Cooperative: Successful yet boring?

The new “World Cooperative Monitor 2018” has been published and shows the ranking of the 300 largest cooperatives in the world. The International Cooperative Alliance (ICA) and the European Research Institute on Cooperative and Social Enterprises (Euricse) have published the seventh annual World Cooperative Monitor. That is 2,575 companies from 8 sectors of activity, of which 1,157 generated sales of more than USD 100 million. The top 300 cooperatives and insurers report a total turnover of over two billion USD. US dollars. The response to the study in the media? Almost zero. Unless one is involved in a scandal, cooperatives are the unloved stepchildren of the media and are ignored.

Wrongly so. Because cooperatives are a success story. This is also shown in the latest edition of the study. The world’s 300 leading cooperatives and insurers are active in various sectors: Insurance (32%), agriculture (35%), wholesale and retail (19%), banking and financial services (8%), industry and utilities (2%), health, education and social care (2%) and other services (2%).

Successful cooperatives
In the ranking, Groupe Crédit Agricole and Groupe BPCE, both from France, ranked first and second respectively, while the German BVR (Bundesverband der Deutschen Volksbanken und Raiffeisenbanken) ranked third. And IFFCO (Indian Farmers Fertiliser Cooperative) from India occupies the top position among the top 300, measured by the ratio of turnover to gross domestic product (GDP) per capita.
Cooperatives spread two important messages: One is about satisfying needs, which means less about awakening needs. And the other is the impressive number of members. Almost one tenth of the world’s population is already working in cooperatives or are members of cooperatives. In Europe there are said to be 140 million members in 300,000 cooperatives and 2.3 million jobs. Cooperatives are “chic” again. Particularly noticeable since 2004, when the EU Commission began to promote this business model. Many successful cooperatives today operate in highly competitive sectors. And although they do not seek the highest possible return on their capital, they have achieved significant market shares in sectors where corporations are very strong.
The EU encourages cooperatives because “they contribute to the achievement of Community policy objectives in areas such as employment policy, social inclusion, regional and rural development and agriculture”. Cooperatives have long since lost their old-fashioned charm. More and more citizens found cooperatives and continue the idea of their great-grandfathers to help themselves.

From the Middle Ages to the Modern Age
The idea of cooperatives originally came from the countryside: as alpine cooperatives or as road and water cooperatives, they have been part of Switzerland’s cultural heritage since the Middle Ages. A more recent successful establishment of this type of company is the Mobility car-sharing cooperative.
Only the ten largest cooperatives in Switzerland account for 11 percent of our country’s total economic output. Together, they generate more than CHF 60 billion in annual turnover. The third largest bank in the country is also a cooperative: the Raiffeisen Group with its 1.7 million members.

Profit is not the maxim
In the case of the cooperative, “member value instead of shareholder value” applies. The guiding principle here is not maximum profits for investors and managers or the stock market price, but “sustainable performance towards the cooperative members”. There are more than 9000 cooperatives in Switzerland. Of these, 28 percent are housing cooperatives. The largest and best-known Swiss cooperatives are the major distributors Migros and Coop. They have formed a very successful duopoly in the retail trade for decades.

And with healthbank another cooperative is successfully on its way. healthbank is the world’s first citizen-owned, neutral and independent health data transaction platform that enables people to share their data with other partners in a secure and data protection-compliant way. healthbank connects data sources of all kinds from the entire health sector and rewards participants for sharing their health data for research purposes. healthbank promotes innovations in the health sector, from prevention to cure, at a more appropriate price and better quality – for the benefit of the individual and society.

Author: Roger Huber

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