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Are Coops the Future of Commerce?

Updated: Nov 30, 2018

We know that cooperatives are a thing of the past - they have been around since the dawn of humanity - but are they also the future? Cooperatives already lift millions of people out of poverty, they empower workers to take control of their own wages and conditions, they cut out exploitation in supply chains and they offer farmers a dignified livelihood. But did you know world wide there are more than 3 million cooperatives employing 10% of the working population and the largest 300 generate 2.1 trillion USD!!

And here's the kicker - Professor Virginie Perotin of Leeds University Business School looked at research on worker cooperatives in Western Europe, the United States and Latin America, found that worker cooperatives are more productive than conventional businesses, with staff working “better and smarter” and production organised more efficiently. Other key finding were:

  • Worker co-operatives are larger than conventional businesses and not necessarily less capital intensive

  • Worker co-operatives survive at least as long as other businesses and have more stable employment

  • Worker co-operatives retain a larger share of their profits than other business models

  • Executive and non-executive pay differentials are much narrower in worker co-operatives than other firms

This all makes a pretty compelling argument in favour of a cooperative future.

So what is a cooperative?

The International Co-operative Alliance (ICA) is the global steward of the Statement on the Cooperative Identity – the Values and Principles of the cooperative movement. Put simply, cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. And the seven internationally recognised principle that underpin these values are:

  1. Voluntary and Open Membership

  2. Democratic Member Control

  3. Member Economic Participation

  4. Autonomy and Independence

  5. Education, Training, and Information

  6. Cooperation among Cooperatives

  7. Concern for Community

These principles set cooperatives apart from traditional companies in a number of ways. Notably that ownership and control of the coop is in the hands of the members/workers not shareholders, that any board structure a coop has is accountable to the members/workers not shareholders, that profit is returned to the coop and its members/workers not to shareholders, that coops are focused on returning excellent value and service to their customers not on returning profit to external shareholders and that supporting community development is built into the structure and purpose of a coop not as a philanthropic add on.

Let's face it - Coops aren't perfect either

Of course cooperatives are not without their issues. They are democratically run organisations which means they must listen to and act according to their members' wishes and not everyone will see eye-to-eye at all times. Modern governance structures are helping cooperatives navigate these difficulties efficiently. And because cooperatives are active in nearly all industries, they are also subject to the same global economic ebbs and flows that affect those industries, but because they choose a cooperative rather than a competitive approach, there is more support and shared responsibility.

So are they the future?

Cooperatives are already strong contributors to the global economy. And whilst they are relatively small in number compared to traditional businesses, cooperatives hold massive potential as an alternative to the unfair economic systems that disadvantage most people and benefit only a few. Etheq believes they are the future which is why we are a registered cooperative and we partner with coops whenever possible.

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