Also, probably been said but “efficiency” has little to do with it. Cooperatives can be “efficient”, as in producing revenue per worker competitive with similar companies. The cooperative form is not conducive to drawing investment, which has traditionally limited their growth. However, this does not necessarily apply to certain cooperative forms, which have been more successful than others. Workers cooperatives are some of the least common of the models.
For instance, a small business kind of workers coop, like a restaurant or something, is a lot easier to start than a paper mill or a brewery or something. The capital requirements mean that all the cooperative members need to have a good chunk of money saved, or that they need to be able to find a generous lender. But a capitalist entrepreneur can often find privately wealthy investors (often through prior connections) who will partner for equity to start up a venture. Lack of equity for potential investors makes startup of larger ventures seem particularly risky in the cooperative sphere, because all you’ll get is maybe junk bond interest rates. But if you get equity you could double your investment through the cash distributions or an eventual sale of the business. The availability of that kind of upside in the rest of the market makes capital advanced to the cooperative sector more scarce, so that naturally the traditional capitalist sector has much higher probability of producing big growth firms that dominate the market, which is what we see.
So if workers cooperatives are to expand they either need to find a new model for raising capital, or they need to have some beneficial state grants and lending programs. There also needs to be more education about how to start a cooperative, because it is not even something on most people’s radar.