New Frontiers for Employee Ownership in Latin America

Partnership
Initiative

Background

The Instituto Tecnológico y de Estudios Superiores de Occidente (ITESO) and the Consejo Empresarial de Jalisco (CEMJAL) in Mexico, the University of Aix-Marseille and the ESSCA School of Management in France, and the Pontificia Universidad Católica del Perú (PUCP) are key members of the Partnership that implemented the Triangular Cooperation Initiative on Employee Ownership for Economic Democracy in the private sector, under the 2023 edition of the ADELANTE Window.

Building on the success of this Initiative and the interest it sparked in the Latin American and Caribbean (LAC) region, the partnership decided to expand research on Employee Ownership models to include Argentina and Colombia. To achieve this, they collaborated with academic and civil society organizations, bringing into the Partnership EnTerrenoSocial from Argentina, an organization specializing in the design and implementation of triple-impact strategies and projects; the Universidad Católica de Córdoba (UCC) in Argentina; and the Universidad de los Andes in Colombia—both recognized for their research expertise in economic and social development.

The Partnership will also benefit from the expertise of several collaborating entities, including the Pontificia Universidad Católica Argentina, the Centro de Capital Incluyente, and the Instituto Tecnológico y de Estudios Superiores de Monterrey (TEC) in Mexico, as well as the Institute for Economic Democracy (IED) in Slovenia.

Entities and roles

Beneficiary entities

Universidad Católica de Córdoba

Argentina

EnTerrenoSocial

Argentina

First provider entities

Instituto Tecnológico y de Estudios Superiores de Occidente

Mexico

Consejo Empresarial de Jalisco

Mexico

Pontificia Universidad Católica del Perú

Peru

Universidad de los Andes

Colombia

Second provider entities

ESSCA School of Management

France

Université d'Aix-Marseille

France

Collaborating entities

Centro de Capital Incluyente, Mexico

Institute for Economic Democracy - IED, Slovenia

Instituto Tecnológico y de Estudios Superiores de Monterrey, Mexico

Pontificia Universidad Católica Argentina, Argentina

Development challenges

Through this Triangular Cooperation Initiative, the partnership entities will collaborate to share knowledge and develop a broad-based employee ownership (BBEO) model tailored for Latin America, drawing from European and Mexican experiences. Additionally, the Initiative aims to build capacity to promote BBEO as a tool for fostering social peace and reconciliation in collaboration with both the private and public sectors.

The overarching goal is to advance inclusive and sustainable development in alignment with SDG 8 by improving employee productivity, enhancing business performance, and driving financial success through cost savings and increased profitability. This Initiative also seeks to generate valuable insights for public policy and democratize access to financial instruments. Moreover, it addresses SDG 1 by contributing to equal access to economic resources through mechanisms that facilitate the democratization of ownership in various forms.

This Triangular Cooperation Initiative seeks to strengthen the capacities of the Partnership entities to create a broad-based employee ownership model for Latin America based on the European and Mexican models that are characterised by an orientation towards inclusion, equity, and a horizontal approach.

Triangular approach

Research shows that broad-based employee ownership (BBEO) can enhance corporate performance, increase resilience during crises, reduce income and wealth inequality, and help eliminate working poverty. This Initiative explores how BBEO can contribute to achieving the Sustainable Development Goals (SDGs) and proposes a policy model to scale BBEO in Argentina, engaging in joint research and policy recommendations while drawing on the experiences and insights from France, Slovenia, and the eurESOP model.

Through the "Employee Ownership for Economic Democracy in the Private Sector" Initiative, launched under the 2023 edition of the ADELANTE Window, the Partnership identified key conditions for successfully implementing BBEO in Latin America. Many firms in Jalisco have already expressed interest in adopting the MexESOP model. These cases offer an ideal context to analyse the factors that enable BBEO implementation and its impact on employee well-being and firm performance. By studying the experiences in Argentina, Colombia, Mexico, and Peru, the research team will consider contextual factors—such as governance structures, business culture, and institutional frameworks—when designing strategies and public policies for the development of a Latin American ESOP model. This model, in turn, will inform policy-making in other Latin American countries and provide a scalable solution across the region.

