by Jessica Rose
Jessica Bonanno, Director of Employee Ownership Programs, The Democracy Collaborative and Marjorie Kelly, Executive Vice President and Senior Fellow, The Democracy Collaborative
The moment is right for employee business ownership to go to scale. The models are tested and proven, the increasing struggles of American families makes the need apparent, and the baby boomer retirement wave presents a once-in-a-lifetime surge in demand for a variety of business transition options. Moreover, in times of political gridlock, employee ownership is a rare economic concept with bipartisan appeal. But despite, the number of employee-owned businesses in the U.S. has been relatively stagnant for decades. Why?
We surveyed almost 50 leading experts across the country and asked that very question and — what we found was encouraging: The barriers are clear and addressable and solutions are within reach, if advocates come together across sectors and work strategically.
To help catalyze a movement to seize on this tremendous opportunity, The Democracy Collaborative (TDC) has joined with The National Center for Employee Ownership (NCEO), The Democracy at Work Institute (DAWI), The ICA Group, Certified Employee-Owned, and others to launch the initiative Fifty by Fifty, aimed at designing disruptive innovations to address known barriers to scale with an ultimate goal of catalyzing the creation of 50 million employee owners by 2050. This would fundamentally transform ownership of our economy, creating the opportunity for millions more families to enjoy greater financial stability, increased income, and greater retirement security.
We face an opportunity to bend the curve of history.
Our nation is at a crossroads, facing two paths to the future. Fortunately, we stand on the cusp of a powerful opportunity to seize on demographic momentum:
Over the next two decades, there will be a massive wave of retirement by baby boom entrepreneurs, which will include at least 7 million owners of privately held businesses, many of whom will want to sell or liquidate their businesses within the next two decades. This represents a substantial opportunity to transition ownership of many of these businesses to employee ownership.
If many of today’s baby boomer-owned businesses are closed, or are purchased by traditional private equity and strategic acquirers who live outside their communities, businesses will shutter, workers will lose their jobs, and communities will suffer. Our nation will become further divided. This can happen if employee ownership remains as invisible as it is today.
But if more of these businesses become employee-owned, it can reverse this looming threat and turn it into an incredible opportunity to rebuild a strong U.S. economy where all can prosper. An America where employee ownership represents a major percentage of private business ownership will be an America with fewer layoffs, greater economic security for more families, and more stable communities. The middle class can begin to be restored, the American Dream begin to be revived.
We believe in this hopeful future. Taking employee ownership to scale is a strategy that could bend the curve of history — helping to reverse decades-long trends in rising inequality, decreasing real incomes, and community disinvestment. And we believe that the combined intelligence of the Fifty by Fifty network and our allies can devise effective strategies to put this concept on the map in a way it has not been. We see the potential that is possible through our collective action — if we work smart, transcend historic divisions, and focus on evidence-based solutions.
Let’s make it happen — together.
Building a movement for employee ownership at the scale necessary to achieve real change will be the work of many of hands working towards a common goal. As part of this growing ecosystem, Fifty by Fifty is working to identify the key gaps in strategic capacity, bringing missing stakeholders and resources into the conversation and movement, with networked communications efforts to accelerate knowledge and uptake of employee ownership strategies. For instance, after hearing from our network partners about the strategic value of investment products designed to drive successful employee ownership transitions, we worked with the Beyster Foundation for Enterprise Development to identify the tremendous untapped opportunities for impact investors to support the shift toward broad-based ownership. We are likewise developing a strategic vision for accelerating at-scale awareness of employee ownership across key markets and sectors in the business transition landscape.
To help build a bigger conversation about the strategies needed to scale employee ownership, we’re happy to announce that in addition to our website, fiftybyfifty.org, we are launching a new collaborative blog as a publication hosted on Medium. Through this new space for news, discussion, and analysis, we hope to lift up some of the best and most innovative voices at the forefront of the movement for employee ownership, creating a space where ESOP and worker cooperative promoters, aligned stakeholders in the community or economic development or philanthropic fields, and others can share lessons learned and co-create the ideas that will help drive us towards 50 million employee owners by 2050. We hope you subscribe by following ushere on Medium, and we encourage you to read our first contributed post, from Thomas Dudley of Certified Employee Owned: “How Big is America’s Employee-Owned Economy?”