2012 is International Year of Cooperatives

This year is the United Nations International Year of the Cooperative, a year dedicated to raising the profile of this business model that puts control, and profit, into the hands of its workers. At the launch of the year, United Nations’ Secretary General, Ban Ki-Moon, said:

‘Cooperatives are a reminder to the international community that it’s possible to pursue both economic viability and social responsibility.’

At a time when the world economy is slowing and business in emerging economies as well as the industrialised economies of North America and Europe are finding trading conditions tough, cooperatives present a viable business model that presents a socially responsible alternative to business driven entirely by profit.

What makes a coop different from my own small business? A co-op is a business run and owned by and for its members. This model gives its workers an equal say in how the business is run on a daily basis. It also gives them an equal share in the profits. Co-ops offer a different kind of business model, where values can play and equally important part to profits, and this recognition of wider social value is one of the reasons why cooperatives are becoming an increasingly important force in the world economy.

Co-ops are a growing part of the small business sector in the UK The UK has over 5,450 independent co-ops. Nearly 13 million people own a share in theirs and this passion for co-operative action has helped to make the cooperative model contribute significantly to the UK economy as well as offer a realistic alternative to the traditional business model. There are many different types of co-ops in the UK and together they contribute to a combined yearly turnover of £33.2 billion. These include 446 farming, 67 fishing and 541 worker co-operatives. Overall, co-ops have a sustained workforce of 236,000 jobs.
FC United of Manchester is an example of a high profile co-op. It has 3500 members who not only support the club, they own an equal share in it. BBC Wales also highlighted the trials and tribulations of another fictional co-op, the Valley Bara Bakery, in their show The Baker Boys.
England has 4,352 co-ops who turnover £27.5 billion, while Scotland has 473 who turnover £3.4 billion and Wales has 386 and Northern Ireland has 239 who together turnover in excess of £2 billion.

John Lewis and The Cooperative
Two UK businesses that may immediately spring to mind when you think of coops are The Cooperative and John Lewis, but neither of these are workers coopertatives. The Cooperative is a mutual – where members share profits, and the John Lewis is a partnership in which all employees are shareholders.

The Co-operative Group is the UK’s largest mutual business, owned not by private shareholders but by over six million consumers. It is the UK’s fifth biggest food retailer, the leading convenience store operator and a major financial services provider, operating The Co-operative Bank, Britannia and The Co-operative Insurance. Among its other businesses are the number one funeral services provider and Britain’s largest farming operation. As well as having clear financial and operational objectives, the Group has also set out its social and sustainability goals in its groundbreaking Ethical Plan, which specifies almost 50 commitments in these areas. The Group operates 4,800 retail trading outlets, employs more than 106,000 people and has an annual turnover of more than £13bn.

John Lewis is not a workers cooperative, it’s a partnership where all employees receive a share of the profits. All staff — from chairman Charlie Mayfield down to Saturday shelf-stackers – receive the same percentage payout which rises or falls in line with its financial fortunes. Last year its staff, or "partners" as John Lewis calls them, received 17% which is the equivalent of around nine weeks' pay. The retailer's employee-owned partnership model operates differently from private-equity backed businesses and stock market-listed companies as instead of profits flowing to the shareholders, at John Lewis they flow to the staff, in the form of the annual bonus.

What’s the International Year of Cooperatives for?
A mixture of self-help and mutual aid has made co-operative businesses an international force for good. Over one billion people around the world are members of cooperatives and approximately 100 million people are employed by co-operatives.
Co-ops seek to reduce poverty, generate social integration and create employment opportunities. This is why the U.N decided an International Year of Co-operatives is so important –it gives worldwide recognition to the co-operative movement and shows the international business community that other ways of doing business are not only successful but can also create wider benefits. It is hoped this International Year of Co-operatives will increase public awareness of the contribution that cooperatives bring to the socio-economic development of communities around the world. It is also hoped this year will provide the awareness and encouragement to strengthen the co-operative movement and increase the number of co-operatives.

If you are interested in the cooperative model you can find out more at the UK cooperatives website.