Project of the Day: The cooperative University of Mondragon

David Matthews reviews the experience of the cooperative university of the Mondragon in the Basque country (excerpts):

“Can the University of Mondragon, an established higher education cooperative in the lush green mountains of the Basque Country in northern Spain, offer any answers for academies elsewhere? Founded in 1997 from a collection of co-ops dating back to 1943, the institution now has 9,000 students. The staff have joint ownership and the institution’s culture and its model of governance are radically different from those of modern UK universities.

Times Higher Education went to see how and why they do things differently at Mondragon, and to consider whether some of its practices might appeal to UK scholars looking for a new model for the academy.

Even before arriving in Spain, there is one obvious difference about Mondragon – it does not have a press office to restrict access to the top brass or vet comments by its employees. Instead, THE’s trip was arranged directly through teaching and administrative staff. And on arrival, transport was provided by the vice-chancellor, Jon Altuna, who drove from campus to campus – with the occasional stop-off for tapas and wine.

Mondragon is jointly owned by its academic and administrative staff. To become a fully fledged member, employees have to work there for at least two years, and then pay €12,000 (£10,300), which buys a slice of the university’s capital that can be withdrawn upon retirement.

However, it is unlikely that anyone employed by the university expects to earn enough to build a personal art collection or buy membership to an exclusive private members’ club: no one at Mondragon may earn more than three times the salary of the lowest-paid worker.

This is a far cry from the UK, where in 2008 the ratio between the highest- and the lowest-paid workers in higher education was, on average, 15.35:1, according to the 2011 review of fair pay in the public sector led by Will Hutton – a bigger gap than found in any other part of the public sector.

There is one exception at Mondragon, though: the rector, the closest thing the university has to a chief executive, is permitted to take home five times the lowest wage – although even this relative largesse was agreed only after “huge argument”, Altuna notes.

Excluding cleaners and catering staff, who are subcontracted, the lowest-paid staff, such as administrative and maintenance workers, earn €27,421 a year. The highest-paid managers earn just over three times this amount, while the current rector earns about €157,000. “We are not in this project for [personal] profit-making,” Altuna says with a smile.

Although the university’s student population is relatively small, at about 4,000 (it offers 21 undergraduate, 12 master’s and three PhD programmes), another 5,000 people a year undertake professional training at Mondragon. “We want to be one of the main agents in making companies competitive,” Altuna says.

He is referring to the fact that the university is in effect the training and research-and-development arm of a wider network of interlocking cooperatives, known collectively as the Mondragon Corporation.

Discard any quaint images you might have of basket-weaving communes eking out a trade in the Basque hills. The corporation employs more than 80,000 people and had a revenue of €14 billion in 2012. It is the largest cooperative in the world and has 94 production plants outside Spain. Its factories manufacture white goods, industrial components and road bikes, while its construction wing built Bilbao’s swooping silver Guggenheim Museum.

The university has a highly democratic governance structure. Its supreme body is the general assembly, a 30-strong committee of representatives composed of one-third staff, one-third students and one-third outside interested parties, often other co-ops in Mondragon Corporation. It meets annually to decide on the priorities for the coming year and has significant powers: it can, for example, sack members of the senior management team. (It last used this power in 2007 when one manager was dismissed, according to Altuna.)

Meanwhile, administrators make up just one in four workers, compared with 52 per cent in the UK higher education sector, according to 2011-12 figures from the Higher Education Statistics Agency.

Mondragon is also highly decentralised. “We say that the chancellor [also known as the rector] has less power than the deans,” says the current holder of the top post, Iosu Zabala Iturralde. (Zabala appears to be the only member of staff who wears a tie – but he does not go as far as wearing a suit jacket.)

The university has four faculties: business studies; engineering; humanities and education; and, since 2011, “gastronomic” science, the theory and practice of cookery. The first three began life as separate colleges, and merged into a university in 1997. Each faculty is its own cooperative, which makes Mondragon a kind of “cooperative of co-ops”, and each department has substantial autonomy. They do not even share the same academic calendars.

Each faculty also has “total freedom to leave the project”, Altuna says. There was a lot of debate in the early days of the university about the wisdom of the faculties joining forces, he explains, but only by combining several subjects could Mondragon become a university and award its own degrees. Now they have lost their distinct identities, making it very difficult for them to break away, he thinks.

What also makes the university unusual is that its three founding faculties are spread across five towns in the Alto Deba region, the heart of the Basque Country. Most are “remote” locations, Altuna admits, estimating that none has a population of more than 10,000. Only in recent years has Mondragon set up bases in the cities of San Sebastian and Bilbao.

