Community-Based Cooperatives: A New Business Model for the Development of Italian Inner Areas

Abstract

Italian municipalities distant from main service supply hubs are defined by the Development Ministry as “inner areas”. A new business model, called community-based cooperatives, has recently developed in these areas. The name itself highlights the strong link between these firms and the local population. Their essential features are the pursuit of general interest and the creation of partnerships. This research explores the potential contribution of these enterprises to the growth of Italian inner areas. The data come from a direct survey, and the methodology includes text analysis techniques and correspondence analysis to create useful concept maps that define the paths that community-based cooperatives can take to regenerate their territories. The results highlight the critical issues of inner areas and the needs of their communities, together with the potential fields of business for the establishment of a community-based cooperative. In conclusion, these new firms may lead to real and enduring benefits to local communities. They could also contribute to demographic decline inversion by introducing new practices that reduce inequalities, enhance social, natural, and artificial capital, and boost the sustainable development process.

1. Introduction

Inner areas (IAs) are municipalities that are distant from cities but capable of offering some essential services, which condition the standard of living for residents and their degree of social inclusion [1].

In recent years, IAs have been the subject of a public intervention, called the Strategia Nazionale per le Aree Interne (Inner Areas National Strategy; SNAI) [2]. The SNAI is founded on a place-based approach [3], and its main purpose is to invert the negative demographic trend afflicting IAs.

The SNAI approach to IA classification relies on two phases: (1) detection of the so-called poles and inter-municipal poles, where essential services (health, education, mobility) are concentrated; and (2) classification of the remaining municipalities into four groups: urban belt areas, intermediate areas, peripheral areas, and ultra-peripheral areas. The last three groups form inner areas (Figure 1): they are identified on the basis of their respective distance from poles, calculated as the time (in minutes) required to reach the nearest pole. In particular, intermediate areas are those that are between 20 and 40 min away from their nearest pole; peripheral areas are between 40 and 75 min away; and ultra-peripheral areas are more than 75 min away.

When the SNAI was defined, the groups constituting IAs consisted of 4185 municipalities (almost 52% of total Italian municipalities), and more than 13 million people (approximately 22% of the national population) lived there.

The rationale underpinning the classification methodology is overcoming the traditional city–countryside dualism. The centre may be a little town or even several neighbouring towns, provided they are capable of offering essential public services. On the other hand, a city can be classified as an inner area if it is not able to offer adequate citizenship services.

In Italian IAs, a new entrepreneurial model has recently developed, called community-based cooperatives (CBCs) [4,5]. The name stresses the strong link between these organisations and local populations, which constitute the fundamental element of their mission and for their management models [6,7]. They are established in marginal settings, devoid of public or private investments that can raise their socio-economic potential [8]. In rural and peripheral areas, CBCs satisfy the needs of the community [9] with the purpose of preserving the social fabric, trying to counteract depopulation [10]. CBCs are resilience factors with a key role in the community [11,12].

The essential features of CBCs are the pursuit of general interest, the local community, and the creation of partnerships. The core business of CBCs is to maximise community wellbeing [13], and this involves a close relationship between businesses and social and environmental values [14]. As a consequence, they exist as associations that are transforming into companies to fulfil common interests. CBCs are a form of hybrid enterprise [15] that refer to a variety of rationales [16]. In the non-profit sector, for example, the term “hybridization” refers to complex organisational forms arising as voluntary, charitable, and confrontational differentiated tasks [17]. CBCs pursue many purposes related to services provided to the community [18] and synthesise the links among entrepreneurial, community, and social changes [19]. As a consequence, they can be considered as a structural component of businesses’ biodiversity [20].

In Europe, community enterprises such as CBCs are rather widespread phenomena. Community-based enterprises similar to CBCs can be found in Great Britain [21,22], France [23], and Germany [24].

In Italy, CBCs are a longstanding tradition [25]. Examples of CBCs are represented by social cooperatives and energy sector cooperatives. However, the wide spread of CBCs on a national basis only started in 2011, following the signing of an agreement between Legacoop (Union of Cooperatives), Associazione Borghi Autentici (Genuine Hamlets Association) and Legambiente [26]. This agreement aimed at encouraging the spread of CBCs, particularly after the reduction of the welfare state, the so-called “deflagration of the public sector” [27].

