Social Innovation implications of the Mondragon cooperative experience


The Young Foundation has published a new report on the Mondragon Cooperative experience. These are some additional thoughts about the implications for the social innovation field.

  • Competitiveness can be the best ally for implementing large scale social innovation ecosystems
  • Value-based decisions are rooted in Mondragon’s business model
  • A distributed system for wealth generation combined with fair taxation systems presents a pre-distribution alternative to fighting inequalities
  • MONDRAGON needs to be looked at as a social movement

1.- Competitiveness.

MONDRAGON shows us that competitiveness can be the best ally for implementing large scale social innovation ecosystems. In fact, MONDRAGON believe that they are more competitive because their social principles and practices.

Since the very first day Mondragon had to learn to compete head to head with large industrial companies in order to fulfil its social mission effectively. This is the reason why competitiveness has been naturally incorporated to its social innovation narrative and action. In fact, and despite its clear social impact, members of Mondragon prefer to be defined as a competitive company in the global market, rather than as a social, traditional company.

The social dimension of its functioning is not perceived as a peripheral element. To the contrary, it is rooted in Mondragon’s business model. This particular behaviour is consistent with various research demonstrating the greater impact of long term value-based-decisions, in opposition to exclusively instrumental decisions. In the case of Mondragon, its value system determines the company’s strategic decisions.

Mondragon´s social dimension is therefore inherently connected to competitiveness and differs with the traditional approaches to corporate social responsibility. Mondragon is not only a good company that distributes its benefits fairly. It is a more competitive company due to its social practices.

  1. – Mondragon as a social movement.

Mondragon has operated as a genuine social movement for the transformation of the valley with a great impact in the whole Basque territory. The logic and mechanisms connecting Mondragon under the corporation’s big umbrella – people, enterprises and institutions – cannot be exclusively understood from a traditional business approach.  The cooperative members feel part of something bigger than just a company. Some of then describe it as an experience, others as a family or a network, but its origin clearly responds to the necessity of creating a movement in favor of the social and economic transformation of the territory.

In practical terms, this movement approach has allowed them to channel internal competition in a positive way, as well as to maximize existing resources, align different strategies and constructing a transformation narrative that connects all the agents within the ecosystem in a deeper way, as compared to traditional corporate practices.

When seeking to understand Mondragon and other high-impact social innovation ecosystems, it is essential to look into the perspectives and the repertoire of actions associated to social movements. This allows different organizations and institutions to network collaboratively without the need of establishing rigid structures or complex legal agreements around a more sophisticated leadership (soft power), as well as performing radical democracy practices, based on values, common goals and narratives.

  1. – Replication.

 Mondragon cannot be dissociated from its territory. These cooperatives were born as a social and economic response to the necessities of a community that was struggling with an extremely difficult situation. For this reason, Mondragon’s cooperatives and companies are deeply tied to the valley’s little towns and neighbourhoods. This close connection leads them to a value based decision-making process that differs from traditional companies, especially with regard to long-term investments, creating a very resilient model.

For all these reasons, Mondragon cannot be replicated. In fact, many attempts to create similar experiences have systematically failed. However, this experience can help us better understand how social innovation ecosystems work and can also be an exceptional ally to other organizations and institutions who wish to foster territorial transformation processes incorporating large-scale and globally competitive business models.

For this purpose, it is absolutely necessary that systems change thinking and social innovation incorporate new methodologies to address the cultural dimension of territorial transformation processes. Ethnographic research aiming at capturing the value system and narratives operating in a particular territory can be a useful way to capture the “innovation software”. This knowledge will allow us to connect specific and interconnected initiatives (hardware) with the real demands of the community; but to that end, new methodologies that exponentially grow the number of people taking part in co-creation will need to be designed.

  1. – A new model of community innovation.

Mondragon cooperatives question and challenge the myth of the individual entrepreneur which is being uncritically adopted by many social innovation initiatives[1]. Instead of looking for the “talented” individual, implying that this is an exceptional gift, Mondragon proves that everyone can be innovative if the proper conditions are created. As a matter of fact, the company’s Founder used to talk about a “positive attitude” as the only required talent for innovation.

