Worldchanging Canada Guest post by Peter ter Weeme. Until recently, Peter ter Weeme served as the Vice-President, Communications and Marketing at Mountain Equipment Co-op, Canada's largest consumer co-operative and a leader in social and environmental responsibility. As an active member of the executive team, he was responsible for MEC's communications, marketing, market research, and French adaptation and translation strategies. Peter was a recipient of Business in Vancouver's “40 under 40” award, and is currently one of the Principals at Junxion Strategy, an environmental consultancy. This is the first in a multi-part invited series from Peter on co-ops and the co-op model.
Living in a world dominated by fast food chains, fashion labels and digital communications, it’s easy to get overwhelmed by the globalization juggernaut. Fortunately, lots of people are taking steps to ensure that we are not completely engulfed by the trend. Indeed, slow food chapters, 100-mile diets, and organizations like BALLE (Business Alliance for Local Living Economies) are part of a growing movement to maintain community and build social capital.
But then, none of these principles is really new to co-operatives.
In fact, co-ops are a powerful means to bring community control over local economies. They also align well with efforts to create progressive economic and social reform. After all, a co-op is not driven by profit; instead, it exists to bring fairness, equity, and justice to the marketplace.
I knew little about all of this before I accepted a job with Canada’s largest consumer co-op. However, I quickly came to appreciate just how positive the co-op model can be.
What makes a co-op, a co-op? Basically, it has to be jointly owned and democratically controlled by its members for their mutual benefit.
Co-ops take many different forms. They are businesses offering their members products or services (stores, credit unions and car-sharing co-ops are good examples of this). Co-ops are also social enterprises providing such necessities as housing or employment (think of worker co-ops). Finally, they offer public services—like health care or childcare—to their members.
What makes co-ops unique is that members have a say in decision-making. Being a shareholder in a public company gives you a voice and certain rights. The most important difference with a co-op is that each member has an equal vote—no matter how much they've invested in the co-op. This makes co-ops more accountable.
But co-ops do more. They help people from all walks of life obtain goods and services that they may not otherwise have access to. By pooling their purchasing power, members can obtain products and services more affordably. Farmers recognized this benefit long ago.
Co-ops also help build stronger communities. Most co-ops are community and regionally based. Investment in, and surplus revenue from, the co-op stay within the local community. Community-based ownership makes co-ops less vulnerable to takeovers and closures by outside decision makers. And co-operatives enable communities to have a degree of autonomy from outside forces… like those fueling globalization.
But can co-ops remain relevant in the global economy? The year before last, I traveled to Emilia-Romagna (E-R), the region around Bologna, Italy, to find out. With an economy where almost one-third of economic activity is in the co-op sector, it is the most significant co-operative region in Europe.
Before the trip, I didn’t know that E-R is one of the most advanced economies in Europe. The per capita GDP is 134 against an EU baseline of 100. Not surprisingly, unemployment is half the national average.
I also had no idea that E-R is so enterprising. With a population of 4,000,000, it’s home to 400,000 firms, 63% of them in services. And they trade heavily: 50% of the regional GDP is exported. In an era where everything seems to be made in China, they’ve even seen 30% year-over-year increases in machinery sales to the Middle Kingdom. Clearly, their public policies—centred on co-operative development, research, innovation, technology transfer, and international marketing—are paying off.
However, not only do the co-ops in Emilia-Romagna do well on an economic level; they are on the forefront of progressive business practices. For example, many of the co-ops in E-R prepare “triple bottom line” reports. They’ve even created a regional social responsibility and accountability brand to provide credibility and standards around reporting.
As we all wrestle with balancing the forces of globalization with our desire to be rooted in our communities, co-ops have an important role to play. They lead to less income inequality, generally have happier employees and stakeholders, and are intrinsically socially responsible.
This does not mean that our market economy should consist only of co-ops. But a mix of business models, with a significant role for co-ops, would lead to more favourable outcomes for society, and provide employees and customers more choice.
Stay tuned for future postings that explore these themes further.