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16.	Knowledge building and organizational behavior:
              the Mondragón case from a social innovation
              perspective
                  Igor Calzada


          16.1  SOCIAL INNOVATION:                         of a ‘bees and trees’ alliance (Figure 16.1)
          THE PRESENT, PAST AND                            is referred to as a biocentric approach
          FUTURE                                           – it represents an ‘ecologization’ of the
                                                           economy and its relations with the local
          The new conceptualization of innova-             community and civic society as a whole.
          tion in postmodern management studies            As the chapter will show, the biocentric
          has generated quite some marketecian             approach in the Mondragón case relates
          noise. Still, other community-­mbedded
                                               e           to the critical value of land and territory as
          approaches to innovation bypassing a uni-        primary sources of social innovation.
          lateral global competition logic are pos-           Castells (2009) bases his prediction for
          sible. To this end, Geoff Mulgan and his         the future of cities and territories on the
          colleagues contextualize the challenges and      belief that the social networks (Christakis
          issues that territories and business nodes       and Fowler 2011) that are currently a part
          confront in a globalized world, offering the     of people’s daily lives do not differ greatly
          idea of ‘creative ecosystems’ and the meta-      from power or ‘censorship in the age of
          phor of the Bees and the Trees (Mulgan           freedom’ (Cohen 2012). Therefore, rather
          2007; Murray et al. 2010). According to          than leaving the market and its forces
          this idea, socially innovative experiences       to their own devices, one must consider
          are based on an ‘alliance’ between active        a vision for civil society in which insti-
          agents of innovation (creators, innovators       tutions intervene in market forces. The
          and entrepreneurs) – the ‘bees’ – and active     primary issue is to offer protection from
          agents of validation (universities, compa-       the market, rather than be ‘bullied’ by
          nies and institutions) – ‘trees’. When bees      the influence of the globalization, and to
          and trees live together in the same urban        show how to ‘survive’ and function in it.
          area they can, through their mutually ben-       Thus, it is now appropriate to reintroduce
          eficial interactions, create creative local      great discoveries such as those that led
          communities. Presently, at grassroots level      Jane Jacobs (1984) to propose slowing
          in cities, such ‘alliance’ is required between   economic growth for the sake of other
          the post-­risis large-­cale projects inves-
                      c           s                        social and community benefits. More
          tors and social entrepreneurs. Without an        recently, contributions on the relationship
          alliance between these two types of agents,      between urban development and com-
          it is not possible for social innovation to      munity dynamics include David Harvey’s
          occur, because the resources and structures      concept of ‘rebel cities’ (2012), Edward
          needed to generate the emerging dynamics         Glaeser’s ideas on urban and rural com-
          that would lead to innovation would not          plementarities in cities (2011), and Nick
          be available. In this chapter, this approach     Cohen’s critique of the superficially ‘free’

                                                       219




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220  The international handbook on social innovation




                                                               Entrepreneurs
                  ACTIVE INNOVATION AGENTS:
                                                                  Innovators
                  Resources: Creation and Ideas
                                                                  Creators

                                                    MULTIDISCIPLINARY EXPERIMENTATION PROCESS

                             From one side
                           Creative Class                         CREATION
                                                    INVOLVEMENT                    INNOVATION
                            Stakeholders                             VALIDATION
                          From the other side

                                      To cultivate Local Urban Creative Communities



                                                                  Universities
                   VALIDATION AGENTS:
                                                                  Companies
                   Resources: Interest and Profit
                                                                   Institutions                  Trees

             Source:  Calzada (2011a, p. 44).

             Figure 16.1  Social innovation creative ecosystem: bees and trees

             connected world made by digital social           Spain, the Mondragón group employs
             networks (Capra 1996; Cohen 2012). The           83,869 people in 256 cooperatives with
             future of social innovation is already being     an export rate of 60 per cent of its total
             written in terms of a return to the past,        €14.8 billion (Mondragón Corporación
             through the revival of essential values          Cooperativa 2011).
             such as authenticity, identity and local
             community.
                It is not likely that Jose María de           16.2  THE DECREASE IN
             Arizmendiarrieta had heard of Jacobs’s           COMMUNITARIAN SOCIAL
             ideas when he founded one of the world’s         CAPITAL (CSC) IN THE
             most-­ studied cooperative experiences in        BASQUE CITY-­REGION
             1956 in Mondragón, a Basque town with
             a population of 30,000 people. However,          To paraphrase the founder of the
             this town had all of the community charac-       Mondragón cooperative, Jose María
             teristics that Jacobs had established for an     Arizmendiarrieta, ‘[n]othing differentiates
             environment to be ‘fertile’ for social inno-     individuals and people as much as their
             vation, which is what occurred. Currently        respective attitudes to the circumstances
             the seventh largest business group in            in which they live. Those who choose




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The Mondragón case from a social innovation perspective  ­21
                                                                                                 2

          to make history and change the course               to think, as Azkarraga argues, that ‘the
          of events for themselves have advantages            cooperative lung needs more oxygen than
          over those who decide to wait passively             that provided from the new masks distrib-
          for the results of change’ (Azkarraga et al.        uted in the name of postmodern manage-
          2012, p. 76). In today’s globalized environ-        ment. The Mondragón Experience requires
          ment, we require an affirmative but critical        a closer connection with the renewed paths
          examination from within the Mondragón               of humanization being proposed in today’s
          experience. Globalization promotes indi-            world’ (Azkarraga et al. 2012, p. 79). In the
          vidualism with the result that the coop-            Basque region, with the emerging dyna-
          erative modus operandi is changed and               mism of ‘Chindia’ (a term used to describe
          risks losing its cooperative identity. As           two of the five BRICS countries, namely
          Azkarraga states:                                   China and India), the financial crisis has
                                                              reinforced the need to innovate beyond
              [w]e have experienced an ideological emp-       a business-­ entered view. In this context,
                                                                           c
              tying and the reinforcement of a new            the Mondragón Corporación Cooperativa
              human profile that is more shallow, prag-       (MCC) group has defined its response to
              matic and individualistic. The process of
              de-­deologization has affected the whole of
                  i                                           global markets over several years. In the
              society and, as members of that society, the    past, during periods of growth, a techno-­
              co-­ perative social body as well. (Azkarraga
                  o                                           centric approach prevailed. Now, however,
              et al. 2012, p. 78).                            from the more holistic stance of corporate
                                                              social identity, the MCC must abandon this
          In this context, the original vision of the         outdated approach and move forward. The
          Mondragón cooperative provides valuable             MCC is being branded globally as social
          lessons for the present. Figure 16.2 shows          entrepreneurship (Hulgård 2006), and in
          the presence of Mondragón cooperatives              this chapter I attempt to demonstrate the
          worldwide, including 77 production plants           importance of restoring communitarian
          and nine corporate offices. The challenges          social capital to the business and academic
          for this network due to globalization are           agendas. In other words, we believe that
          immense. The internationalization of the            once the technocentric approach is super-
          cooperatives (Luzarraga et al. 2007), the           seded by one based on an anthropocentric
          emergence of the BRICS (Brazil, Russia,             view of social entrepreneurship, there is a
          India, China and South Africa) countries,           risk that this view will prove no more than
          the ways in which China and India are               a veneer for the threat of modern individu-
          revolutionizing global business patterns,           alism: ‘triumphalist talent’. By ‘triumphal-
          the decrease in communitarian social                ist talent’, we refer to the cases in which
          capital (CSC), the rise of individualism,           entrepreneurial action succeeds in an indi-
          the gluttony of unfettered consumerism,             vidualist manner and as a consequence
          and the growing individualization of life           of one-­ one competitiveness (Calzada
                                                                       to-­
          through virtual networking (e.g. the use of         2011a, p. 235). To understand this better,
          mass social networks) all contribute to the         we can refer to the provocative and best-­
          urgency of critically recovering the founda-        selling book Funky Business (Riddestrale
          tions of the cooperative experience, which          and Nordstrom 2000), which shows how
          is the core of social innovation. Hence, we         companies are changing their size and
          need a strategic vision that accounts for           methods of management and operation.
          both local and global realities.                    When we examine cooperative companies,
             The present is uncertain: it is reasonable       we can also observe organizational changes




