Developments in the Cooperatives Movement
Tuesday, 16th October 2018 at 8:49 am
After recently attending the annual Platform Cooperativism conference in Hong Kong, Geddup director Rohan Clarke discusses developments in the cooperatives space and offers his key takeaways from the event.
Cooperatives tend to mirror their cultural context. Their democratic nature allows them to escape the homogenising demands of capital and to focus on the different ways value can be delivered to their members and communities.
So it was not so surprising that the annual Platform Cooperativism conference in Hong Kong was notable for the many faceted ways that platform cooperatives are developing across the globe. They may have a common gene pool but the way it is expressed is very much a reflection of the community that they serve.
Defining the space
Trebor Schultz from the New School, as the primal protagonist of the platform cooperativism movement spoke to the very tangible ways that work is being done to build momentum. This includes projects around the Platform Co-op Development Kit that are at the vanguard of change to create open-source software by industry sector and by common function. It’s a very utilitarian definition of platform cooperatives.
In line with these developments, Danny Spitzberg from CoLab, suggested that perhaps it makes more sense to talk about “co-operative platforms” – that they are not a new type of cooperative but a specific way to organise a technology platform. They represent the opportunity for the value of a platform’s network, whatever its size, to be retained by its users rather than passed over to profit-motivated shareholders. This makes intuitive sense, as unicorns can only exist if they are able to capture the lion’s share of the network value they catalyse.
The nature of the network was also pivotal to Michel Bauwen’s P2P Foundation, thinking around the trends he sees emerging in the cooperative sector. In a wide-ranging talk, he mapped cooperatives against two axes – with distribution of value contrasted against their reach:
This approach takes a narrow definition to “platform” – limiting platform cooperatives to the “for-profit and centralized” quadrant – which then enables Michel to distinguish between other network enabling technologies:
- Platform co-ops – are primarily digital marketplaces;
- Ledger co-ops – are technologies that enable distributed capitalism;
- Protocol co-ops – are open design repositories for common infrastructure development; and
- Cosmo-local coops – are urban commons projects that can use shared technology.
For the purposes of simplicity, we’ll adopt a definition that cooperative platforms include all those cooperatively owned technologies that enable communities to create online networks.
One of the benefits of being a global conference, is it could draw on the latest thinking and developments from a wide variety of industry participants. And as cooperatives are pretty good at sharing, it offers a way for the sector to foster development across borders.
But while platform technologies are generally portable by nature, the way they can be shared will depend on the economics and structure of the networks that they enable. So there were examples at the conference of open-source codebases, hosted software-as-a-service options; peer-to-peer licensing for sharing of code between members; and, proprietary closed software platforms that were owned by cooperatives.
Similarly, the reach of the communities that use a technology can define how platforms can achieve scale and therefore the way they might be shared – from platforms that are defined by an industry or function and that can be adapted to meet local needs, to place-based cooperatives that seek to take advantage of common infrastructure platforms.
We can see these factors being played out in the different cooperatives that were presented at the conference.
This approach is exemplified by the work that the New School is doing with SEWA to create a platform to assist beauty workers in India. Similarly, CoopCycle has created open-source software that enables worker coops to create their own local bike sharing schemes. By solving for a specific problem and making the solution open-source, it is hoped that these platforms can be picked up and developed to meet similar needs in other parts of the world.
Open source software has it limitations, particularly as it still requires that each instance is customised and maintained to meet local needs. For this reason, another way of targeting scale efficiencies is by creating hosted solutions that offer more plug’n’play type functionality. For example, Sharetribe – which enables communities to create their own labour or product hire markets – is a co-operatively owned platform that offers hosted, customizable services.
Special purpose platforms
And then there are the platforms that offer services that meet the specific needs of communities of interest. Their technology platforms tend to be highly customised to the circumstances and target scale at the nation-state level. For example, a worker cooperative like SMart offers very sophisticated back-end support for skilled freelancers. It needs to be specifically customised to the regulatory framework of the region it operates in. Similarly, NeedsMap – which connects donors with communities in need – maximises its effectiveness when it can match needs on a country-wide scale.
Finally, there are the platforms that are developing capabilities that can support cooperatives regardless of their purpose or structure. These are platforms that are aiming to create common infrastructure. So for example, Coop Exchange is aiming to make it easier for cooperatives to raise funding. Similarly, Geddup is being developed to support distributed organising and governance in cooperatives. Interestingly, Geddup takes a blended approach to sharing the technology as it is being created as an enterprise co-op where its members are large organisations that require their own instances, and it also makes a hosted “community” version available to smaller organisations.
One of the underlying themes of the conference was the question of how value is shared between founders and investors of a platform on the one hand, and its users on the other. It’s a foundational issue. Notwithstanding their democratic approach to the distribution of value, platform cooperatives still need to find ways of attracting the resources required to foster development.
To resolve this challenge, some platforms have sought to align interests by promising to share surplus with founders and investors subject to pre-defined constraints. For example, Fairmondo’s model is to allocate slices of equity to founders and investors, but to also place limits around individual shareholdings, salaries and dividends paid. Notably, Coop Exchange is seeking to free up investment in the sector by promoting a standardised methodology for sharing value based on the Fair Shares model that rewards investors, founders and users.
These concerns are not just limited to multi-stakeholder co-operatives. The sharing of value between members based on patronage or other metrics can give rise to wide dispersion of returns. The debate around these issues suggests that this remains a key focus for platform cooperatives to address both at their founding and as they grow.
The conference showcased some cracking examples of how data sharing and analytics can change communities:
- PetaJakarta showed how using open source software (Cognicity), they had been able to change the way Indonesia could respond to flood events;
- The Alliance of Foodbanks from Taiwan illustrated how data had radically improved their efficiency in collecting and distributing food across their networks;
- Shanzhai City is developing tools to measure impact of social investing that can be embedded in the funding structures themselves via smart contracts; and
- Datavest illustrates a data cooperative approach to helping members realize the value of their data.
Notwithstanding these examples, there remains an underlying concern about how data is managed by cooperatives and the potential role of emerging technologies in augmenting this. In particular, there was some deep suspicion around blockchain approaches to solving problems.
My view is that cooperatives, with their focus on individual agency within a collective structure, are ideally placed to help with the transition to a data-driven economy. The big technology companies are already well advanced in developing algorithmic ways of interacting with the disempowered consumer. Cooperatives that can understand and develop event-driven solutions, while still enabling members to retain control over their data, offer a very healthy alternative approach.
The conference was a brilliant hotpot of fresh ideas. In our own corner of the world, it’s already lead to the introduction of a few of these international efforts into the Australian market. We look forward to seeing where the movement takes us next year.
About the author: Rohan Clarke is a director at community action platform Geddup. This piece was originally featured on Clarke’s blog.