Modern CBCs are different from earlier ones in regards to their social basis, business sectors, organisational models, and governance [28]. Their main feature is sustainability [29], which involves environmental and socioeconomic issues impacting on future generations [30,31]. In particular, environmental sustainability denotes the ability to retain the capability of reproduction of natural resources; social sustainability indicates the capacity to ensure the equal development of human capital (with respect to class and gender); and economic sustainability implies the capacity to generate income and employment [32]. These aspects are supplemented by an institutional component: the ability to ensure democracy, stability, justice, education, and transparency. As a consequence, CBCs might contribute to sustainable development in a variety of ways: (a) the strengthening of community wellbeing (social sustainability); (b) the enhancement of endogenous potential (economic sustainability); (c) the recovery of degraded or abandoned natural resources (environmental sustainability); and (d) the creation of a network among local communities, authorities, and other private stakeholders able to mediate in situations of conflict (institutional sustainability). Environment can be considered as a determinant of the success of business [33,34]. The environmental performance of CBCs could also be assessed in terms of environmental, social, governance [35], but this goes beyond the scope of the present study. New CBCs are also linked to circular economies, which can be defined as economic systems replacing the “end-of-life” concept by reducing, recycling, and recovering materials [36,37]. Another aspect bringing CBCs and sustainability together is common goods management. CBCs can promote better care of collective property by encouraging territorial sustainability [38] and an alternative to land tenure that is different from private property [39]. CBCs, in contrast with the mobility paradigm, can be a tool for the affirmation of the placemaking paradigm [40], which promotes self-reliance strategies for urban areas [41], even in the context of IAs.

In this study, the research investigated the potential contribution of these new entrepreneurial models, based on cooperative principles, on the growth of Italian inner areas. In particular, the paper aims to define the path that CBCs can take to regenerate their territories. For this purpose, the following research questions (RQs) were proposed:

• RQ1. What are IAs’ critical issues?
• RQ2. What are the needs of communities living in IAs?
• RQ3. What are the potential business fields for establishing a CBC?

2. Materials and Methods

2.1. Dataset Implementation

The study area includes six municipalities in the Molise region of Southern Italy (Figure 2). Molise shows high socio-economic marginality, but also protected natural areas of relevant EU interest (Sites of Community Importance, SCIs; and Special Protection Areas, SPAs) [42,43]. Molise is subdivided into 136 municipalities, 109 of which are classified as IAs. The vast majority are very small centres (106 municipalities had fewer than 1000 inhabitants on 1 January 2019).

This area was selected because it concerns the SNAI, being composed of IA municipalities. Moreover, the mayors have expressed their interest in the possibility of establishing a community-based cooperative in one of their municipalities.

The study area is characterised by very small municipalities, with a population ranging from 336 to 4643 residents (at 1 January 2019), resulting in low demographic densities (varying from 20.5 to 62.8 persons per square kilometre). It shows a high rate of cropland (65.8% with respect to total agricultural area) and of employment in agriculture (11.7%), and even features young people without higher (tertiary) education, with a very high percentage of 41.4%. Furthermore, the unemployment rate in the younger population is significant, with mean values in the area being 38.2%, while female participation in the labour market is very low (29.8%).

Our research is based on a direct survey, the aim of which is to answer the RQs in Section 1 to define the potential role of CBCs in the sustainable development of their territories and/or communities. Information has been gathered through a questionnaire administered to nine respondents, called “privileged witnesses”, who are closer to citizens—i.e., the six mayors, two clergymen, and one employers’ organisation representative. The mayors provided information about socio-economic and environmental features of their municipalities. The choice of the clergymen reflects the closeness of Catholic Church to the population and its social needs. The employers’ organisation representative was included to express the requirements of the business world, particularly agricultural sector enterprises. The interviews were carried out by a specialised and trained interviewer who encountered each of the experts on a single occasion, recording the conversations on digital supports and then transcribing them for subsequent processing.