The Initiative also leverages France's extensive experience in BBEO research and the legal innovations introduced by Slovenia with the European ESOP. France leads Europe in employee financial participation, with 40% of European employee owners working in French companies. Historically, most French BBEO has been concentrated in large, listed companies, supporting the hypothesis that BBEO can help achieve the SDGs. The challenge has been extending BBEO to the SME sector. Slovenian partners have successfully standardized the leveraged employee buyout model otherwise known as the ESOP model, currently institutionalized in the US, the UK, and Canada. They have established a proof of concept in Slovenian businesses and are now working with the Slovenian government to pass the Slovenian ESOP legislation.

By collaborating, the partnership will share insights and experiences from different cultural and legal contexts, generating new, emergent knowledge. This learning will be enriched through events involving key stakeholders—including companies, experts, investors, policymakers, students, and academics—who will participate in meetings and site visits during the Initiative. These events aim to discuss how the European ESOP model can be adapted for the Latin American context. Drawing on their direct experience working with businesses on BBEO, the Partnership will develop a specialized Latam ESOP model for Argentina, including both conceptual and legal frameworks.

The Latam ESOP model will be documented in a white paper outlining its key structural features and will be presented at events organized by the Partnership in Argentina and Colombia. These events will bring together key stakeholders to facilitate the Latam ESOP as a development strategy aligned with SDGs 1, 8, 10, and 17. The feedback gathered during these events will contribute to refining the Latam ESOP model, addressing challenges specific to the Argentinian context and ensuring its effectiveness as a tool for sustainable development.

Sectoral approach - Contribution to the 2030 Agenda

Primary SDG

Goal 8.1 Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries

Goal 8.2 Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors

Goal 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

Goal 8.10 Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all

Secondary SDG

Goal 1.4 By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance

Goal 1.B Create sound policy frameworks at the national, regional and international levels, based on pro-poor and gender-sensitive development strategies, to support accelerated investment in poverty eradication actions

ADELANTE SDG

Goal 10.2 By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status

Goal 10.3 Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and action in this regard

Goal 17.4 Assist developing countries in attaining long-term debt sustainability through coordinated policies aimed at fostering debt financing, debt relief and debt restructuring, as appropriate, and address the external debt of highly indebted poor countries to reduce debt distress

Goal 17.9 Enhance international support for implementing effective and targeted capacity-building in developing countries to support national plans to implement all the sustainable development goals, including through North-South, South-South and triangular cooperation

Goal 17.14 Enhance policy coherence for sustainable development

Goal 17.16 Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the sustainable development goals in all countries, in particular developing countries

Territorial approach

Intervention methodology

The Initiative will begin with the launch of a comprehensive international research project involving all academic partners and collaborators. This will consist of an in-depth study, including a detailed diagnosis of the current state of employee ownership in Argentina. The research will involve literature reviews, qualitative studies, and survey analyses, with the findings disseminated through specialized journals and university channels.

Following the research, the partnership will conduct study visits to Argentina and Colombia, with meetings in Buenos Aires, Córdoba, and Bogotá. These meetings will involve business and political leaders, social organizations, cooperatives, and academic institutions. The goal is to present the study’s findings on the benefits of employee ownership and to identify the challenges involved in implementing these models.

In parallel, a consultancy will provide support by offering insights into country-specific technical solutions and applying its expertise to develop an Argentine ESOP Viability Analysis. Building on the experience of the previous Initiative, this analysis will incorporate the cultural and legal context of Argentina and will feature a standardized description of the employee ownership model, along with policy proposals to promote widespread adoption of employee ownership in the country. The consultancy will also organize workshops with relevant stakeholders in Argentina to share the Partnership’s experiences with the ESOP model and gather local input.

The final phase will include a virtual workshop to present and disseminate the initiative’s results.

Throughout the Initiative, there will be a strong emphasis on gender mainstreaming, environmental sustainability, and climate change. These themes will be highlighted in specific case studies and will be incorporated into joint activities, particularly within the framework of the Latam ESOP model.

Direct beneficiaries (individuals)

According to Rule 9 of the Guidelines for Applicants: all persons participating in the activities of the Initiative.

This Initiative is expected to benefit more than 230 individuals, from researchers and students affiliated with partner academic institutions to business leaders, public officials and civil society invited to participate in the study and activities.

In addition, there is a strong potential of reaching broader business groups where issues of economic democracy and the human rights of workers can be advanced.

Budget

EU contribution: 130,045.00 €

Co-financing - Triangular Cooperation Partnership: 127,575.00 €

Total budget: 257,620.00 €

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