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MoULAERT PRINT.indd 222
                                                                                                                      Poland       6

                                                                                                                 Germany          Czech Republic
                                                                                                                       5            8
                                                                                                                                   Slovakia
                                                                                                            Belgium       1           2
                                                                                             Ireland 1                                               1
                                                                                         United Kingdom      3                                           Russia
                                                   U.S.A.   1
                                                                                                                 1                            1
                                                            4                                     Holland                                          Romania
                                                                                                                          16
                                                                                             Portugal   4                         Italy
                                                                                                                     France          4                                            China       1
                                          Mexico   1                                                                                           2                                              13
                                                   7                                                                                      Turkey
                                                                                                                      1                                              India    1
                                                                                                                                                                              4                           1
                                                                                                              Morocco                                                                                         Taiwan

                                                                                                                                                                                          1
                                                        Columbia        1                                                                                                         Thailand         1
                                                                                                                                                                                          Vietnam




                          222
                                                                                Brazil   1
                                                                                         6

                                                                Chile       1

                                                                                                                                                                                                       Australia   1




                                                                                                                          Corporate offices (9)      Production plants (77)



                                Source:  Mondragón Corporación Cooperativa (2011).

                                Figure 16.2  The international manufacturing presence of the Mondragón cooperatives




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The Mondragón case from a social innovation perspective  ­23
                                                                                              2

          from industrial conventional post-­ ordist
                                                F         ism, which was originally too anthropo-
          companies to entrepreneurial-­etworked
                                            n             centrically oriented.
          atomized business units. Moreover, a
          new generation of cooperative members
          is threatened by individualism. Thus, how       16.3 COMMUNITARIAN
          can we avoid the temptation to encour-          SOCIAL CAPITAL (CSC)
          age ‘triumphalist talent,’ which encourages     BUILDING IN MONDRAGÓN
          individualism and organizational anemia
          in universities and companies? How can          The Mondragón experience was based on
          we establish a new generation of social         the idea that community development is
          entrepreneurs according to the coopera-         more important than economic progress.
          tive traditional synergy with the biocentric    As a result, a number of small entre-
          approach, who can respond creatively to         preneurial businesses gradually created a
          the current economic, social and environ-       dense business network in a single valley.
          mental challenges?                              However, the increased sizes of the coop-
             We must strike a balance between             eratives, the greater degree of interna-
          encouraging individualist and triumphal-        tionalization and a move towards more
          ist forms of ‘social’ entrepreneurship with     individualistic patterns of community and
          the need to structure communities, which        civic life have lowered the levels of com-
          are the basis of the cooperative economy.       munitarian social capital (CSC) to historic
          When we speak of communities, we refer to       minimums. Today, therefore, the coop-
          self-­ overning actions that are initiated by
               g                                          erative model faces a potential crisis, and
          a business, university or the scientific and    there is a need to reformulate it from the
          technological world and that can extend         ground up while preserving its cooperative
          to the level of public institutions and civil   essence. In other words, there is an urgent
          and associative society. Ultimately, social     need to build a new biocentric model of
          entrepreneurship should serve local com-        development that does not harm the eco-
          munities. For example, universities are         system but fosters lifestyles with a strong
          active agents of validation (trees) that host   post-­ aterialist element based on respon-
                                                                m
          many active agents of innovation, or social     sible consumption, self-­ontainment and
                                                                                    c
          entrepreneurs (bees).                           austerity. Let us examine some inspiring
             If the Mondragón experience is to adapt      experiences connecting past and present in
          to today’s challenges, then it must initiate    Mondragón.
          a biocentric path in which sustainability          ORONA is a leading MCC interna-
          is not an addition but permeates the way        tional cooperative company that is com-
          business is conducted, with the involve-        patible with a biocentric perspective. This
          ment and proximity of local communi-            company is a world leader in elevation
          ties. The biocentric approach reminds us        systems and is currently developing an
          why the Mondragón experience has been           ambitious strategic project called ORONA
          socially innovative in a communitarian          IDeO, Innovation City (http://www.orona-­
          manner, both economically and sustain-          group.com/en/sections/we-­are-­orona/inn​
          ably, and why we should recover those           o​vation/orona-ideo-innovation-­city.php,
          values and activities to adapt them to          last accessed 9  January 2013). The aim
          the present. This chapter’s analysis of the     of this project is to build a research hub
          Mondragón experience shows how the              led by an international company and
          biocentric approach can save cooperativ-        the University of Mondragón to initiate




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224  The international handbook on social innovation

             a ­ ialogue with the stakeholders of the
                d                                            key social asset. Civil organizations for the
             Basque city region. The practical approach      creation of Basque schools united people
             of ORONA IdEO is a good foundation              with different ideologies to create a high
             from which to valorize the territory as a       level of CSC.
             biocentric unit of the society, economy and        Finally, the case of Auzolan (Calzada
             environment.                                    2011a, p.  243), or neighbourhood com-
                For the University of Mondragón,             munity work, represents an historical ideal
             though, the primary effort in recent times      and an experience from which important
             has been the promotion of projects and          lessons can still be learned today. The
             initiatives not in international companies,     roots of this civil movement began in the
             but in junior cooperatives. Although job        Basque Country and are based on the same
             maintenance is supported by ‘traditional’       idea on which the Mondragón experience
             business and cooperative structures, the        was founded. A revival of neighbourhood
             original driving forces behind the firms        community work in several towns and
             belonging to the Mondragón group (some          areas throughout the Basque country has
             of them: Orona, Maier, Eroski, Fagor and        recently begun. One way of reviving this
             Ulma), today we should explore the possi-       practice today to increase the level of CSC
             ble replacement of these ‘traditional’ struc-   for towns and districts, which are micro-­
             tures with global, dynamic, young, open,        territories (Calzada 2011a, p.  241), is to
             networked and sustainable initiatives           upgrade the concept of Auzolan to that of
             (similar to the business model promoted         the Auzolab, a community laboratory for
             by Riddestrale and Nordstrom (2000).            the development of neighbourhoods and
             This is the impetus behind the university’s
                                               ­             villages.
             LEINN (Enterprising and Innovative
             Leadership) degree, which is contributing
             to the formation of a new talent pool of        16.4 CONTEMPORARY
             social entrepreneurs which is consistent        OPPORTUNITIES FOR THE
             with the vision of the Mondragón experi-        BASQUE CITY REGION
             ence and that will enhance truly reticu-
             lar cooperative entrepreneurial business        No analysis of the deterioration of CSC
             models (Calzada 2011a, p. 235). The future      in the Mondragón experience and in the
             of social innovation lies not with large        Basque country can ignore the political
             companies but with networked structures         violence suffered by the Basque people.
             of social entrepreneurs.                        The consequences of this violence
                An interesting historical experience is      include social withdrawal, the creation of
             the civil movement of support for the           closed communities (archipelagos) and
             Ikastolas (schools in Basque) and the           a damaged moral and social fabric that
             revival of the Basque language (Calzada         has led to citizens’ disempowerment and
             2011b). In the closing years of the Franco      demoralization. As Bauman (2001) and
             dictatorship, the Basque society expe-          Putnam (2001), noted, the loss of com-
             rienced major upheavals, with a strong          munity values is inexorably linked to the
             social response on the streets. In addition     erosion of CSC. In the Basque country,
             to numerous other demands, the element          such erosion certainly influenced and even
             that largely united Basque society (despite     paralyzed civil society (Innerarity and
             differences over ideological strategy) was      Gurratxaga 2009; Elzo and Silvestre 2010;
             the revival of the Basque language as a         Echeverría and Gurrutxaga 2010).