Regarding the RQs, the questions concerned: (a) social, economic, and environmental critical issues; (b) local communities’ needs; and (c) the potential business fields for CBCs that could support community needs.

The interviews with the privileged witnesses were preceded by two pilot interviews to solve any possible problems with the questionnaire and to structure its final form better.

2.2. Methodology

With reference to the research objective, the methodology employed involves text analysis and multivariate analysis.

For text analysis, two techniques were employed, content analysis [44] and sentiment analysis [45]. These methodologies have already been employed in different fields of applied research [37], by using information derived from pre-existing documents and/or websites. In our case, they have proven to be very useful in gleaning the most information from a limited number of interviews with open-ended questions. To our knowledge, they are rarely applied to this kind of data. In particular, we applied qualitative content analysis [46] to assess the respondents’ opinions. This approach allows us to explore the text content aside from the context, through data mining techniques. Standard steps are followed from data preparation to final analysis of data, using R open-source software.

In the first step, the text of the recorded interview was imported and data were pre-processed [47]; the output was the document-term matrix (DTM), representing the text in matrix form.

In step two, the research followed both a supervised machine learning approach (sentiment analysis) and a statistical approach (word clouds). Sentiment analysis is a methodology promoting the extraction and analysis of the sentiment, emotions, and opinions expressed in the texts. The chosen method is lexicon-based, enabling us to identify significant keywords with semantic strength [45]. Each word is given a semantic orientation—that is, a measure of the intensity of the word inside the text. The lexicon-based method makes use of dictionaries, giving a semantic orientation to each word, the construction of which can be automatic or manual [48]. In our case, dictionaries were manually prepared and were the result of the work of experts in the field. They were built by giving each word that was present in the DTM matrix from the interviews a value varying from −4 (strong negative sentiment) to +4 (strong positive sentiment). Another important role was played by enhancers and negations. Enhancers were subdivided into amplifiers and downtoners: amplifiers increased the semantic intensity of the word they referred to (“much”, “more”, and so on), while downtoners reduced semantic intensity (“less”, “fewer”, and so on). Negations determined the inversion of word polarity. Consequently, a second dictionary was built containing enhancers and downtoners, which, together with the values included in the first dictionary, gave the final semantic orientation for each answer.

Subsequently, we adopted a statistical approach that exploited word clouds to portray each answer, highlighting the words that presented higher intensity inside the text. The strength was determined not only by the frequency with which words were detected, but by the semantic orientation calculated for each of them.

As we had available data matrices S = [$s_{ij}$], with $r$ rows (the respondents) and $c$ columns (all of the used words), and with entries $s_{ij}$ equal to the sentiment associated with the i-th respondent for the j-th word, we could investigate the eventual associations between respondents and the most used words. In this way, we could discover homogeneous zones inside the study area with respect to critical issues, local community needs, and potential CBC business fields.

Following a top-down approach, we turned from the univariate sentiment analysis to the bivariate analysis results. The statistical methodology chosen to analyse the relationships between interviewees and the highest sentiments was correspondence analysis (CA) [49], for two main reasons: a) it is an exploratory method—that is, it aims to find possible structures in the data in a descriptive way, without inferential implications; b) its main output is a graphical representation, highlighting the associations between the two factors taken into account in a simple and intuitive way. Since, in our work, one of the factors had a geographical implication, we present a different version of the classic Cartesian graph: we built three cartograms with the six municipalities, each of which displayed the word(s) with highest sentiment. In this analysis, we considered only the six mayors’ answers, since the other respondents gave their information referring to the whole study area and not to individual municipalities.

In summary, Figure 3 outlines the methodological path.

3. Results

Figure 4 shows the sentiment analysis results. The font dimension reflects the sentiment intensity, while the colour shows the direction, which is negative in panel (a) (colours from yellow to red), and positive in panels (b) and (c) (colours in shades of green).

According to the respondents, the main critical issues (panel 4(a)) were socio-demographic and environmental. Indeed, the most recurrent words were “emigration”, “landslides”, “isolation”, and “depopulation”. We argue that there may be a strong relationship among some of the resulting terms: ageing, for example, is almost certainly related to the need for more healthcare, which is insufficient in the small towns of IAs.