This way of understanding innovation at a community level is consistent with extensive research on community transformation processes[2].  Systemic changes can only take place when the community as a whole feels invited and empowered to act differently.

  1. – Distribution of wealth.

While the taxation system is similar to the European average, the Mondragon Valley and the Basque Country have enjoyed high equality rates for decades. The situation has changed since 2008 due to the financial crisis but this data allows us to think that it is possible to complement the necessary distribution of wealth through taxes with the generation of wealth in a distributed manner. Their salary policy, networking and cooperation mechanisms help to provide real and large scale “pre-distribution[2]” of wealth.

This is an example of how successful business can fairly generate and distribute wealth among companies and members to tackle the current rampant inequality.  The generation of distributed wealth combined with fair taxation systems becomes a vehicle for socioeconomic regional transformation. It also broadens our concept of how social innovation ecosystems can integrate wealth generation as a key mechanism for systemic change.

For the future, distributed manufacturing and other technological phenomena associated to cyber-industry will enable alternative models to foster competitive and socially balanced territories. Mondragon created 1000 new jobs last year, evidencing that industrial automation can also generate employment and equity.

  1. – Links with the local territory.

Mondragon cannot be understood dissociated from its territory. Cooperatives were born as a social and economic response to the necessities of a community that was struggling with an extremely difficult situation. For this reason, Mondragon’s cooperatives and companies are deeply tied to the valley’s little towns and neighborhoods. This close connection leads them to an alternative decision-making process that differs from traditional companies, especially with regard to long-term investments, and creates a very resilient model.

The companies of Mondragon are used to deliver positive responses to great crisis, such as the Fagor Electrodomésticos downturn or their very own birth. However, they present more difficulties to innovate in times of stability. It is easier for them to generate solidarity mechanisms when facing a specific difficulty or a common enemy than being open to new innovation systems when things are going well. The big challenge for social innovation ecosystems that have achieved good results in particular moments is to constantly reinvent themselves.

  1. – Equality.

The innovation ecosystem generated by Mondragon consists in a complex agent-network and several processes that operate on the basis of transparency, radical democracy and equality. These concepts are commonly used in the social innovation field, but unfortunately, there are few examples of successful, large scale business projects that incorporate principles such as: “one person, one vote”; sovereignty of the general assembly in strategic decisions; internal solidarity mechanisms; re-employment policies; commitment to low salary gaps, etc.

These strict transparency and democracy procedures could not exist without the commitment to equality between people and companies conforming Mondragon. It is impossible to understand the way public-private cooperation develops so naturally if we don’t take this core principle into account. By contrast, public-private collaborations which does not incorporate equality mechanisms and procedures can be easily manipulated in favor of the most powerful.

Mondragon’s experience presents deep implications to the way in which social innovation projects incorporate the fight against inequality to their narrative and actions. The best ally for the growing inequality is accepting the lack of alternatives. This experience shows us that competitive, large-scale models of fight against inequality are possible.

[1] The Entrepreneurial State. Mazzucato, M.

[2] “Bowling alone” Putnam, R.

[3] “The institutional foundations of middle-class democracy” Hacker, J.

La Innovación Social de Mondragón

cropped-img_1711.jpgThe Young Foundation acaba de publicar un informe sobre el impacto de las cooperativas de Mondragón desde el punto de vista de la Innovación social. Estas son algunas reflexiones adicionales sobre las implicaciones que tiene esta experiencia del denominado Caso Vasco y sus posibilidades para ser proyectada hacia el futuro.

1.- Competitividad.

Las cooperativas de Mondragón tuvieron que aprender a competir con grandes empresas industriales de igual a igual para poder cumplir con su misión social desde el primer día. Por este motivo, incorpora la competitividad al discurso y acción de la innovación social de forma natural. De hecho, sus miembros prefieren definirse como parte de una empresa capaz de competir en el mercado global más que como una empresa social tradicional a pesar de su evidente impacto socio-económico.