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The Mondragón case from a social innovation perspective  ­25
                                                                                               2

             However, at the time of writing, a             tion and remixes (Lessig 2008) between
          number of covert developments point in            entrepreneurs in search of new oppor-
          the direction of a possible peace process.        tunities and unexplored niches, creative
          After two years without attacks and a             ecosystems must undergo the consolida-
          defusing of the dynamics that created             tion/institutionalization (Calzada 2005) of
          vicious circles of political violence, there is   relations and relationship patterns. When
          increased hope and opportunity for socio-­        we speak of institutionalization, we refer
          political change. This context offers an          to the transition from an informal social
          opportunity to break the cycle of stagna-         network to an institutional cluster. The
          tion and deterioration and to begin a new         necessary condition for CSC is not the
          period of openness and inclusive work.            mere presence of active (online) social net-
          The time may be right for the Basque              works. Another condition, which now also
          country, as a geostrategic cross-­ order ter-
                                             b              constitutes a new category of scientific
          ritory within the EU, to take ownership of        analysis, is necessary: ‘Social Connectivity’
          the decisions that affect it and to emerge as     (Calzada 2011a, pp.  58, 215, 220). Social
          a Basque city region that we shall call ‘the      connectivity should be understood as the
          Basque City’.                                     linking of social networks at the commu-
             These changing socio-­olitical condi-
                                       p                    nity level with the purpose of activating
          tions point to a scenario of ‘normality’          consensus among diversity.
          against a backdrop of economic crisis and            Ultimately, a creative ecosystem
          recession. Combined with a commitment             needs its networked relationship pat-
          to strategic projects in emerging indus-          terns to become dynamic and representa-
          tries, new CSC may generate opportunities         tive of the structure of the system itself.
          for development. A specific opportunity is        Unfortunately, an explanatory model has
          presented by new technologies, in the form        not yet been devised from the perspective
          of trans-­ocal social connectivity.
                   l                                        of social innovation. However, we can
                                                            observe that without social connectivity,
          16.4.1  Strategies of Social Innovation:          social networks will rise and fall without
          Social Connectivity, Social Networks              creating lasting community value and
          and Reconfiguration in New ‘Glocal’               without generating CSC through dynamic
          Communities                                       social networks that practice social con-
                                                            nectivity on a daily basis.
          With the rise in online social networks (for         Let us now examine the three constitu-
          example, Facebook, Twitter and Linked             ent elements of CSC (Burt 2005) bonding,
          In), there is a tendency to confuse the           bridging and linking for the Basque City:
          emergence of new relational patterns with
          the consolidation of CSC. In other words,           ●●   Bonding: an important starting
          increased interaction on social networks                 point is to overcome the scenario of
          does not necessarily lead to a substantial               political violence to create the nec-
          increase in CSC. Evidently, social net-                  essary conditions for bridging the
          works are creating relational flows that                 gap between different agents. We
          would have been inconceivable only a                     assume that bonding through social
          few years ago and constitute an essen-                   entrepreneurship in the university-­
          tial phase of recombination and intersec-                company-­  public institution triad
          tions (Johansson 2004) for innovation.                   is now bearing its first fruits. In
          However, after a first step of recombina-                the past, the distances between the




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226  The international handbook on social innovation

                     e
                     ­ lements of this triad were immense;    lation and response mechanism. We begin
                     however, the collaborative work          by quoting Azkarraga, who insists that
                     being conducted by the university is     ‘[i]t clearly seems inconsistent to set up a
                     playing a leading role in strengthen-    cooperative metropolis with a capitalist
                     ing this triad.                          periphery. (. . .) But the cooperative group
                ●●   Bridging: one disturbing aspect          does not yet have a model of internation-
                     of bridging is the style of social       alisation of its own, a model that also in
                     entrepreneurship being promoted,         one way or another internationalises the
                     which conflicts with the creation of     cooperative idea.’ (Azkarraga 2007, p. 5)
                     CSC because it demands a profile             The great challenge for social innovation
                     of ‘triumphalist talent’. This con-      research lies in the formulae, methodolo-
                     flict is also paradoxical because it     gies, case studies and lessons to be learned
                     is unrelated to the basic principles     from the processes of internationalizing
                     of the Mondragón experience. We          the cooperatives (see Figure 16.2) that cur-
                     encounter the risk of encouraging        rently form the flagship of the Mondragón
                     the emergence of an individualistic      experience. These cooperatives alone do
                     entrepreneurship with no bridging        not create a competitive advantage for
                     and no CSC-­ uilding process.
                                   b                          strategic positioning in global markets.
                ●●   Linking: social networks are leading     Considering this situation of maximum
                     us towards new ‘glocal’ scenarios        global uncertainty, we must explore a new
                     in which social innovation seeks to      concept of social entrepreneurship in dif-
                     deal with similar questions in geo-      ferent emerging industries: entrepreneurs
                     graphically different points: ‘glocal’   with large glocal networks who are highly
                     means that the local and global are      specialized and prepared to form or lead
                     interlinked. Thus, we are building       culturally and thematically diverse teams.
                     arrangements in trans-­ocal param-
                                              l                   However, some questions remain unan-
                     eters in which the power of the local    swered: what specific organizational/
                     territory acquires a new dimension       cooperative form would provide cover-
                     on the global map. In other words,       age, projection, autonomy and freedom
                     we are increasingly interested in        of movement to these new social entrepre-
                     experimenting with local Auzolabs,       neurs, individually, in teams or in glocal
                     which are inter-­onnected to favor
                                        c                     cells? Is it possible to speak of ‘intrapre-
                     trans-­local learning. Linking has       neurship’? Are the ‘driving’ cooperatives
                     prime importance in this dimension.      willing to encourage social entrepreneurs to
                     Given that it is essential to recover    join their structures? Does the Mondragón
                     CSC, social innovation must be           experience currently allow these social
                     implemented today with strategies        entrepreneurs to work towards the future
                     that include the glocal dimension        of the Mondragón brand? Is there not a
                     (Calzada 2011a, p. 220).                 risk that their efforts will be dissipated into
                                                              small and unconnected initiatives? Is there
             16.4.2  Glocalization, Social                    a way to maintain two speeds of develop-
             Entrepreneurship and Cooperativism in            ment (one traditional and mature and the
             Mondragón                                        other emerging but voluntary or idealist)?
                                                              Is it possible for these speeds to converge?
             This section examines new paradoxes and              Let us recall that the Mondragón expe-
             problems that may serve to spark an articu-      rience originated with a few social entre-




