The cooperative resurgence
13 August 2019 at 8:33 am
Cooperatives are an innovative, resilient and social-minded business model, but few Australians are aware, writes Sidsel Grimstad from the University of Newcastle.
Globally there is a surge of interest in cooperatives both from customer and business perspectives. In Australia, as evidenced by the latest royal commissions into banking and aged care, listed companies are coming under scrutiny. Where there is competition between shareholder and client interests, company execs are stuck with a juggling act that too often places customers second in priority.
Cooperatives are member-owned businesses, as opposed to investor-owned and this fundamental difference has considerable implications for how they run and operate. Implicit in an investor-owned model is that investors want maximum return on their capital investment, while a cooperative business needs to focus first and foremost on the economic, social and environmental benefits to members. Due to their for-purpose business ethos, cooperatives have proven to be remarkably resilient for centuries because they support collaboration, and are agile and flexible organisations that can wax and wane according to economic circumstances and member-based solutions.
There is a worldwide surge in interest, education and research in the cooperative model, as these businesses are leading the way in the promotion of sustainable and equitable business practices, provision of services and building communities. The sharing economy has mainly been associated with extractive digital platforms like Uber and Airbnb backed by large corporations. But digital platforms also create great potential for those who are interested in innovative modes of business through cooperation, sharing and pooling resources that can provide employment and build communities.
As the public purse tightens, the cooperative model is now also seen as filling the gap in providing communities with health services, child care, aged care and affordable housing. A positive example is the National Health Co-operative that successfully provides remote communities with GP medical centres. Australian cooperatives like SILC and The Co-operative Life are providing aged care services with innovative and mutually beneficial solutions for clients and employees and are growing in popularity. Further, co-ops may also provide a solution to the growing issue around affordable housing, such as in Sweden where 20 per cent of the houses on the market are provided by housing co-ops.
Even with these positive attributes, few Australians are aware of the cooperative model – despite the fact that nearly eight in every 10 Australians belong to a cooperative or mutual. There is a huge need for education, training and awareness about the advantages of the cooperative business model that puts people before profit.
Millennials are focusing on environmental and social issues, with more applying for jobs with social and environmental purposes rather than just boosting their pocketbooks. As word gets out about The University of Newcastle’s Business School’s postgraduate program on cooperatives, more students are enrolling.
Since its launch in 2016, the Graduate Certificate in Co-operative Management and Organisation has received students from all over Australia. The program is the only one of its kind in Australia and provides students with a deep understanding on how cooperatives differ from the investor/shareholder business models and why this business model might be more sustainable.
For more information about the program or enrolments, contact program convener Sidsel Grimstad on Sidsel.Grimstad@newcastle.edu.au.