Sin embargo, la dimensión social de su funcionamiento (las prácticas sociales presentadas en este informe) no se entienden como un elemento secundario. Están enraizadas en el modelo de negocio. Este comportamiento avala los estudios que evidencian el mayor impacto de las decisiones fundamentadas en valores respecto a las decisiones exclusivamente instrumentales en el medio y largo plazo. Mondragón evidencia la centralidad del sistema de valores a la hora de comprender sus decisiones estratégicas.

La dimensión social está, por lo tanto, intrínsecamente unida a la competitividad y se diferencia de los planteamientos tradicionales ligados a la Responsabilidad Social Corporativa. Mondragón no es sólo una buena empresa que distribuye mejor sus beneficios; la corporación es más competitiva gracias a sus prácticas sociales.

2.- Mondragón como movimiento social.

Mondragón es una red de empresas sociales pero también ha funcionado como un verdadero movimiento de transformación en el territorio. Las lógicas e instrumentos que han conectado a las personas, empresas e instituciones del territorio bajo el paraguas de la corporación no pueden comprenderse exclusivamente desde una perspectiva de empresarial tradicional. Los miembros de las cooperativas expresan claramente que se sienten parte de algo más que una empresa. Algunos lo definen como una experiencia, otros como familia o red, pero su comportamiento responde a la necesidad de generar un movimiento de transformación socio-económica en el territorio.

En términos prácticos, este funcionamiento como movimiento permite canalizar la competencia interna de forma positiva, maximizar los recursos existentes, alinear las diferentes estrategias en una misma dirección y construir una narrativa de transformación que conecta a todos los agentes del ecosistema de una forma más profunda que las prácticas corporativas tradicionales.

Es fundamental a la hora de comprender Mondragón y otros ecosistemas de innovación social de gran impacto que incorporemos la perspectiva y repertorio de actuación asociado a los movimientos sociales en el siglo XXI. El funcionamiento como movimiento de transformación permite a organizaciones e instituciones trabajar colaborativamente en red pero sin la necesidad de establecer estructuras rígidas o complejos acuerdos legales en torno a un liderazgo más sofisticado (soft power) y prácticas de democracia radical que se construyen sobre objetivos, valores y discursos compartidos.

3.- Réplica.

El ecosistema de Mondragón no puede replicarse miméticamente por la complejidad de factores culturales que condicionan su desarrollo. De hecho, han existido muchos intentos fallidos por crear experiencias similares. Sin embargo, su experiencia puede ayudarnos a comprender mejor el funcionamiento de los ecosistemas de innovación social y sobre todo puede ser un aliado excepcional para otras organizaciones e instituciones que deseen impulsar procesos de transformación territorial que deseen incorporar modelos de negocio competitivos en el mercado global y de larga escala.

Con este objetivo, es absolutamente necesario que la innovación social incorpore nuevas metodologías para incorporar la dimensión cultural a los procesos de transformación territorial. La investigación etnográfica sobre el sistema de valores y narrativas que están operando en un territorio (software del proceso de innovación) nos puede ayudar para conectar las iniciativas concretas (hardware) con las demandas reales de la comunidad pero necesitamos nuevas metodologías que aumenten exponencialmente el número de personas que participan en los procesos de co-creación y prototipado de nuevos productos y servicios.

4.- Un nuevo modelo de innovación comunitaria.

Mondragón pone en cuestión el mito del emprendedor individual a la hora de generar procesos de transformación territorial que está siendo adoptado de forma acrítica por muchas iniciativas de innovación social[1].

En lugar de buscar el “talento” en personas excepcionales, Mondragón demuestra que todas las personas pueden comportarse de forma innovadora si se generan las condiciones para ello. De hecho, su fundador hablaba de la actitud positiva de la persona como el único requisito necesario para innovar.

Esta forma de entender la innovación en el ámbito comunitario es consistente con muchas otras investigaciones desarrolladas en otros procesos de transformación comunitaria. Los cambios sistémicos sólo se producen cuando el conjunto de la comunidad se siente invitado o empoderado a actuar de una forma diferente.

5.- Distribución de la riqueza.