The needs of primary communities (panel 4(b)) included job opportunities and essential services for the whole population, with special attention to the elderly, the youth, and firms. In particular, a strong job demand for young people stood out, together with a demand for training. Other requirements concerned the improvement of farming and livestock, by means of, respectively, the retrieval of abandoned lands and native breeds, and the promotion of tourism. These activities could be sources for new jobs and income. Finally, land maintenance and the need to assure sociomedical care for ageing people were also emphasised by the respondents.

CBCs may play a very important role in the enhancement of “sleeping resources”—for instance, the recovery of forest areas and inhabited buildings. As a consequence (panel 4(c)), CBCs could effectively conduct businesses devoted to public green areas, and hold and secure territory through hydraulic and forestry interventions. Other potential activities could be in organic agriculture and woods maintenance, landslide counteraction, and school services such as canteen management and the transportation of students. Lastly, a CBC could serve as a connector between hospital services and citizens through paramedical activities such as community nursing to assist ill people in their houses.

Following the methodological path introduced in Section 2.2, we now present the results from the correspondence analysis in our map format. Only the words with the highest sentiment are shown (Figure 5).

In regards to critical issues (panel 5(a)) in the study area, untilled surfaces were perceived as the main problem in the cyan coloured zone. Depopulation was perceived as a severe handicap in green zones, while red areas highlight ageing and landsliding issues. The remaining respondents did not express any particular sentiment regarding specific difficulties.

Panel 5(b) shows territorial needs: according to the respondent mayors, two areas are characterised by a requirement to cultivate abandoned surfaces, while the other two expressed the need for land maintenance, especially to reduce natural hazards. One mayor made specific reference to the creation of job opportunities, while another highlighted the need to counteract youth migration towards centres increasing the range of services devoted to citizens and employment prospects.

Panel 5(c) depicts the potential business fields of CBCs. In two areas, CBCs could carry out care for the elderly activities and work in the tourism and leisure sector (e.g., recovery of buildings to be used for tourist accommodation, called Albergo diffuso). In another two areas, CBCs could deal with land conservation. In the pink-shaded area, CBCs could practise agriculture, while in the blue area they could be involved in school services.

4. Discussion

The development of the methodological path and its application to an inner area in the Italian region of Molise led to the concept maps displayed in Figure 6, Figure 7 and Figure 8, which allow us to respond to RQs posed in Section 1. In particular, they were built to link the words with the highest sentiments and the questions referring to the themes, with the aid of the literature on IA issues and CBC features presented in Section 1.

In regard to criticalities (Figure 6), the study area appears to be experiencing a process of demographic marginalisation, mostly due to the migration of young people. This migration is to be attributed to the lack of essential services (healthcare and education) and the presence of an economic fabric largely based on a non-competitive agricultural model, due to difficult natural conditions and the scarce relevance of the industrial and tertiary sectors. As a consequence, jobs are becoming increasingly limited. Depopulation has social, economic, and environmental implications. In social terms, migration leads to the phenomenon of ageing, with repercussions for the welfare system. In economic terms, economic activities cease, causing a decline in employment level [50]. In regard to the environment, depopulation is linked to land neglect and, consequently, landslides, which are the main environmental criticality in these inner areas. The result is often isolation, especially for the districts further away from urban centres. It should be noted that hydrogeological instability also leads to farms ceasing [51], which results in lower territorial capital utilisation [52], including a reduction in agricultural area utilised, disused forestry systems, and disused housing. Unemployment and isolation, in turn, reinforce the phenomenon of depopulation.

The advent of CBCs is based upon the identification of community needs (Figure 7), such as more job opportunities, citizenship services, and land management. Depopulation has deprived IAs of work, reducing both the activity rate and the expertise. This issue plays a key role in examining the decline of IAs. For this purpose, it is essential to implement strategies designed: (a) to rebuild a solid segment of the active population, employed especially in agriculture and tourism; and (b) to ensure healthcare, education, and advisory services for the elderly, young people, and enterprises, respectively.

