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Donkin on Work - Co-operatives

January 1999 - Italian co-operative study

Do you ever wonder if you are working yourself into an early grave? If so, you might be interested in a study by David Erdal, chairman of Baxi Partnership, the employee-owned central heating boiler manufacturer in Bamber Bridge, Lancashire.

His idea was to test, using various measures, whether the quality of life in an egalitarian community was better than that of a conventional town.

He chose to explore his theories among the small towns surrounding the Italian city of Bologna. As Mr Erdal notes, life is good in this part of Italy. He was attracted to the region because of the large number of co-operative ventures in the area, many of which are over 100 years old. The co-ops are particularly thickly spread around Imola, a town of 60,000 people.

Some 18 per cent of Imola's working population is employed in co-operatives. More than a third of its families have at least one member working in a co-op. But in Sassuolo , a 40,000-strong community about 40 miles away, no one works in a co-op.

Imola has no great divide between rich and poor. But in Sassuolo the divide appears much greater.

Mr Erdal's theory is that co-operative ventures promote stronger, more peace-loving and healthier communities. His biggest problem has been persuading the good people of either town to return his questionnaires. A random sample of 1,500 names taken from the telephone directory has elicited just over 180 responses so far.

He has, however, collected other evidence, scouring newspapers for crime reports and checking death notifications. Early evidence points to greater voluntary work and more employee training in Imola.

But one clear difference has emerged between the communities. The citizens of Imola live longer than those in Sassuolo , with a 14 per cent lower mortality rate over the past six years. This may in part have something to do with diet. Further research would be needed to examine the reasons. But Mr Erdal seems certain of one point: "Employee share ownership makes you live longer. That's the main thing I want to bring out."

The finding tends to support some long-running research on Whitehall hierarchies by Michael Marmot, director of the International Centre for Health and Society at University College London. This research has discovered that people lower down a hierarchy are more likely to suffer heart attacks than those in the upper echelons.

Mr Erdal's finding was well received by delegates at the annual International Employee Ownership Conference, held in Oxford earlier this month. The conference was seeking ideas to put to Gordon Brown, the chancellor, who in November announced a consultation exercise looking at ways to extend employee share ownership.

One of the conference recommendations is to extend tax benefits available for the owners of family business seeking to pass on their shares within the family to those who want to transfer shares to employees.

Mr Erdal sold his shareholding in the family paper milling business, Tullis Russell, to employees in a leveraged buy-out deal where profits are used to buy the shares on behalf of employees. The sale allows him to pursue other interests, including a PhD based on his study of the Italian towns.

"The results at this stage are suggestive rather than final," says Mr Erdal who is continuing his research. "But the evidence so far is supporting the thesis that egalitarian communities are better than others in important ways. It should be said that Sassuolo is a very good place to live by international comparisons - but Imola is better."

© 1999 The Financial Times Ltd. All rights reserved

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