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The Mondragón case from a social innovation perspective  ­27
                                                                                                 2

          preneurs under the protection of the local          entrepreneurially based ‘cooperativism’
          community. They were small groups with              should ignore the community or make
          close social relations in this local commu-         the individual the primary driving force
          nity. The situation at that time was more           behind all change (i.e. an anthropocentric
          comfortable than the current situation and          vision). In a social innovation approach,
          was characterized by social, cultural, com-         we employ a biocentric focus that involves
          municative and psychological proximity.             social entrepreneurship in a variety of
          Today, in contrast, the Mondragón case              cooperative roles.1
          comprises 83,859 individuals in a coop-                The real issue for the Mondragón expe-
          erative group of more than 256 companies            rience today is that no cooperative forms
          with a high degree of complexity, social            of society currently articulate the new
          differentiation and organizational archi-           creative ecosystem on a systematic basis.
          tecture. There has been a move from a               One of the great challenges for coopera-
          geographical concentration to a clustered           tive firms is to adopt this articulation as
          relocation on a global scale.                       a prelude to being a true social innovator.
             This new geography of clustered reloca-
          tion affects the social networks (Cohen             16.4.3  Social Entrepreneurship vs. Public
          2012) generated in the socio-­       business       Sector? Noise and Silence
          world: relationships between cooperative
          workers, social entrepreneurs, researchers,         A related matter – and without wishing
          consultants, managers, teachers, and the            to enter a slippery polemic but rather to
          entire community network in which they              examine the real situation directly – is
          operate. The following essential questions          the paradox of the current socioeconomic
          must be answered: how will those social             system. In the midst of a crisis and reces-
          networks initially be created? How will             sion, there is support for entrepreneurship,
          they be consolidated to create new com-             but which type of entrepreneurship is being
          munitarian social capital? Could these net-         discussed? Moreover, is entrepreneurship
          works build a new cooperative horizon for           the most important type of agency in the
          social entrepreneurs based on cooperative           current crisis? This tension is expressed
          principles?                                         in the contrast between the ‘noise’ gener-
             Azkarraga identified a key challenge to          ated by the frustration of the Spanish
          these new social and spatial configurations         2011 protest movement, the ‘Indignados’
          stating that:                                       (Harvey 2012), and the silence on the part
                                                              of many agents in the system who have the
              an ideological horizon was lacking that         social responsibility both to survive the
              would embrace the different self-­ anaging
                                                  m
              social scenarios within an integrating frame-
                                                              recession and to take on a new approach
              work. The cooperative valley has not been       to social transformation. I am essentially
              nourished by the necessary ideological,         referring to the leaders of private finan-
              symbolic and intellectual impetus. There        cial institutions and the politicians who
              has been no comprehensive project and no        apply only partial measures in their areas
              vision to mark this orientation since the
              death of Arizmendiarrieta. This new vision
                                                              of influence, with the excuse that global
              offers a real possibility of overcoming this    issues are beyond their reach.
              shortfall. (Azkarraga 2007, p. 6)                  When one considers the discourse of
                                                              entrepreneurship for the sake of entrepre-
           Here, we can identify the first obstacle.          neurship, there is a tendency to overlook
          One cannot simply propose that a new                the necessary public service reforms. The




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228  The international handbook on social innovation

             Basque city region has an oversized public    action shared by companies, universities
             administration that is bureaucratized and     and public administrations.
             sometimes inefficient because of redun-          However, this transition undoubtedly
             dancy and overlap (Calzada 2011a, p. 265).    requires five key changes: (a) the change
             How can this problem be addressed?            in the energy matrix and the transition
                Social innovation strategies should        towards a greater self-­ ufficiency; (b) busi-
                                                                                  s
             encourage a spirit of social entrepreneur-    ness reorientation towards the creation
             ship within a wider dynamic of coop-          of ‘green’ products; (c) job creation poli-
             erativism. In this regard, companies and      cies; (d) policies related to innovation,
             public institutions must commit to the        science and technology; and (e) a pro-
             new dynamic biocentric approach based         found cultural change in the cooperativ-
             on the creative ecosystem. Furthermore,       ist social body. The biocentric approach
             a review of the forms and functions of        will produce a new eco-­      socioeconomic
             public service is imperative, both from       paradigm in which social innovation is
             the perspective of management and effi-       the strategy and the city region is the ter-
             ciency and in terms of citizen solidarity     ritorial concept for the post-­008 crisis
                                                                                             2
             and democracy.                                scenario.
                                                              In summary, we aimed to propose from
                                                           a social innovation approach stepping
             16.5 CONCLUSION                               stones, not only to allow the Mondragón
                                                           cooperative group to meet new challenges
             Articulating the Mondragón experience         but also to empower the hopeful reality of
             with the territorial and community-­ ased
                                                  b        the Basque country as it establishes itself
             development of the Basque city region         as a Basque city region.
             involves a move from a technocentric and
             anthropocentric approach to a biocentric
             one.                                          16.6  QUESTIONS FOR
                We must identify how to make the           DISCUSSION
             transition from an experiment in socio-
             economics to one in eco-­ocioeconomics.
                                       s                     ●●   How can we design more social
             As noted above, this transition requires             innovation projects, like IDeO and
             the companies of the Mondragón group,                LEINN, in which companies and
             the University of Mondragón’s research               universities develop a new biocen-
             projects and students, and the Basque                tric approach to cooperativism? In
             country, as a networked territory known              doing so, can we avoid the trium-
             as the Basque city region, to consider this          phalist and individualistic entrepre-
             territory a primary asset. The ORONA                 neur’s ‘dangerous’ business style?
             IdEO, Innovation City and LEINN pro-            ●●   Are these two projects the seeds with
             jects are good examples of the practical             which to plant local urban crea-
             consequences of social innovation. New               tive communities in the Basque city
             green economy jobs, projects, companies              region?
             and public policies ought to be supported       ●●   What role could an academic per-
             through the pollination and co-­reation
                                               c                  spective on territorial development
             processes of the urban local creative eco-           and social innovation (MacCallum
             system. In the case of Mondragón, this               et al. 2009) play in the future design
             support should take the form of collective           of services, and even products, in a




MoULAERT PRINT.indd 228                                                                                06/03/2013 14:41
The Mondragón case from a social innovation perspective  ­29
                                                                                                   2

                  new eco-­ ocioeconomic paradigm in
                           s                                         Amazing Power of Social Networks and How They
                  Mondragón?                                         Shape Our Lives, London: HarperPress.
                                                                   Cohen, N. (2012), You Can’t Read This Book:
             ●●   How can the University of                          Censorship in an Age of Freedom, London: Fourth
                  Mondragón develop its sensitivity                  Estate Press.
                  to the value of territory and business           Echeverría, J. and A.  Gurrutxaga (2010), La luz
                                                                     de la luciérnaga: Diálogos de Innovación Social,
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                                                                     Europea de Valores en su aplicación a España,
          NOTE                                                       Bilbao, Universidad de Deusto.
                                                                   Glaeser, E. (2011), Triumph of the City, Oxford &
          1.	 In this context, we can revisit the University         London: Pan Books.
              of Mondragón’s new LEINN degree, to ask              Harvey, D. (2012), Rebel Cities: From the Right to the
              whether the pool of social entrepreneurs it is         City to the Urban Revolution, London: Verso.
              creating is consistent with the vision of the        Hulgård, L. (ed.) (2006), Social Enterpreneurship and
              Mondragón experience? How can we ensure a              the Mobilization of Social Capital in European
              truly reticular cooperative entrepreneurial busi-      Social Enterprises: A Public-­       Third Sector
              ness model?                                            Partnership, London: Routledge.
                                                                   Innerarity, D. and A.  Gurratxaga (2009), ¿Cómo
                                                                     es una sociedad innovadora? Bilbao: Innobasque-­
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                                                                     New York: Random House.
                                                                   Johansson, F. (2004), The Medicci Effect.
          (References set in bold are recommended reading.)          Breakthrough Insights at the Intersection of Ideas,
          Azkarraga, J. (2007), Mondragón ante la globali-           Concepts and Culture, Boston: Harvard Business
            zación: la cultura cooperativa vasca ante el cambio      School Press.
            de época, Eskoriatza, Gipuzkoa: Cuadernos de           Lessig, L. (2008), REMIX: Making art and commerce
            LANKI, no 2, Mondragón Unibertsitatea.                   thrive in the hybrid economy, New York: Penguin
          Azkarraga, J., G.  Cheney and A.  Udaondo (2012),          Press.
            ‘Workers Participation in a Globalized Market:         Luzarraga, J.M., D.  Aranzadi and I.  Irizar (2007),
            Reflections on and from Mondragon’, in Maurizio          ‘Understanding the Mondragón Globalization
            Atzeni (ed.), Alternative work organizations,            Process: Local Job Creation through Multi-­
            London: Palgrave.                                        Localization: Facing Globalization Threats to
          Bauman, Z. (2001), Community: seeking safety in an         Community Stability’, paper presented at the 1st
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          Burt, Ronald S. (2005), Brokerage and Closure:             Social Economy, Victoria, Canada.
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            University Press.                                        Territorial Development, Aldershot: Ashgate.
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            y Gestión: Las Clases Creativas en la Euskal Hiria,      Annual Corporate Profile, http://www.mondragon-­
            Vitoria, Revista Vasca de Economía, Ekonomiaz            corporation.com/mcc_dotnetnuke/Portals/0/docu​
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MoULAERT PRINT.indd 229                                                                                                 06/03/2013 14:41