In recent times, agriculture has assumed a multifunctional role, referring both to commodity production and non-market outputs. Farms are able to employ local resources in a sustainable and conservative productive process, which is motivating an emerging movement for going back to farming. The landscape produces ecological, environmental, social, cultural, and economic value, from which it is possible to recognise and save the identity of an area; moreover, it is a fundamental factor in defining tourist flow attraction for the growth of IAs. Land management is also essential, and is associated with making the territory safe [53]; it can be considered a prerequisite to stop migration and depopulation.

Figure 8 illustrates potential CBCs’ business fields. They develop from resources and the territorial identity of a community [54] and from landscape features [55].

CBCs may contribute to revitalising inner areas by exploiting and promoting the potential of their territory [56], and by leveraging the leading role of citizens in order to provide answers to collective needs and to contribute to the growth of social capital [57]. These cooperatives provide public service management in a new way, as opposed to the traditional method that is entrusted to a public entity or outsourced to for-profit companies. The recovery of uncultivated surfaces strengthens the ecosystem service supply, which benefits local communities and economies [58]. CBCs could assume significant relevance in the food supply chain, manifesting through the development of alternative food networks, the restoration and enhancement of native varieties, and the transformation of local products. CBCs could promote the role of small-scale farmers, in particular those who use organic farming. They could also encourage a greater involvement among producers, increasing their loyalty with respect to a sustainable way of doing agriculture.

These cooperatives could also offer important services to farms: computer courses to build digital expertise among farmers and encourage precision farming, and the protection of ecosystems and biodiversity. CBCs could manage and enhance common goods, both in agriculture and in tourism. Furthermore, they could promote tourism based on cultural heritage [59,60], creating strategic partnerships both inside and outside the community [20]. Tourism plays a central role in revitalising inner areas, especially in those areas capable of offering high-level natural, cultural, and gastronomic resources.

5. Conclusions

By relying on the methodological scheme in Figure 3, we are now in a position to answer the principal goal of our research—that is, to define the path that can be taken by CBCs for the development of IAs. This path is illustrated in Figure 9. CBCs could lead to benefits by means of the supply of goods and services, improving the quality of life of the local community in a stable and enduring way. Local community involvement recalls the role of co-production, which employs the participation of citizens in the productive process, the supply of services for the community, interactions between citizens and the public administration, and organised citizen participation in the production of their own welfare services. Demographic decline inversion allows social capital to be re-established, which in turn prevents the deterioration of natural and artificial resources. Social, natural, and artificial capital are conditio sine qua non for the growth of IAs.

CBCs represent a social innovation and can offer socio-ecological and economic solutions by introducing new practices that reduce social inequalities and disproportionate resource use, and foster sustainable development [61].

The role of CBCs implies the consideration of public policies aiming to promote their establishment in Italian inner areas. In particular, municipal administrations and public entities should be supportive, especially in creating favourable conditions for the establishment of CBCs, by making public resources freely available and entrusting public interest services.

Although inner area policies in Italy have a longstanding tradition, they have produced rather limited results in terms of social and economic growth [62]. Nowadays, the SNAI is the principal reference point for inner area policies; however, it does not adequately recognise the role of CBCs [5]. It is desirable to involve CBCs in these policies, as they could become the basis of a process giving rise to a new paradigm of community development based on the sustainability principle. These cooperatives promote an innovative model of business to create goods and services in the interest of citizens by means of involvement of the local community. CBCs are fundamental actors in the transition towards a new kind of economic organisation and contribute to communitarian empowerment.

In conclusion, we state that our main contribution to the scientific debate regarding CBCs is the definition of a scheme which allows the identification and management of the potential generating processes of CBCs in Italian IAs.

Some practical recommendations for any rising CBC include the need to evaluate the feasibility of project ideas ex-ante, and to take into account homogeneous areas to settle in, since this choice will facilitate scale economies. The richness of the topics associated with CBCs raises many opportunities for future research seeking to define a new paradigm of regional development in Italian IAs based on cooperative principles.