Employee ownership for economic democracy in the private sector

Introduction

This initiative was a Triangular Cooperation effort, developed with the support of the ADELANTE Window, to address pressing challenges such as inequality, poverty, and stagnant economic growth, particularly in Mexico.

Objectives

This Triangular Cooperation Initiative facilitated knowledge sharing among the Partnership entities to develop a model for employee share ownership plans, based on the experience of the Provider entities, and sought to promote economic democracy in the private sector through inclusion, equality and a horizontal approach.

Exploring employee share ownership for sustainable development

Through this Triangular Cooperation Initiative, the Partnership member entities explored the potential of employee share ownership schemes as a strategy to contribute to the 2030 Agenda. The initiative sought to introduce a specialized model for Mexico (MexESOP), incorporating conceptual and legal frameworks based on experiences from:

• Peru
• France
• Slovenia
• The eurESOP model

Leveraging international expertise

The research entities leading the initiative were:

• Western Institute of Technology and Higher Studies (ITESO, Mexico)
• University of Aix-Marseille (France)
• ESSCA Business School (France) – experts in employee share ownership research in France’s dynamic business environment.
• University of Ljubljana (Slovenia) – specialists in transferring the European ESOP model to other countries.
• Pontificia Universidad Católica del Perú (PUCP, Peru) – a leading research center in economic and democratic studies, with notable expertise in employee share ownership schemes and prior collaboration with the Partnership’s academic entities.

Developing a tailored employee share ownership model for Mexico

The Partnership leveraged its first-hand experience collaborating with companies on employee share ownership to establish MexESOP, a specialized model for Mexico, which included:

• A conceptual and legal structure adapted to the Mexican economic and legal framework.
• A strategy to consolidate economic democracy as a tool to tackle inequality and poverty.
• A framework for engaging key stakeholders in promoting inclusive economic strategies.
• The adoption of innovative tools and capacity-building initiatives for small and medium-sized enterprises (SMEs) in Mexico.

By integrating global expertise, strengthening policy frameworks, and fostering inclusive economic participation, this initiative contributes to building a more equitable and sustainable economic model for Mexico.

Project activities

This initiative was structured around eight key activities, fostering academic research, discussions with key actors, and strategic study visits among Partnership member entities. The objective was to create opportunities for reflection and training to develop a roadmap for joint research and policy recommendations, ultimately leading to a policy framework for expanding employee share ownership in Mexico.

Key activities included:

• Capacity building: training Mexican representatives on employee share ownership schemes, providing tools to support implementation and advocacy.
• Model implementation: developing the MexESOP roadmap adapted from the European ESOP model, including:
  • Feasibility study for a pilot project.
  • High-level policy proposal outlining key legislative elements.
• Policy development: events enabled:
  • Advancement of local policies on economic democracy.
  • Awareness-building in the private sector.
  • Assessment of MexESOP's viability and recommendations for policy support.
• Research collaboration: academic research teams carried out a study assessing:
  • The state of economic democracy.
  • Employee share ownership models in Jalisco, Mexico.
• Community engagement: Three seminars open to universities, businesses, civil society organisations, and women entrepreneurs included:
  • A diagnostic survey.
  • Two closing meetings to share results and gather feedback.

Cross-cutting themes

Throughout the initiative, a strong emphasis was placed on:

• Gender mainstreaming
• Environmental sustainability
• Climate change

These themes were highlighted in specific case studies and incorporated into joint activities, particularly within the MexESOP framework, ensuring a sustainable and inclusive approach to economic democracy in Mexico.

Results

Through this Triangular Cooperation Initiative, the knowledge and expertise of the Partnership's member entities and collaborating organizations were leveraged to develop a roadmap for joint research and policy recommendations, resulting in a policy framework aimed at expanding employee share ownership in Mexico.

This effort culminated in the final document titled: "Employee Ownership and Economic Democracy Potential in Jalisco, Mexico: A Qualitative Study."

Contribution to the Sustainable Development Goals (SDGs)

The results of the initiative contributed to and aligned with SDG 8, particularly the following targets:

• Target 8.1: "Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries."
• Target 8.2: "Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation, including through a focus on high-value-added and labor-intensive sectors."
• Target 8.3: "Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation, and encourage the formalization and growth of micro-, small-, and medium-sized enterprises, including through access to financial services."
• Target 8.10: "Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance, and financial services for all."

By fostering economic democracy, financial inclusion, and sustainable business practices, this initiative contributes to more equitable economic growth, job creation, and long-term economic resilience in Mexico.

Implementing partner

Instituto Tecnológico y de Estudios Superiores de Occidente (Western Institute of Technology and Higher Studies- ITESO, Mexico)