Mondragon places a strong emphasis on transparent governance. For example, any worker in the Faculty of Engineering can check on the expenses of any of their colleagues – with enough detail provided to make it possible to work out which restaurants they have been to and when, Altuna explains.

Its students and staff say the institution has a very different ethos from those of traditional universities. As Raquel Pangua, a fourth-year undergraduate training to be a teacher, puts it: “We are like a family. We all work together – the university gives a lot of importance to group work. In public universities, they mostly work in an individual way, and maybe tutors don’t have that close a relationship with their students. We have a really close relationship with teachers.”

So Mondragon has equality, autonomy, openness, transparency and no ties. Are there any catches? Plenty, as it turns out.

Mondragon is a private university, and thus it receives minimal public funds. Just over a 10th of its income comes from the Basque government’s structural funding, although the institution’s suite of new buildings – including the architecturally bold €17 million Basque Culinary Center in San Sebastian, designed to look like a stack of crooked plates from the outside – are largely funded by the Basque and Spanish administrations.

There is little room for the humanities: degrees are almost exclusively vocational. Mondragon offers bachelor’s degrees in mechanical, computer, biomedical and energy engineering, business administration and management, primary education and gastronomy and culinary arts. The master’s courses are largely in similar areas, although there is an MA in social economy and cooperativism.

Almost a third of Mondragon’s income comes from technology and knowledge transfer fees. It develops new products for the corporation’s engineering firms, consults for local businesses and advises schools in the region.

As a point of comparison, UK universities earned just 7.3 per cent of their income from research contracts with UK-based industry, charities and public bodies in 2011-12, according to Hesa.

Mondragon’s heavy dependence on technology transfer income means that “there is no ground for research that has no return”, Altuna says.

Still, there is no sense that academics at Mondragon begrudge the lack of opportunities to conduct blue-sky research; if anything, they seem proud that their work is being put to good use. But Altuna freely admits that some researchers “cannot understand it”. “They have quit and gone to a public university,” he says.

“I think some of the values have been lost along the way,” Martin observes. “Going to any meeting here, and any meeting in a public limited company, there is no difference. This is happening in all the co-ops in Mondragon.”

The cooperative spirit has become perfunctory, he believes. “It’s like going to church, where you can go just on Sundays and listen to the priest and you are a Christian,” he says.

Fred Freundlich, a US academic who has been working at Mondragon since the 1980s and lectures in business studies, says he has observed a decline in camaraderie. Fewer workers now eat their lunch together or go out for a glass of wine after work, he says.

One of the benefits of Mondragon’s ethos, he observes, is its highly collaborative research style. He contrasts this with the US where, he says, “the culture is that faculty members may end up collaborating but each one is there to do their individual research”. But these days, even at Mondragon, researchers can be more reluctant to invite others to join their projects, focusing instead on trying to clock up as many of the hours they are required to work as possible, he says.

Freundlich thinks this is symptomatic of wider social change. In a bid to revive some of the older values, he is bringing in co-op “veterans” to explain to younger staff how they used to work together.

Other social pressures are chipping away at the sustainability of the project. The Basque Country, like much of southern Europe, has a rapidly ageing population. “Not only in the Basque Country, but Spain generally, there are too many universities, and there’s not enough domestic demand to keep them running,” Freundlich observes.

Mondragon is looking to expand its activities overseas, principally into South and Central America, both to spread its ideas and to create new markets for the companies in the corporation. “The only way that our project can survive is to create activities in countries that are developing,” Altuna says.

The university is helping a network of about 40,000 non-profit businesses in Colombia turn a private university into a higher education institution that will serve them with training and research. Mondragon is providing governance experts, lecturers and researchers. It has also acquired 80 per cent of a private university in Mexico.

The plan is to eventually turn these two institutions into co-ops, but for the moment, the idea is too radical to implement in those countries, Altuna says. Indeed, many subsidiaries of cooperative businesses outside Spain are not co-ops, he says. The idea is an alien one in China, for example.

But in South Korea, people are going “crazy” for cooperatives, Martin says, and the university receives regular delegations from countries where there is curiosity about the project.

“It is impossible to recreate our model outside Mondragon,” Altuna says. “But it is possible to spread some of the culture and ideas of our version of higher education.”

Whether a cooperative university could flourish away from the special circumstances found in the close-knit Basque Country is unclear. But it may offer hope to those unhappy with the academy’s present direction in the UK and elsewhere.”

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