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The basics:

• Rutgers launches Employee Ownership Applied Research Lab
• Initiative targets ‘silver tsunami‘ of retiring small business owners
• Focus on ESOPs, worker cooperatives as succession solutions
• Lab provides free tools, data, guidance for business transitions

Rutgers University launched a new Employee Ownership Applied Research Lab, through the Rutgers Institute for the Study of Employee Ownership and Profit Sharing. The effort aims to tackle what researchers describe as a looming succession crisis among small businesses, while also expanding pathways for workers to build wealth.

The urgency stems from what’s often called the “silver tsunami.” Roughly half of small business owners are 55 or older, and many lack a clear plan for what happens when they retire. Without a buyer or successor, millions of businesses – and the jobs tied to them risk of disappearing. Small businesses employ more than 62 million people.

Rutgers researchers say as many as 1.2 million businesses could instead transition to employee ownership models, preserving those companies while shifting stakes to workers.

The initiative centers around a push to make academic research usable.

The lab will offer free, practical tools, such as case studies, data platforms and step-by-step guidance, through an online hub designed for business owners, advisors and policymakers. The Prudential Foundation and an anonymous donor back the effort.

We’ve turned rigorous research into tools that business owners can actually use.
Adria Scharf, director, Employee Ownership Applied Research Lab

“We’ve turned rigorous research into tools that business owners can actually use,” said Adria Scharf, director of the lab. “Starting today, we will engage thousands of decision-makers across business, labor, policy, philanthropy, and research to make these new resources as impactful as possible.”

Real-world applications

A key focus is expanding awareness of employee stock ownership plans and worker cooperatives.

Under an ESOP, a company sets up a trust that gradually acquires ownership on behalf of employees – typically at no upfront cost to them. The structure allows workers to build equity over time in addition to earning wages. Worker co-ops operate similarly but are usually smaller and more directly governed by employees.

Both models are associated with stronger retention and productivity, particularly when paired with supportive workplace cultures.

Rutgers’ research underscores both the scale and the opportunity the frameworks afford.

Today, about 5,800 small and mid-sized U.S. businesses operate as ESOPs. They employ 2.4 million people, with the average worker holding roughly $164,000 in ownership value. But the potential is far larger: another 137,000 firms employing 33 million people are considered strong ESOP candidates.

On the co-op side, nearly 1,000 businesses employ about 10,000 workers, while more than 1.1 million additional firms – employing 25.6 million people – could transition to that model.

The lab also addresses a practical gap that has limited adoption. In a Rutgers survey, only 5% of stakeholders said traditional academic research effectively answers real-world business questions. By translating complex studies into accessible, actionable guidance, the initiative aims to help owners evaluate whether employee ownership fits and how to execute it, while also supporting companies that have already transitioned.

Scharf said that employee ownership creates a pathway for workers to share in the wealth they help create. “Work should provide more than a paycheck,” he said. “Our goal is to help ensure that these models are designed and implemented in ways that expand opportunity across the middle and working classes.”