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Full version Mondragon case from the Social Innovation International Handbook Edward Elgar Chapter 2.5 2 ISBN: 978 1 84980 998 6

  • 1. 16. Knowledge building and organizational behavior: the Mondragón case from a social innovation perspective Igor Calzada 16.1  SOCIAL INNOVATION: of a ‘bees and trees’ alliance (Figure 16.1) THE PRESENT, PAST AND is referred to as a biocentric approach FUTURE – it represents an ‘ecologization’ of the economy and its relations with the local The new conceptualization of innova- community and civic society as a whole. tion in postmodern management studies As the chapter will show, the biocentric has generated quite some marketecian approach in the Mondragón case relates noise. Still, other community-­mbedded e to the critical value of land and territory as approaches to innovation bypassing a uni- primary sources of social innovation. lateral global competition logic are pos- Castells (2009) bases his prediction for sible. To this end, Geoff Mulgan and his the future of cities and territories on the colleagues contextualize the challenges and belief that the social networks (Christakis issues that territories and business nodes and Fowler 2011) that are currently a part confront in a globalized world, offering the of people’s daily lives do not differ greatly idea of ‘creative ecosystems’ and the meta- from power or ‘censorship in the age of phor of the Bees and the Trees (Mulgan freedom’ (Cohen 2012). Therefore, rather 2007; Murray et al. 2010). According to than leaving the market and its forces this idea, socially innovative experiences to their own devices, one must consider are based on an ‘alliance’ between active a vision for civil society in which insti- agents of innovation (creators, innovators tutions intervene in market forces. The and entrepreneurs) – the ‘bees’ – and active primary issue is to offer protection from agents of validation (universities, compa- the market, rather than be ‘bullied’ by nies and institutions) – ‘trees’. When bees the influence of the globalization, and to and trees live together in the same urban show how to ‘survive’ and function in it. area they can, through their mutually ben- Thus, it is now appropriate to reintroduce eficial interactions, create creative local great discoveries such as those that led communities. Presently, at grassroots level Jane Jacobs (1984) to propose slowing in cities, such ‘alliance’ is required between economic growth for the sake of other the post-­risis large-­cale projects inves- c s social and community benefits. More tors and social entrepreneurs. Without an recently, contributions on the relationship alliance between these two types of agents, between urban development and com- it is not possible for social innovation to munity dynamics include David Harvey’s occur, because the resources and structures concept of ‘rebel cities’ (2012), Edward needed to generate the emerging dynamics Glaeser’s ideas on urban and rural com- that would lead to innovation would not plementarities in cities (2011), and Nick be available. In this chapter, this approach Cohen’s critique of the superficially ‘free’ 219 MoULAERT PRINT.indd 219 06/03/2013 14:41
  • 2. 220  The international handbook on social innovation Entrepreneurs ACTIVE INNOVATION AGENTS: Innovators Resources: Creation and Ideas Creators MULTIDISCIPLINARY EXPERIMENTATION PROCESS From one side Creative Class CREATION INVOLVEMENT INNOVATION Stakeholders VALIDATION From the other side To cultivate Local Urban Creative Communities Universities VALIDATION AGENTS: Companies Resources: Interest and Profit Institutions Trees Source:  Calzada (2011a, p. 44). Figure 16.1  Social innovation creative ecosystem: bees and trees connected world made by digital social Spain, the Mondragón group employs networks (Capra 1996; Cohen 2012). The 83,869 people in 256 cooperatives with future of social innovation is already being an export rate of 60 per cent of its total written in terms of a return to the past, €14.8 billion (Mondragón Corporación through the revival of essential values Cooperativa 2011). such as authenticity, identity and local community. It is not likely that Jose María de 16.2  THE DECREASE IN Arizmendiarrieta had heard of Jacobs’s COMMUNITARIAN SOCIAL ideas when he founded one of the world’s CAPITAL (CSC) IN THE most-­ studied cooperative experiences in BASQUE CITY-­REGION 1956 in Mondragón, a Basque town with a population of 30,000 people. However, To paraphrase the founder of the this town had all of the community charac- Mondragón cooperative, Jose María teristics that Jacobs had established for an Arizmendiarrieta, ‘[n]othing differentiates environment to be ‘fertile’ for social inno- individuals and people as much as their vation, which is what occurred. Currently respective attitudes to the circumstances the seventh largest business group in in which they live. Those who choose MoULAERT PRINT.indd 220 06/03/2013 14:41
  • 3. The Mondragón case from a social innovation perspective  ­21 2 to make history and change the course to think, as Azkarraga argues, that ‘the of events for themselves have advantages cooperative lung needs more oxygen than over those who decide to wait passively that provided from the new masks distrib- for the results of change’ (Azkarraga et al. uted in the name of postmodern manage- 2012, p. 76). In today’s globalized environ- ment. The Mondragón Experience requires ment, we require an affirmative but critical a closer connection with the renewed paths examination from within the Mondragón of humanization being proposed in today’s experience. Globalization promotes indi- world’ (Azkarraga et al. 2012, p. 79). In the vidualism with the result that the coop- Basque region, with the emerging dyna- erative modus operandi is changed and mism of ‘Chindia’ (a term used to describe risks losing its cooperative identity. As two of the five BRICS countries, namely Azkarraga states: China and India), the financial crisis has reinforced the need to innovate beyond [w]e have experienced an ideological emp- a business-­ entered view. In this context, c tying and the reinforcement of a new the Mondragón Corporación Cooperativa human profile that is more shallow, prag- (MCC) group has defined its response to matic and individualistic. The process of de-­deologization has affected the whole of i global markets over several years. In the society and, as members of that society, the past, during periods of growth, a techno-­ co-­ perative social body as well. (Azkarraga o centric approach prevailed. Now, however, et al. 2012, p. 78). from the more holistic stance of corporate social identity, the MCC must abandon this In this context, the original vision of the outdated approach and move forward. The Mondragón cooperative provides valuable MCC is being branded globally as social lessons for the present. Figure 16.2 shows entrepreneurship (Hulgård 2006), and in the presence of Mondragón cooperatives this chapter I attempt to demonstrate the worldwide, including 77 production plants importance of restoring communitarian and nine corporate offices. The challenges social capital to the business and academic for this network due to globalization are agendas. In other words, we believe that immense. The internationalization of the once the technocentric approach is super- cooperatives (Luzarraga et al. 2007), the seded by one based on an anthropocentric emergence of the BRICS (Brazil, Russia, view of social entrepreneurship, there is a India, China and South Africa) countries, risk that this view will prove no more than the ways in which China and India are a veneer for the threat of modern individu- revolutionizing global business patterns, alism: ‘triumphalist talent’. By ‘triumphal- the decrease in communitarian social ist talent’, we refer to the cases in which capital (CSC), the rise of individualism, entrepreneurial action succeeds in an indi- the gluttony of unfettered consumerism, vidualist manner and as a consequence and the growing individualization of life of one-­ one competitiveness (Calzada to-­ through virtual networking (e.g. the use of 2011a, p. 235). To understand this better, mass social networks) all contribute to the we can refer to the provocative and best-­ urgency of critically recovering the founda- selling book Funky Business (Riddestrale tions of the cooperative experience, which and Nordstrom 2000), which shows how is the core of social innovation. Hence, we companies are changing their size and need a strategic vision that accounts for methods of management and operation. both local and global realities. When we examine cooperative companies, The present is uncertain: it is reasonable we can also observe organizational changes MoULAERT PRINT.indd 221 06/03/2013 14:41