El valle de Mondragón y Euskal Herria en general presentan altas tasas de equidad a pesar de que el sistema impositivo sea similar a la media europea. Desde 2008 se ha producido un cambio de tendencia muy negativo hacia mayores cotas de desigualdad pero la experiencia vivida nos permite pensar que se puede complementar la necesaria distribución de la riqueza a través de los impuestos con la generación de la riqueza de forma distribuida. Su política de salarios, el trabajo en red, los mecanismos de inter-cooperación reparten la riqueza desde su origen y evitan las tendencias hacia la desigualdad.

De cara al futuro, la manufactura distribuida y otros fenómenos tecnológicos asociados a la Industria 4.0 permitirán desarrollar modelos alternativos para impulsar territorios competitivos y equilibrados socialmente si se complementan con ecosistemas de innovación social similares al generado por las cooperativas. La robotización puede ser aprovechada positivamente si se aplican los principios de la producción distribuida y se combinan con las prácticas de la economía social.

6.- Vinculación al territorio.

Mondragón no puede entenderse de forma disociada al territorio. Las cooperativas nacen como una respuesta socio-económica a las necesidades de una comunidad que estaba sufriendo una situación de dificultad extrema. Por este motivo, sus empresas están ancladas de forma profunda en sus pueblos y barrios. Esta relación les lleva a tomar decisiones diferentes a empresas tradicionales en relación con las inversiones a largo plazo y genera un modelo verdaderamente resiliente.

Las empresas de Mondragón están acostumbradas a responder muy positivamente a grandes momentos de crisis como la de su nacimiento o la de Fagor Electrodomésticos pero tienen más dificultades para innovar en momentos de estabilidad. Es más fácil generar mecanismos de solidaridad interna ante una dificultad o enemigo común que abrirse a nuevos sistemas de innovación abierta y cooperación cuando las cosas no van tan mal. El gran reto de los ecosistemas de innovación social que han conseguido buenos resultados en determinados momentos es reinventarse constantemente.

7.- La igualdad.

El ecosistema de innovación generado por Mondragón está compuesto por una compleja red de agentes y procesos que funcionan en base a criterios de transparencia, democracia radical e igualdad.

Se trata de conceptos a los que nos referimos desde la innovación social con mucha frecuencia pero desgraciadamente existen muy pocos ejemplos a nivel internacional de proyectos empresariales tan grandes y exitosos que incorporen principios de funcionamiento como el de “una persona, un voto”, la soberanía de la asamblea de miembros a la hora de tomar las decisiones estratégicas, los mecanismos de solidaridad interna, las políticas de recolocación de los trabajadores o la apuesta por el equilibrio salarial.

Estos estrictos procedimientos de transparencia y democracia no se podrían construir sin el compromiso con la igualdad entre las personas y organizaciones que forman la corporación. Resulta imposible entender la forma en la que la cooperación publico privada se desarrolla de forma tan natural sin este elemento transversal al sistema de valores. Por el contrario, la cooperación público privada puede ser fácilmente manipulada en otro tipo de colaboraciones en las que no se pueden construir mecanismos y procedimientos de igualdad entre los agentes.

Esta experiencia tiene unas implicaciones profundas de cara a la forma en la que los proyectos de innovación social incorporan la lucha contra la desigualdad no sólo en su discurso sino en la acción interna de cada día.

Mondragón nos demuestra que tanto a nivel organizativo, en el modelo de empresa pero también en el ámbito territorial, se pueden construir modelos de lucha contra la desigualdad que son competitivos y de larga escala.

El principal obstáculo en la lucha contra la desigualdad es pensar que no hay alternativa.

[1] “The Entrepreneurial State”. Mazzucato, M.

Presentation of the Mondragon report


Founded in the Basque Country, the MONDRAGON Corporation has become a highly successful global business, owned and governed by its worker-members, with social benefit at its core.  This new research tells their story and explores how they have developed as a social innovation ecosystem. This has important implications for how businesses can both be competitive in the marketplace and generate social value.
The event will include a presentation of the research findings from both MONDRAGON representatives and the Young Foundation, and speakers including Ed Mayo, Secretary General of Co-operatives UK. This will be followed by a discussion on the key learnings for UK and international policy and practice.

