Promoting Worker Cooperatives as Drivers of Economic Growth within the Social and Solidarity Economy

Abstract

Achieving Sustainable Development Goal (SDG) 8, which emphasizes sustained, inclusive economic growth, full and productive employment, and decent work for all, is crucial for sustaining socio-economic development. The social and solidarity economy (SSE), as defined by UN resolution A/77/L.60, includes cooperatives, mutuals, associations, foundations, and social enterprises that prioritize collective interests over profit. Within this framework, worker cooperatives play a vital role in addressing these objectives. This paper examines the potential of worker cooperatives to drive economic growth, particularly within the context of Kenya, East Africa. Entrepreneurs, especially those in startups who are youth, face numerous obstacles, including difficulties in securing funding, limited resources, and intense competition. Additionally, regulatory hurdles and compliance issues complicate the formalization processes of these businesses. The worker cooperative model offers a collective approach where resources, skills, and efforts are pooled, thereby enhancing access to capital and fostering an environment conducive to skill development and innovation. This business model ensures democratic ownership and equitable profit distribution, addressing key challenges faced by young entrepreneurs. This paper explores the role of worker cooperatives in driving economic growth within the social and solidarity economy (SSE), focusing on the challenges faced by youth entrepreneurs in Kenya. It highlights how the worker cooperative model, characterized by democratic ownership and equitable profit distribution, can provide sustainable business solutions by enhancing access to capital, fostering innovation, and promoting skill development. Through case studies from the USAID Cooperative Development Program – CLEAR, FundiTech Service Worker Cooperative and Women in Sustainable Energy & Entrepreneurship (WISEe), the paper demonstrates the effectiveness of worker cooperatives in overcoming financial and regulatory barriers, formalizing businesses, and creating employment opportunities. The findings emphasize the importance of supportive legal frameworks, capacity-building programs, and targeted financial mechanisms to foster the growth and sustainability of worker cooperatives for the growth of the economy in Kenya.