talent and keep dollars at home.
Such models have worked elsewhereThe
Mondragón cooperatives in the Basque region of Spain are perhaps the best cited example of how a co-op system might work. Created in 1956, the Mondragón co-ops took a region devastated by the Spanish Civil War and turned it into an economic powerhouse with more than 90,000 workers. In 2008 the co-ops had annual sales of nearly 16.8 billion euros.
According to the corporation's
website, their success started with a priest named Jose Maria Arizmendiarrieta who in the early 1940s established a vocational school for the many working-class children in the region who would otherwise have no chance at education. A handful of those children went on to win engineering degrees and in 1956, started a factory in Mondragón that launched the region's first coop.
Pressured by governmental regulations, the fledgling co-op created its own banking system that used community member deposits to fund co-op members, creating and keeping jobs in the region. This and other co-op strategies helped Mondragón create 120 diverse cooperatives including businesses in the industrial, agricultural, research, education and services sectors.
When hard financial times would fall on one sector, workers could be retrained and deployed to another, instead of suffering job loss. Resources are consistently funneled into education and development, the massive coop's financial documents show, so that the organization doesn't stagnate or lose its competitive edge.
The idea, Olson says, is to continue to create business-minded ventures that can and do succeed, but to do it in a way that continues to distribute equity to workers and the overall community, even in hard times.
"When you're making money and getting mature, you don't fire yourself," Olson said. "You look for the next, new thing [to make yourself competitive]."
Bologna, Italy is another example. That region's co-ops are legion, but have spurred intellectual property development on a per capita pace that would make Silicon Valley blush. The region has just seven percent of the country's population, but claims about 30 percent of the patents.
There are also examples closer to homeJohn Logue is a professor at
Kent State University and executive director of that institution's
Ohio Employee Ownership Center. The non-profit center was created in 1987 to provide outreach, information and start-up technical assistance to Ohio employees and business owners interested in employee ownership.
The Center operates with an annual budget of just $550,000, but estimates that it helps create about $60 in new employee-owner wealth for every $1 they spend on developing community-based companies.
The Center's network includes about 80 Ohio-based employee-owned companies that receive ongoing training and shared best practices through the center. Through mutual support, that network limited its job loss during the past decade to just one percent, compared to the 29 percent hemorrhaging experienced by manufacturing companies throughout the state.
Even if you had a group of rock star entrepreneurs like Bill Gates, he said, you'd still need community-based enterprises, because not everyone has the high-tech skill sets to work for Bill Gates. Robust communities demand a diverse array of skills and talents that can help support each other for success.
In a co-op model, Olson says "each business doesn't have to know everything."
It's the type of network that Gregg Newsom, co-founder of Detroit-based
Detroit Evolution, a mission-minded small business that aims to create a holistic health change in the city, wishes existed when he and his wife and partner, Angela Kasmala Newsom started out.
Several years ago the pair began offering a robust array of health-oriented services - ranging from massage and yoga classes, to raw and vegan cooking classes and catering. They used profits from their business offerings to delve deep into the community, teaching people how to eat healthfully, or working with nonprofits to move the needle on other issues around sustainable and healthful living. But before long, Newsom says, they realized they needed help.
"We’re not accountants; we have great talent and good hearts, but to have that backbone, that support structure, would be a big boon to businesses like ours."
Detroit Evolution has regrouped, still offering their popular offerings and has even expanded their involvement with organizations such as the
Great Lakes Bioneers Detroit. But is moving forward with the awareness that if the core business is to help the community, then it has to be financially sound.
Still, there are challenges to creating a grassroots business network in Detroit. Olson explains that the skeleton company to build a group of collaborating businesses has been established, and they're eyeing a handful of products to launch their concept.
But people still need to be educated on how such a structure operates, and how they might fit well within it.
"Part of the challenge is the culture," said Michael Friedman, a partner with Detroit-based law firm
Honigman Miller Schwartz & Cohn and chair of the Center advisory board. "Everything is based on individual success."
And the time and energy of the group of like-minded people who are pushing to bring this model to the fore is limited, Olson says.
The group hosted a series of events in Detroit in late September featuring speakers from the Mondragón cooperative and John Logue from the Ohio Center. More than 300 people showed up, eager to hear how they might participate.
But answers about next steps are still not clear, and new business structures may need to be accommodated depending on which form the coop chooses.
Even successful coops such as Mondragón have drawn critiques from some who argue that very large cooperatives become unwieldy, and often begin to look like traditional corporations with centralized decision-making and ventures with conventional companies that don't uphold the coop ideals.
But in Metro Detroit, there is a growing sense that drawing ideas from outside conventional lines is where we may find our greatest opportunity.
A new Birmingham-based nonprofit called the
Collaborative Group launched in early October with the idea of collecting a group of the area's leading thinkers and entrepreneurs to spur economic development in the region.
The group hasn't yet settled on a specific project, said Kerry Doman, founder of
After 5 Detroit and a member of the group's board. Rather, she said, they're working to discover, "If we take all of these people that have found success in their areas and put them all in a room; what could we come up with?"
The hope, Olson says of her group asking the same question, is that it be something that benefits us as a region.
"There are practical ways to do this," she explains. "We're focused on making things better for all of us."
Michelle Martinez is a freelance writer and editor who has reported on Metro Detroit businesses and issues for five years. Her previous article was The State Of Metro Recycling.
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Photos:
Deborah Grobon Olson, of CB2E, discusses with resdents how to build community based businesses at the Grandmont Rosedale Community House - Detroit
At her home, Deborah Grobon Olson, an attorney who heads the non-profit Center for
Community Based EnterpriseGrandmont Rosedale residents attend the GRDC meeting Grandmont Rosedale Community House - Detroit
Pastor Cory Chavis, at the New Straight Baptist Church, discusses ways to redevelop the community with resdients and investors, through the Starlight Community Revitalization Group ( SCRG )
Wife and Husband team and founders of
Detroit Evolution , Angela Kasmala and Gregg Newsom with their son Aya, offer their health conscientious services as an opensource based business - Detroit
Tom Goddeeris, Executive Director at Grandmont Rosedale introduces Deb Olson a the GDRC Community House - Detroit
Kerry Doman, founder of
After 5 Detroit
Photographs by Detroit Photographer Marvin Shaouni Marvin Shaouni is the Managing Photographer for Metromode & Model D Contact Marvin
here