Marking the "UN International Year of Co-operatives" in London
The UN has designated 2012 as "International Year of Co-ops". Across the world the co-operative movement is a multi-million pound sector providing a range of services which cover every aspect of life - from beginning to end.
As a media partner 'The Guardian' organised a conference with Co-ops UK to mark the official UK launch of the "UN - International Year of Co-ops". At the event in the Guardian's offices in Kings Place, London, Dame Pauline Green, Chair of the UN Advisory Group for the International Year joined a panel of well known players within the Co-op movement. She stated that Co-operatives are certainly not 'business as usual' pointing out that Co-ops represent a dynamic global movement of 'people centred businesses' with a social agenda.
The global numbers that were mentioned by the various panel of speakers are mind-boggling. There are one billion member owners of co-operatives across the world and hundreds of thousands of co-operatives globally employing 100 million people. The largest 300 co-operatives, alone, are worth 1.6 trillion US dollars, equivalent to the GDP of Spain (the world's 9th largest economy). Pauline Green also pointed out that as well as number crunching figures Co-operatives "can be a powerful catalyst for change and play a critical role ushering in a new era of socially responsible business practice."
In the UK the "Co-op shop" grocery store is probably the first introduction most people have to the co-operative sector - and their last could be with co-op funerals. However people may not be aware that much of the products and goods in those stores are also provided by co-op businesses - from local home grown farms to distant factories and 'Fair Trade' suppliers from across the planet.
Co-operatives are located within the "Third Sector" and the first and third worlds. Although no bad thing, this category leads a general perception that Co-ops are neither hi powered "serious" nor "real" businesses. Alignment with charities or voluntary groups is a misconception and given the impressive figures stated above it is clear that Co-ops are "business serious". Co-ops are neither charities, nor social enterprises - however, they are enterprising in their approach of doing business and the Co-op Group "charitably" sponsors and finances numerous social projects which build co-operation at local, national and international levels. There is also a difference between Social enterprises, which are regular businesses trading with a social conscience, and Co-ops, which are structured to give every member who 'works' in the co-op equal ownership of the actual business. This means equal status, equal obligations and responsibilities. A difficult concept to understand in the "heirarchical capitalist" model which unfortunately has become 'normal' business practice.
Even for most ordinary working people in the west the notion of "owning" their own business is alien and although the numbers of people participating in Co-operative businesses are impressive the majority of businesses are not co-operatives and most people have no position in the ownership of the company they work for. Conversely, the majority of workers have more than there fair share of unemployment when 'normal' businesses collapse. This doesn't mean that Co-ops are not vulnerable to collapse - they do, but the difference between co-ops and other companies is that the employee members shared sense of collective responsibility helps sustain the business and prevents the worker being the only casualty if the business fails.
In an inner city borough, such as Tower Hamlets, a perpetual situation has been one of high "unemployment". The nature of the industries which have passed through the borough has constantly changed. More recent shifts in employment from "light" manufacturing, shipping and the docks have been overlaid with banking and corporate service industries which tend to exclude large sections of local residents for a number of reasons. Additionally, cheap imported goods arrive by container loads on a daily basis further reducing the need to manufacture locally. To bring solutions to local social and economic problems, Lutfur Rahman, the Mayor of Tower Hamlets, is leading the initiative to work closely with the Fair Trade and Co-operative sector. Yet, given these economic shifts, there are currently around 40 co-operatives in the borough of Tower Hamlets working across different sectors: banking, retail, leisure, management, health, and industries: care, print, housing, culture, transport, building, food. A number of them are million pound turnover businesses - but most are small or micro businesses - often made up of a handful of people offering specialised services. Other London boroughs such as Lambeth and Greenwich are working hard to promote working with Co-operatives.
Surviving as a business, whatever the size, is never easy, and in the current economic downturn it is especially difficult. When large companies fail, and unemployment is high the knock on effect is especially hard on small local companies. It is impossible for small ethical co-ops to compete with the supermarkets and heavily financed private companies, who have no qualms achieving profit by any means: cutting back the lower levels, reducing pay or squeezing suppliers. It is especially hard for small businesses to survive if local people are also feeling economically vulnerable. However co-ops as businesses do manage to keep going longer than most. This is because their members are engaged with their work and feel responsible for each others well being. Co-ops do engender a sense of collective responsibility and community - echoing the very reasons as to why co-ops formally came into being in 1844.
Additional Facts about Co-ops
According to the International Cooperative Alliance 2007 Annual Report - worldwide, cooperatives have a turnover of nearly £500bn, around one fiftieth of world GDP, and the United Nations estimated in 1994 that the livelihood of nearly 3 billion people, or half of the world's population, was made secure by co‐operative enterprise.
Every OECD country has an important and very successful cooperative based component of their economy ranging from 0.5% (Australia) to 16.1% (Finland) of total GDP.
With a turnover of over £8bn in 2007, the UK’s "Cooperative Group" is the world’s largest consumer owned business, the world’s eighth largest cooperative, Europe’s largest funeral services provider, the UK’s largest farmer, the UK’s third largest travel services provider and pharmacy and the UK’s most consumer liked banking and insurance provider. In fact, the Co‐op is Britain’s most trusted brand by quite some margin, and any excess profits are returned to members as dividends. Due to being "managed extremely conservatively", most large consumer owned cooperatives never make a loss nor has any evidence been found that the Cooperative Group ever has made a loss, in its almost 150 years of operation.