  • 4. MoULAERT PRINT.indd 222 Poland 6 Germany Czech Republic 5 8 Slovakia Belgium 1 2 Ireland 1 1 United Kingdom 3 Russia U.S.A. 1 1 1 4 Holland Romania 16 Portugal 4 Italy France 4 China 1 Mexico 1 2 13 7 Turkey 1 India 1 4 1 Morocco Taiwan 1 Columbia 1 Thailand 1 Vietnam 222 Brazil 1 6 Chile 1 Australia 1 Corporate offices (9) Production plants (77) Source:  Mondragón Corporación Cooperativa (2011). Figure 16.2  The international manufacturing presence of the Mondragón cooperatives 06/03/2013 14:41
  • 5. The Mondragón case from a social innovation perspective  ­23 2 from industrial conventional post-­ ordist F ism, which was originally too anthropo- companies to entrepreneurial-­etworked n centrically oriented. atomized business units. Moreover, a new generation of cooperative members is threatened by individualism. Thus, how 16.3 COMMUNITARIAN can we avoid the temptation to encour- SOCIAL CAPITAL (CSC) age ‘triumphalist talent,’ which encourages BUILDING IN MONDRAGÓN individualism and organizational anemia in universities and companies? How can The Mondragón experience was based on we establish a new generation of social the idea that community development is entrepreneurs according to the coopera- more important than economic progress. tive traditional synergy with the biocentric As a result, a number of small entre- approach, who can respond creatively to preneurial businesses gradually created a the current economic, social and environ- dense business network in a single valley. mental challenges? However, the increased sizes of the coop- We must strike a balance between eratives, the greater degree of interna- encouraging individualist and triumphal- tionalization and a move towards more ist forms of ‘social’ entrepreneurship with individualistic patterns of community and the need to structure communities, which civic life have lowered the levels of com- are the basis of the cooperative economy. munitarian social capital (CSC) to historic When we speak of communities, we refer to minimums. Today, therefore, the coop- self-­ overning actions that are initiated by g erative model faces a potential crisis, and a business, university or the scientific and there is a need to reformulate it from the technological world and that can extend ground up while preserving its cooperative to the level of public institutions and civil essence. In other words, there is an urgent and associative society. Ultimately, social need to build a new biocentric model of entrepreneurship should serve local com- development that does not harm the eco- munities. For example, universities are system but fosters lifestyles with a strong active agents of validation (trees) that host post-­ aterialist element based on respon- m many active agents of innovation, or social sible consumption, self-­ontainment and c entrepreneurs (bees). austerity. Let us examine some inspiring If the Mondragón experience is to adapt experiences connecting past and present in to today’s challenges, then it must initiate Mondragón. a biocentric path in which sustainability ORONA is a leading MCC interna- is not an addition but permeates the way tional cooperative company that is com- business is conducted, with the involve- patible with a biocentric perspective. This ment and proximity of local communi- company is a world leader in elevation ties. The biocentric approach reminds us systems and is currently developing an why the Mondragón experience has been ambitious strategic project called ORONA socially innovative in a communitarian IDeO, Innovation City (http://www.orona-­ manner, both economically and sustain- group.com/en/sections/we-­are-­orona/inn​ ably, and why we should recover those o​vation/orona-ideo-innovation-­city.php, values and activities to adapt them to last accessed 9  January 2013). The aim the present. This chapter’s analysis of the of this project is to build a research hub Mondragón experience shows how the led by an international company and biocentric approach can save cooperativ- the University of Mondragón to initiate MoULAERT PRINT.indd 223 06/03/2013 14:41
  • 6. 224  The international handbook on social innovation a ­ ialogue with the stakeholders of the d key social asset. Civil organizations for the Basque city region. The practical approach creation of Basque schools united people of ORONA IdEO is a good foundation with different ideologies to create a high from which to valorize the territory as a level of CSC. biocentric unit of the society, economy and Finally, the case of Auzolan (Calzada environment. 2011a, p.  243), or neighbourhood com- For the University of Mondragón, munity work, represents an historical ideal though, the primary effort in recent times and an experience from which important has been the promotion of projects and lessons can still be learned today. The initiatives not in international companies, roots of this civil movement began in the but in junior cooperatives. Although job Basque Country and are based on the same maintenance is supported by ‘traditional’ idea on which the Mondragón experience business and cooperative structures, the was founded. A revival of neighbourhood original driving forces behind the firms community work in several towns and belonging to the Mondragón group (some areas throughout the Basque country has of them: Orona, Maier, Eroski, Fagor and recently begun. One way of reviving this Ulma), today we should explore the possi- practice today to increase the level of CSC ble replacement of these ‘traditional’ struc- for towns and districts, which are micro-­ tures with global, dynamic, young, open, territories (Calzada 2011a, p.  241), is to networked and sustainable initiatives upgrade the concept of Auzolan to that of (similar to the business model promoted the Auzolab, a community laboratory for by Riddestrale and Nordstrom (2000). the development of neighbourhoods and This is the impetus behind the university’s ­ villages. LEINN (Enterprising and Innovative Leadership) degree, which is contributing to the formation of a new talent pool of 16.4 CONTEMPORARY social entrepreneurs which is consistent OPPORTUNITIES FOR THE with the vision of the Mondragón experi- BASQUE CITY REGION ence and that will enhance truly reticu- lar cooperative entrepreneurial business No analysis of the deterioration of CSC models (Calzada 2011a, p. 235). The future in the Mondragón experience and in the of social innovation lies not with large Basque country can ignore the political companies but with networked structures violence suffered by the Basque people. of social entrepreneurs. The consequences of this violence An interesting historical experience is include social withdrawal, the creation of the civil movement of support for the closed communities (archipelagos) and Ikastolas (schools in Basque) and the a damaged moral and social fabric that revival of the Basque language (Calzada has led to citizens’ disempowerment and 2011b). In the closing years of the Franco demoralization. As Bauman (2001) and dictatorship, the Basque society expe- Putnam (2001), noted, the loss of com- rienced major upheavals, with a strong munity values is inexorably linked to the social response on the streets. In addition erosion of CSC. In the Basque country, to numerous other demands, the element such erosion certainly influenced and even that largely united Basque society (despite paralyzed civil society (Innerarity and differences over ideological strategy) was Gurratxaga 2009; Elzo and Silvestre 2010; the revival of the Basque language as a Echeverría and Gurrutxaga 2010). MoULAERT PRINT.indd 224 06/03/2013 14:41
