The Quiet Global Boom of Co-operative Enterprises

In the context of changing the system dynamics that created the problem in the first place, a social innovation is any initiative (product, process, program, project or platform) that challenges and, over time, contributes to changing the defining routines, resource and authority flows or beliefs of the broader social system in which it is introduced. Successful social innovations reduce vulnerability and enhance resilience. They have durability, scale and transformative impact. - Frances Westley

Mary Cybulski, AP

The Wolf of Wall Street Credit: Mary Cybulski, AP

Unfettered capitalism fails us miserably — both the people on Earth, as well as Earth itself.

Six years ago, the global economy was on the verge of collapse; it was the largest market failure since the Great Depression in 1930s. Many countries have not recovered, including Canada.

At the same time, climate change is intensifying as a result of the same lack of regulation and accountability. In 2009, Nicholas Stern, former World Bank Chief Economist, wrote: “Climate change is the greatest market failure the world has seen.”1

Two massive market failures emerging from the current system; one financial, one ecological. Yet most people see no alternative system.

There is one: co-operating.

Since 2008, when global financial markets crashed, co-operative enterprises have quietly become the fastest-growing socio-economic model in the world, increasing from approximately 800 million members worldwide to over one billion — 20% growth in five years. 

One reason for co-operatives popularity is that their inherent focus is on serving the collective wellbeing of members, rather than solely the bottom-line. Originally championed by social reformers such as Robert Owen, a Welsh businessman, the first co-ops provided a humane and practical response to the social deprivations and disparity in the wake of the industrial revolution. In 1844, a group of weavers in Rochdale, England, inspired by Owen, started a food co-op. As word of their success spread, co-operatives based on the Rochdale principles were founded all over the world.

Today, there are thousands of examples of local co-operative initiatives, from credit unions in India and fair-trade coffee growers in Nicaragua to industrial worker co-ops in Argentina, renewable energy co-ops in Denmark, and local organic food co-ops in Canada.

Here’s an astonishing fact: Co-operatives provide over 100 million jobs worldwide, which is at least 20% more than all jobs provided by all multinational corporations put together. In Canada, about 40% of all Canadians are members in approximately 9,500 co-operatives and credit unions. Quebec, Canada’s most co-operative-friendly province, accounts for almost 40% of all co-operatives in Canada, and nearly 50% of co-op jobs. (See: Status of Cooperatives in Canada, 2012 Report, p.15)

The largest co-operative enterprise in Canada, by membership, is Mountain Equipment Co-op (MEC). It was started in 1971 by six mountaineers who pooled their purchasing power to buy discounted climbing equipment. Today, there are over 3.5 million members.

Just like MEC, most co-ops start out with a handful of people with a shared need, who form an enterprise to meet that need. A recent example is Ontario’s local organic food co-ops, that have grown from five or six a decade ago to over 70 today.

What else makes co-ops so attractive?

Image by Anda

Image by Anda:

Social innovation is a big part of the answer. Co-operatives are constituted on social principles and values: they are leaders, for example, in sustainability practices and reporting. They are catalyzing a system shift in the economy away from a single-bottom line and toward community accountability. Resilience is the other great inducement to forming a co-operative business. Co-operatives have twice the success rate of regular businesses.

The contrast between a co-operative enterprise and the corporate status quo is clear. Long term over short term. Mutual benefit over self-interest. Democracy over top-down hierarchies. Given the last decade of economic turmoil,  it is not surprising that eight out of ten Canadians would prefer shopping at a co-operative, over a privately owned company.2

This century will test the Earth beyond many of its limits. Population growth. Climate chaos. Resource depletion. And further destructive social disparity. The current system is not the answer. The answer is collaborative social innovation and systemic shift towards community. We have a choice: co-operate or not. Will the 21st century be the age of cooperation and collaboration? For our collective wellbeing, it must be.

1 Nicholas Stern, Stern Review: The Economics of Climate Change, October 2006, Executive Summary, page viii

2 IPOs Tracking Study for CCA, August 21, 2013; Abacus Data IYC Canadian Awareness Study for CCA, May 23, 2012.

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