At the first ever International Summit on Cooperatives in Quebec in October 2012 organized by the Des Jardin Cooperative group, speakers from around the world talked about the application of the cooperative model in multiple industries.
The global cooperative movement employs over 100 million people with total revenue equal to the 10th largest economy in the world. In industries from electrical power generation and distribution, sports ownership, retail and health care services, cooperatives serve 800 million members. Many consultants expect this to be the fastest growing business model between now and 2020.
If we do not define our future, others will do it for us.
I believe many of the conference insights apply to U.S. credit unions. One of the most important was that as governments debt and spending deficits cause them to distance themselves from the financial well-being of their citizens, cooperatives have a unique opportunity.
Some of the common findings for cooperative success, especially compared to shareholder companies or government managed firms, were noted as follows:
- Co-ops create common wealth and social capital; businesses create individual wealth.
- Co-ops respond differently to shocks they are more resilient and sustainable than the for-profits, and they have countercyclical capability in crisis.
- Co-ops align with long-term value creation for the society they focus on sharing and distribution, not just accumulation.
- Co-ops introduction to markets is frequently innovative, disruptive of the status quo, and creates new growth models.
- Co-ops have a singular focus: Members interests are at the core of decision-making.
- Co-ops compete in markets and provide options beyond private capital or government solutions. Economic development options become more pluralistic.
Speakers from the economics profession viewed cooperatives as engines for transformational, not just cyclical, change. Nobel Prize winning economist Michael Spence commented:
I believe the cooperative model is now an important part of achieving individual and social goals. It is dynamic… resilient and certainly better adapted to the present and likely future conditions than many of the standard corporate leveraged models. Cooperatives can handle shocks and fluctuations better than many models… no model is completely insulated from large economic shocks… (but) being protected means having a model that adapts quickly, fairly, and effectively to changing conditions… On that score the cooperative model has proved effective.
There was concern about the stranglehold of shareholder-model concepts on cooperative thinking and assessments. Noted was the fact that general financial regulators are affected. They have difficulty understanding cooperative credit unions and mutuals because these models lack the public, ongoing market signals and coverage that help illume the performance of shareholder finance firms.
The absence of measures rooted in cooperative value was stated. Co-ops lack of traditional market share price tracking led to the observation that co-ops have quiet power, not the acclaim that successful corporate firms attract.
But also noted was the advantage of cooperatives in their prophetic role, their ability to define a new future and then change the present to accomplish it. Delegates suggested that cooperatives must create their own hopes or risk submission to the status quo, that is, existing ways of doing and distributing economic results.