Co-operative Enterprise: The Invisible Giant

Diarmuid McDonnell Co-operative Education Trust Scotland

28/03/2013diarmuid@cets.coop

Outline

1. What is a co-operative?2. Are they relevant?3. Are they ethical?4. How can I get involved?5. Further resources

Introduction

Despite the wide-ranging successes of co-operatives, in financial terms as well as in the development of sustainable communities, the study of these democratic forms of enterprise remains surprisingly absent from the curricula of most university business schools around the world.

Co-operative Investor-owned

Company

Social Enterprise

Purpose Improve the quality of life for members

Create wealth for shareholders

Achieve a social purpose

Ownership Members Shareholders Usually a community, charity or individual(s)

Control Democratic basis - one member, one vote

Property right basis - one share, one vote

Trustees or equivalent group that may or may not be democratically elected

Beneficiary Members Shareholders Target social group

Financed by (excluding debt finance)

Member contributions and retained earnings

Sale of shares and retained earnings

Retained earnings and grants

Motivational driver Self-help and self-responsibility

Personal wealth creation

Altruism or public policy

Market-oriented Yes Yes Yes

Distribution of surplus

Three methods:

Members Reinvested in the

business Allocated to

social/charitable initiatives

Yes in form of dividend related to shareholding

Not to individuals, usually reinvested in the enterprise

Types of co-operative

Value-driven

Co-op ValuesSolidarityEquityEqualityDemocracySelf-helpSelf-responsibility

Ethical ValuesOpennessHonestySocial responsibilityCaring for others

BUT... Google, Tesco and Barclays have values as well...

Values in action

Co-op Principles1. Voluntary and open membership2. Democratic member control3. Member economic participation4. Autonomy and independence5. Education, training and information6. Co-operation amongst co-operatives 7. Concern for community

All* co-ops subscribe to these principles – firm ethical foundation

Benefits and downsides

But...

Not very well understood.

Some trouble accessing finance.

No single legal form.

Odd one oot!

The Invisible Giant

Co-operatives globally (1)

Source: ‘Statistical Information on the Co-operative Movement’ ICA.

http://www.ica.coop/coop/statistics.html, accessed 29 September 2011.

Co-operatives globally (2)

The UK co-operative sector (1)

Source: Co-operatives UK. The UK co-operative economy 2011: Britain’s return

to co-operation (Manchester: Co-operatives UK), 2011.

No. of co-operative businesses in the UK:

5,450

No. of members: 12.8m

Turnover of co-operatives: £32.2bn

No. of people employed by co-operatives:

236,000

The UK co-operative sector (3)

Source: Co-operatives UK. The UK co-operative economy 2012: Alternatives to austerity

(Manchester: Co-operatives UK, 2012.) p. 13.

Get involved

In higher/further education:

• Join/set up a ‘vegbag’ scheme – http://s.coop/1f35f

• Need books or other services? – http://s.coop/1f35j

• Freshsight model – http://s.coop/1f35t

In the ‘real world’:

• Bank/save with a co-op – http://s.coop/8157; http://s.coop/1f36a

• Shop with a co-op – http://s.coop/1f36b; http://s.coop/1f36h

• Create your own co-op

Conclusion

1. Co-ops are businesses

2. Achieve financial, social and economic aims

3. Ethical

4. Come in all shapes and sizes

5. Easy to get involved in

Key message

Further resources

Democratic Enterprise – an ebook and VLE aimed at students/graduates containing

information about democratic forms of enterprise

http://s.coop/1i7ns

The UK Co-operative Economy 2012 – facts and infographics from today’s lecture

http://s.coop/q0uq

Join the Co-op Future – a 4 minute film that offers a snapshot of the co-operative

sector in Scotland

http://s.coop/1i7oy