Employee-owned firms are more productive than conventional firms in a number of sectors, says a report into worker co-operatives.

What do we really know about worker co-operatives?, published by Co-operatives UK, compares worker co-ops with conventional businesses, analysing productivity levels and challenging some of the assumptions.

“Worker co-operatives have traditionally been viewed as small, specialised and undercapitalised organisations,” said Virginie Pérotin, professor of economics at Leeds University Business School, who authored the report.

“It is commonly thought they thrive in unusual conditions and cannot possibly constitute a serious alternative to conventional firms.

“While this view has long been shared by many economists studying labour-managed firms … evidence suggests common ideas about worker co-operatives should urgently be revised.”

One assumption addressed by the report is the size of worker co-ops.

“It is often thought worker co-operatives must be financially constrained, and a small size is sometimes regarded as a condition for workplace democracy to function,” writes Prof Pérotin.

But what is not widely understood, she says, is that most firms are very small – 93.7% of UK firms have fewer than 20 employees. And where data for worker co-ops is available, they are actually larger than other firms.

“Worker co-operatives could be larger because they are created larger, or because they grow faster and/or survive longer than conventional firms,” she says.

While worker co-operatives represent a very small proportion of all firms in most countries, adds Prof Pérotin, they are more numerous than is usually thought. At least 25,000 can be found in Italy, about 17,000 (employing some 210,000 people) in Spain, 2,600 (employing 51,000 people) in France and about 500 to 600 in the UK.