  • 7. The Mondragón case from a social innovation perspective  ­25 2 However, at the time of writing, a tion and remixes (Lessig 2008) between number of covert developments point in entrepreneurs in search of new oppor- the direction of a possible peace process. tunities and unexplored niches, creative After two years without attacks and a ecosystems must undergo the consolida- defusing of the dynamics that created tion/institutionalization (Calzada 2005) of vicious circles of political violence, there is relations and relationship patterns. When increased hope and opportunity for socio-­ we speak of institutionalization, we refer political change. This context offers an to the transition from an informal social opportunity to break the cycle of stagna- network to an institutional cluster. The tion and deterioration and to begin a new necessary condition for CSC is not the period of openness and inclusive work. mere presence of active (online) social net- The time may be right for the Basque works. Another condition, which now also country, as a geostrategic cross-­ order ter- b constitutes a new category of scientific ritory within the EU, to take ownership of analysis, is necessary: ‘Social Connectivity’ the decisions that affect it and to emerge as (Calzada 2011a, pp.  58, 215, 220). Social a Basque city region that we shall call ‘the connectivity should be understood as the Basque City’. linking of social networks at the commu- These changing socio-­olitical condi- p nity level with the purpose of activating tions point to a scenario of ‘normality’ consensus among diversity. against a backdrop of economic crisis and Ultimately, a creative ecosystem recession. Combined with a commitment needs its networked relationship pat- to strategic projects in emerging indus- terns to become dynamic and representa- tries, new CSC may generate opportunities tive of the structure of the system itself. for development. A specific opportunity is Unfortunately, an explanatory model has presented by new technologies, in the form not yet been devised from the perspective of trans-­ocal social connectivity. l of social innovation. However, we can observe that without social connectivity, 16.4.1  Strategies of Social Innovation: social networks will rise and fall without Social Connectivity, Social Networks creating lasting community value and and Reconfiguration in New ‘Glocal’ without generating CSC through dynamic Communities social networks that practice social con- nectivity on a daily basis. With the rise in online social networks (for Let us now examine the three constitu- example, Facebook, Twitter and Linked ent elements of CSC (Burt 2005) bonding, In), there is a tendency to confuse the bridging and linking for the Basque City: emergence of new relational patterns with the consolidation of CSC. In other words, ●● Bonding: an important starting increased interaction on social networks point is to overcome the scenario of does not necessarily lead to a substantial political violence to create the nec- increase in CSC. Evidently, social net- essary conditions for bridging the works are creating relational flows that gap between different agents. We would have been inconceivable only a assume that bonding through social few years ago and constitute an essen- entrepreneurship in the university-­ tial phase of recombination and intersec- company-­ public institution triad tions (Johansson 2004) for innovation. is now bearing its first fruits. In However, after a first step of recombina- the past, the distances between the MoULAERT PRINT.indd 225 06/03/2013 14:41
  • 8. 226  The international handbook on social innovation e ­ lements of this triad were immense; lation and response mechanism. We begin however, the collaborative work by quoting Azkarraga, who insists that being conducted by the university is ‘[i]t clearly seems inconsistent to set up a playing a leading role in strengthen- cooperative metropolis with a capitalist ing this triad. periphery. (. . .) But the cooperative group ●● Bridging: one disturbing aspect does not yet have a model of internation- of bridging is the style of social alisation of its own, a model that also in entrepreneurship being promoted, one way or another internationalises the which conflicts with the creation of cooperative idea.’ (Azkarraga 2007, p. 5) CSC because it demands a profile The great challenge for social innovation of ‘triumphalist talent’. This con- research lies in the formulae, methodolo- flict is also paradoxical because it gies, case studies and lessons to be learned is unrelated to the basic principles from the processes of internationalizing of the Mondragón experience. We the cooperatives (see Figure 16.2) that cur- encounter the risk of encouraging rently form the flagship of the Mondragón the emergence of an individualistic experience. These cooperatives alone do entrepreneurship with no bridging not create a competitive advantage for and no CSC-­ uilding process. b strategic positioning in global markets. ●● Linking: social networks are leading Considering this situation of maximum us towards new ‘glocal’ scenarios global uncertainty, we must explore a new in which social innovation seeks to concept of social entrepreneurship in dif- deal with similar questions in geo- ferent emerging industries: entrepreneurs graphically different points: ‘glocal’ with large glocal networks who are highly means that the local and global are specialized and prepared to form or lead interlinked. Thus, we are building culturally and thematically diverse teams. arrangements in trans-­ocal param- l However, some questions remain unan- eters in which the power of the local swered: what specific organizational/ territory acquires a new dimension cooperative form would provide cover- on the global map. In other words, age, projection, autonomy and freedom we are increasingly interested in of movement to these new social entrepre- experimenting with local Auzolabs, neurs, individually, in teams or in glocal which are inter-­onnected to favor c cells? Is it possible to speak of ‘intrapre- trans-­local learning. Linking has neurship’? Are the ‘driving’ cooperatives prime importance in this dimension. willing to encourage social entrepreneurs to Given that it is essential to recover join their structures? Does the Mondragón CSC, social innovation must be experience currently allow these social implemented today with strategies entrepreneurs to work towards the future that include the glocal dimension of the Mondragón brand? Is there not a (Calzada 2011a, p. 220). risk that their efforts will be dissipated into small and unconnected initiatives? Is there 16.4.2  Glocalization, Social a way to maintain two speeds of develop- Entrepreneurship and Cooperativism in ment (one traditional and mature and the Mondragón other emerging but voluntary or idealist)? Is it possible for these speeds to converge? This section examines new paradoxes and Let us recall that the Mondragón expe- problems that may serve to spark an articu- rience originated with a few social entre- MoULAERT PRINT.indd 226 06/03/2013 14:41
  • 9. The Mondragón case from a social innovation perspective  ­27 2 preneurs under the protection of the local entrepreneurially based ‘cooperativism’ community. They were small groups with should ignore the community or make close social relations in this local commu- the individual the primary driving force nity. The situation at that time was more behind all change (i.e. an anthropocentric comfortable than the current situation and vision). In a social innovation approach, was characterized by social, cultural, com- we employ a biocentric focus that involves municative and psychological proximity. social entrepreneurship in a variety of Today, in contrast, the Mondragón case cooperative roles.1 comprises 83,859 individuals in a coop- The real issue for the Mondragón expe- erative group of more than 256 companies rience today is that no cooperative forms with a high degree of complexity, social of society currently articulate the new differentiation and organizational archi- creative ecosystem on a systematic basis. tecture. There has been a move from a One of the great challenges for coopera- geographical concentration to a clustered tive firms is to adopt this articulation as relocation on a global scale. a prelude to being a true social innovator. This new geography of clustered reloca- tion affects the social networks (Cohen 16.4.3  Social Entrepreneurship vs. Public 2012) generated in the socio-­ business Sector? Noise and Silence world: relationships between cooperative workers, social entrepreneurs, researchers, A related matter – and without wishing consultants, managers, teachers, and the to enter a slippery polemic but rather to entire community network in which they examine the real situation directly – is operate. The following essential questions the paradox of the current socioeconomic must be answered: how will those social system. In the midst of a crisis and reces- networks initially be created? How will sion, there is support for entrepreneurship, they be consolidated to create new com- but which type of entrepreneurship is being munitarian social capital? Could these net- discussed? Moreover, is entrepreneurship works build a new cooperative horizon for the most important type of agency in the social entrepreneurs based on cooperative current crisis? This tension is expressed principles? in the contrast between the ‘noise’ gener- Azkarraga identified a key challenge to ated by the frustration of the Spanish these new social and spatial configurations 2011 protest movement, the ‘Indignados’ stating that: (Harvey 2012), and the silence on the part of many agents in the system who have the an ideological horizon was lacking that social responsibility both to survive the would embrace the different self-­ anaging m social scenarios within an integrating frame- recession and to take on a new approach work. The cooperative valley has not been to social transformation. I am essentially nourished by the necessary ideological, referring to the leaders of private finan- symbolic and intellectual impetus. There cial institutions and the politicians who has been no comprehensive project and no apply only partial measures in their areas vision to mark this orientation since the death of Arizmendiarrieta. This new vision of influence, with the excuse that global offers a real possibility of overcoming this issues are beyond their reach. shortfall. (Azkarraga 2007, p. 6) When one considers the discourse of entrepreneurship for the sake of entrepre- Here, we can identify the first obstacle. neurship, there is a tendency to overlook One cannot simply propose that a new the necessary public service reforms. The MoULAERT PRINT.indd 227 06/03/2013 14:41