DATE: Wednesday 5th April 9: 30-11:30 am (Presentations at 10:00 am following breakfast)

VENUE: The Convocation Hall, Church House, Dean’s Yard, Great Smith St, London, SW1P 3NZ

Places are limited so please RSVP to Nilufa Jahan by Friday 31st March 2017 at

17th Annual Lax Conference. Swarthmore College

1280px-Formal_Logo_of_Swarthmore_College,_Swarthmore,_PA,_USA.svgThe Jonathan R. Lax ’71 Conference on Entrepreneurship returns for its 17th year on Saturday, aiming to align the interests of business and society. The annual conference will feature a panel discussion, networking opportunities, and the popular SwatTank Student Innovation competition. The theme of the day is shared or sustainable value — that is, businesses actively changing their practices to not only do good business but good for society.

“It’s really a blended approach to business, merging commercial goals and social values, to create greater impact,” says Denise Crossan, Eugene M. Lang Visiting Professor for Issues in Social Change, who tapped colleagues within The Young Foundation, a nonprofit think tank in London that uses social innovation to ease inequities, and the European Union for the conference.

Among them is Baroness Glenys Thornton, CEO of the Young Foundation, who helped to pass the Equality Act of 2010 and contributed to the Equal Marriage Act, Forced Marriage Act, and legislation on violence against women in the UK.

Gorka Espiau, director of places and international affairs at The Young Foundation, will also participate. As head of the foundation’s Places program, Espiau fosters innovation and creative partnerships to tackle inequality and promote urban growth around the world.

At Espiau’s recommendation, Ibon Zugasti, director of social innovation research and development at Mondragon Engineering and Business Solutions, will also appear. Zugasti guides strategic planning of new business opportunities and product development with an eye toward finding solutions to social issues.

A fourth speaker is Juan José Ibarretxe, who was elected to the Basque Parliament in 1986 and served as president of Spain’s Basque Autonomous Community from 1999 to 2009.

“It’s a wonderful array of people used to putting people first, investing social values in business, and working to create impactful social change within communities and countries,” says Crossan.

Thornton will also serve as a judge of the fourth annual Swat Tank competition, which features presentations from the competition’s three teams of student finalists. There will also be a panel discussion, moderated by Espiau, on the reinvention of capitalism.

Among the other speakers at the conference are Steve Dean ’11, the co-founder of Jobsuitors, a platform that takes the algorithms and principles of the online dating industry and applies them to recruiting in order to match job seekers to their best-fit employers; Eleanor Joseph ’07, the co-founder and CEO of Ubuntu Capital, which empowers individuals and small and medium-sized companies in emerging markets to develop their businesses; and Christopher Leinberger ’72, a land-use strategist, professor, developer, researcher, and author, who balances business realities with social and environmental concerns.

The conference will also have affinity lunches to engage students, parents, and alumni in lively conversation, and discussion groups exploring shared value in entrepreneurship, organizational management, and the field of social investing. Crossan sees the conference as a response to growing interest among the College community in social innovation and social entrepreneurship.

“There’s a huge opportunity for students in particular to understand and explore how they can go forward in their post-grad careers, embracing the idea of thriving in the world of business, whilst remaining true to the strong principles and social values they acquire at Swarthmore,” she says.

“Liberal arts thinking meets entrepreneurship in a social values context — there’s a lovely marriage there.”

About the Lax Conference

While at Swarthmore, Jonathan R. Lax ’71 created a mutual fund that he ran from his dorm room, one of many businesses he would start, and run, successfully. The Lax Conference honors his entrepreneurial spirit and practical nature by bringing together intellectual discussion with pragmatic conversations about starting and sustaining an entrepreneurial venture. Each year, the Conference attracts approximately 150 alumni, students, and friends who come to discuss entrepreneurship in all forms.

Peace Tech Lab

This week, all Peace Tech Lab partners are meeting in Derry. Apart form the first partners meeting, we will experience a “maker” workshop. It is  Basic idea to pose a problem and go into the FabLab and work on it together. We will also invite some outside people interested in the lab to join us. We thought this was a good way to get to know each other and test out the potential of the “lab”.

<p><a href=”″>PeaceTech Lab Introduction (video credit: INCORE)</a> from <a href=”″>Agirre Center</a> on <a href=””>Vimeo</a&gt;.</p>