  • 10. 228  The international handbook on social innovation Basque city region has an oversized public action shared by companies, universities administration that is bureaucratized and and public administrations. sometimes inefficient because of redun- However, this transition undoubtedly dancy and overlap (Calzada 2011a, p. 265). requires five key changes: (a) the change How can this problem be addressed? in the energy matrix and the transition Social innovation strategies should towards a greater self-­ ufficiency; (b) busi- s encourage a spirit of social entrepreneur- ness reorientation towards the creation ship within a wider dynamic of coop- of ‘green’ products; (c) job creation poli- erativism. In this regard, companies and cies; (d) policies related to innovation, public institutions must commit to the science and technology; and (e) a pro- new dynamic biocentric approach based found cultural change in the cooperativ- on the creative ecosystem. Furthermore, ist social body. The biocentric approach a review of the forms and functions of will produce a new eco-­ socioeconomic public service is imperative, both from paradigm in which social innovation is the perspective of management and effi- the strategy and the city region is the ter- ciency and in terms of citizen solidarity ritorial concept for the post-­008 crisis 2 and democracy. scenario. In summary, we aimed to propose from a social innovation approach stepping 16.5 CONCLUSION stones, not only to allow the Mondragón cooperative group to meet new challenges Articulating the Mondragón experience but also to empower the hopeful reality of with the territorial and community-­ ased b the Basque country as it establishes itself development of the Basque city region as a Basque city region. involves a move from a technocentric and anthropocentric approach to a biocentric one. 16.6  QUESTIONS FOR We must identify how to make the DISCUSSION transition from an experiment in socio- economics to one in eco-­ocioeconomics. s ●● How can we design more social As noted above, this transition requires innovation projects, like IDeO and the companies of the Mondragón group, LEINN, in which companies and the University of Mondragón’s research universities develop a new biocen- projects and students, and the Basque tric approach to cooperativism? In country, as a networked territory known doing so, can we avoid the trium- as the Basque city region, to consider this phalist and individualistic entrepre- territory a primary asset. The ORONA neur’s ‘dangerous’ business style? IdEO, Innovation City and LEINN pro- ●● Are these two projects the seeds with jects are good examples of the practical which to plant local urban crea- consequences of social innovation. New tive communities in the Basque city green economy jobs, projects, companies region? and public policies ought to be supported ●● What role could an academic per- through the pollination and co-­reation c spective on territorial development processes of the urban local creative eco- and social innovation (MacCallum system. In the case of Mondragón, this et al. 2009) play in the future design support should take the form of collective of services, and even products, in a MoULAERT PRINT.indd 228 06/03/2013 14:41
  • 11. The Mondragón case from a social innovation perspective  ­29 2 new eco-­ ocioeconomic paradigm in s Amazing Power of Social Networks and How They Mondragón? Shape Our Lives, London: HarperPress. Cohen, N. (2012), You Can’t Read This Book: ●● How can the University of Censorship in an Age of Freedom, London: Fourth Mondragón develop its sensitivity Estate Press. to the value of territory and business Echeverría, J. and A.  Gurrutxaga (2010), La luz de la luciérnaga: Diálogos de Innovación Social, design simultaneously? Donostia-­San Sebastián: Edit. Ascide, pp. 121–123. Elzo, J. and M.  Silvestre (eds) (2010), Un individu- alismo placentero y protegido: Cuarta Encuesta Europea de Valores en su aplicación a España, NOTE Bilbao, Universidad de Deusto. Glaeser, E. (2011), Triumph of the City, Oxford & 1. In this context, we can revisit the University London: Pan Books. of Mondragón’s new LEINN degree, to ask Harvey, D. (2012), Rebel Cities: From the Right to the whether the pool of social entrepreneurs it is City to the Urban Revolution, London: Verso. creating is consistent with the vision of the Hulgård, L. (ed.) (2006), Social Enterpreneurship and Mondragón experience? How can we ensure a the Mobilization of Social Capital in European truly reticular cooperative entrepreneurial busi- Social Enterprises: A Public-­ Third Sector ness model? Partnership, London: Routledge. Innerarity, D. and A.  Gurratxaga (2009), ¿Cómo es una sociedad innovadora? Bilbao: Innobasque-­ Innovación Social. REFERENCES Jacobs, J. (1984), Cities and the Wealth of Nations, New York: Random House. Johansson, F. (2004), The Medicci Effect. (References set in bold are recommended reading.) Breakthrough Insights at the Intersection of Ideas, Azkarraga, J. (2007), Mondragón ante la globali- Concepts and Culture, Boston: Harvard Business zación: la cultura cooperativa vasca ante el cambio School Press. de época, Eskoriatza, Gipuzkoa: Cuadernos de Lessig, L. (2008), REMIX: Making art and commerce LANKI, no 2, Mondragón Unibertsitatea. thrive in the hybrid economy, New York: Penguin Azkarraga, J., G.  Cheney and A.  Udaondo (2012), Press. ‘Workers Participation in a Globalized Market: Luzarraga, J.M., D.  Aranzadi and I.  Irizar (2007), Reflections on and from Mondragon’, in Maurizio ‘Understanding the Mondragón Globalization Atzeni (ed.), Alternative work organizations, Process: Local Job Creation through Multi-­ London: Palgrave. Localization: Facing Globalization Threats to Bauman, Z. (2001), Community: seeking safety in an Community Stability’, paper presented at the 1st insecure world, Cambridge: Polity. CIRIEC International Research Conference on Burt, Ronald S. (2005), Brokerage and Closure: Social Economy, Victoria, Canada. An Introduction to Social Capital, Clarendon MacCallum, D., F.  Moulaert, J.  Hillier, S.  Vicari Lectures in Management Studies, Oxford: Oxford Haddock (eds) (2009), Social Innovation and University Press. Territorial Development, Aldershot: Ashgate. Calzada, I. (2005), Cultura, Conocimiento, Innovación Mondragon Corporación Cooperativa MCC (2011), y Gestión: Las Clases Creativas en la Euskal Hiria, Annual Corporate Profile, http://www.mondragon-­ Vitoria, Revista Vasca de Economía, Ekonomiaz corporation.com/mcc_dotnetnuke/Portals/0/docu​ and Euskonews. mentos/eng/Yearly-­Report/Yearly-­Report.html Calzada, I. (2011a), ¿Hacia una Ciudad Vasca? (last accessed 9 January 2013). Aproximación desde la Innovación Social, Vitoria-­ Mulgan, G. (2007), Social Innovation: What it is, why Gasteiz: Edit. Servicio Central de Publicaciones del it matters and how it can be accelerated, London: Gobierno Vasco. The Basingstoke Press. Calzada, I. (2011b), Towards the Basque City? Murray, R., J. Caulier-­ rice and G. Mulgan (2010), G Comparative Territorial Benchmarking from Social The Open Book of Social Innovation, Social Innovation: Dublin (Ireland) & Portland (Oregon), Innovator Series: Ways to design, develop and grow Bilbao: Innobasque-­ asque Innovation Agency. B social innovation, London: Nesta. Capra, F. (1996), The Web of Life: A New Synthesis Putnam, Robert D. (2001), Bowling Alone: The of Mind and Matter, London: Harper Collins. Collapse and Revival of American Community, Castells, M. (2009), Comunicación y Poder, Madrid: London: Simon & Schuster. Alianza. Riddestrale, J and K.  Nordstrom (2000), Funky Christakis, N. and J. Fowler (2011), Connected: The Business, London: Pearson. MoULAERT PRINT.indd 229 06/03/2013 14:41