Transcript Document

Co-operatives in the
Economy
Capital Change Conference
September 27, 2005
What is a co-op?
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A co-operative is any enterprise which is
collectively owned and democratically
controlled by its members for their mutual
benefit.
Co-ops and the Social
Economy
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The social economy can be defined as
that sector of the economy that is based
on the economic principle of reciprocity.
This distinguishes it from the public
economy (based on the economic
principle of redistribution) and the
capitalist economy (based on the
principle of exchange of equivalents).
Social economy cont’d.
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Social economy organizations - key types
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Non-profit associations
Voluntary associations
Charitable organizations
Trade unions
Co-operatives
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What distinguishes co-operatives from
other types of organization is that
reciprocity takes the form of mutuality collective ownership and action for
mutual benefit.
Co-operatives in Canada
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100-year history of serving Canadians and their
communities
Operating in all sectors of the economy
The Co-op Sector
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There are over 12,000 co-ops in Canada,
with over 14.5 M members, and assets
worth over $157 B.
Co-operatives are key players in financial
services, housing, agriculture, childcare,
insurance, consumer & retail, and
increasingly in the resource sectors.
Co-op Brand Names
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Co-operators Insurance
Island Farms (Agropur)
Best Western
Home Hardware
Canadian Press
CPAC
CARE
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National Geographic
Vancity
Mountain Equipment
Co-op
Sunkist
Welch’s
Ocean Spray
Sun Maid
Financial Co-operatives
1,600 Credit unions & Caisses
Populaires
 Insurance and Trust Co-operatives
 Over 60,000 jobs
 Over 900 communities rely solely
on credit unions for financial services
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Producer Co-operatives
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Among oldest and most
successful of all co-ops
37,000 Employees
$20 B Revenue
25% of every farmer’s
dollar
Consumer Co-operatives
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4 million members
$7 billion in
annual sales
25,000 jobs
Worker Co-operatives
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300 Co-operatives
10,000 jobs
Operating in all
sectors of the
economy
Service Co-operatives…
Non-Profit
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Housing
Child Care
Health Care
Serving 1,000,000 Canadians
Social Co-operatives
Other Service Co-operatives
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Cable TV
Broadband
Energy
Transportation
Community
Development
Tourism
Funeral Services
The Co-op Sector In BC
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There currently over 700 co-operatives in
British Columbia
Co-ops in BC employ 13,000 people and
control over $10 B in assets
1 in every 3 British Columbians is a
member of a credit union
1 in every 5 British Columbians is a
member of a co-op
Key Sectors
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Credit Unions
 47 credit unions with 326 branches
Housing
 There are 260 non-profit housing co-ops in BC, with
14,500 units providing housing to 35,000 people.
Agriculture
 75 agricultural co-ops
 New growth in organics, specialty foods
Consumer
 42 consumer co-ops
Key Sectors, cont’d.
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Community Development
 21 community development co-ops
Resource Management
 Forestry, fishery
 Value -added (wood products, edible forest products)
Artisan/Culture/Crafts Co-ops
 More than 20 artisan/crafts co-ops
Energy (wind)
Media & Information Technology (broadband)
Social Service
 Health care, Home care, services to disabled
What is the difference between a Co-op
and a capital owned firm?
A CO-OPERATIVE IS ESSENTIALLY
A CAPTIAL OWNED FIRM IS
ESSENTIALLY
A union of people
A union of capital
An organization of users
An organization of investors
Controlled by its members on the
principle of one member one vote
Controlled by those who own a
majority of shares (one dollar one vote)
Surplus (or profit) belongs to members
and is either reinvested in the co-op or
returned to members as dividends
Profit belongs to the corporation and is
primarily used to provide a return to
investors
Survival Rate of Co-ops
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Co-ops have a higher survival rate than other forms of
enterprise
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Over 5 years, co-ops have a 64% survival rate; only 36% of
private firms survive
Over 10 years, co-ops have a 46% survival rate; only 20% of
private firms survive
Co-op Survival rate by sector
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Consumer co-ops
Producer co-ops
Worker co-ops
(5 yr: 82%, 10 yr: 66%)
(5 yr: 77%, 10 yr: 58%)
(5 yr: 44%, 10 yr: 26%)
CED & Co-operatives
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Key Principles: Similarities
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Commitment to generation of economic benefits for the
whole community, not just a minority
Broad distribution of economic power
Responsive to market failures
Commitment to networking and co-operation among a
variety of economic and social agents
Often linked to efforts to empower economically and
socially marginalized individuals and groups
Commitment to including social goals alongside economic
goals.
Differences between CED and Co-ops
CO-OPERATIVES
COMMUNITY ECONOMIC
DEVELOPMENT
Structured on principle of direct
ownership & control of enterprise
by members.
Structured on a variety of models,
including CDCs, volunteer boards,
coalitions, etc.
More focused on enterprise success
as a primary goal as opposed to
community development.
Often focused on social objectives
(ie community development) as a
primary goal.
Stronger links and reliance on
market forces.
Strong reliance on government or
foundation funding.
Co-operatives linked to broader
sectoral and co-op networks &
federations.
CED organizations usually linked to
development networks across a
broad spectrum of interests.
What is the difference between a Co-op
and a Non-profit enterprise?
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Co-ops can be either for profit or not for profit
organizations.
Whereas non-profits are defined by a limit on the
distribution of profit, co-ops are defined by the control
rights of members.
Distinction between stewardship (non profits) and
ownership (co-ops).
Non profit co-ops may also qualify as charitable
organizations.
Typical Co-op Structure
Co-op Members
Board of Directors
Elected by members
Management
Staff
Committees
- Executive
- Finance
- Education
etc.
Investors
Why the Co-operative Model?
Advantages for Members
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Address a common need that individuals
cannot meet alone
All members own and control the enterprise
Members benefit in proportion to their use
of the co-operative
Why the Co-operative Model?
The Advantage for Communities
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Provide local goods and services, jobs and
economic opportunities
Retain wealth and control in the community
Build local leadership and business skills
Generate high levels of social capital for
local communities (e.g volunteerism)
The Co-op Advantage
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Because of their democratically controlled structure, co-ops
are less vulnerable to outside interests and more responsive
to the needs of members & the local community.
Co-ops share risk among a broader range of individuals and
are better able to harness the skills and resources of more
people.
Co-ops rely upon, and generate, social capital, which is the
foundation of community capacity.
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In short, the building of co-operatives is
one of the best forms of schooling in
economic literacy and social organization
at the local, community level.
When are co-ops appropriate?
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When the asset specificity of an enterprise is
labour as opposed to capital;
When the focus of the enterprise is relational
goods (especially in social enterprises);
When there is a founding nucleus of individuals who
understand and are committed to co-operation;
When members are prepared to invest in the co-op;
When there is a good business plan and a clear
concept of the enterprise and the market for the
good or service.
When Co-ops Fail
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Lack of clear benefits to members
Lack of sufficient commitment & involvement of
members (investment, time)
Lack of sufficient training of directors and members
Inexperienced management
Lack of democratic decision making and
accountability
Lack of member solidarity and co-operative values
Lack of sufficient capital to sustain growth
Thank You
For more information, visit:
www.bcca.coop
www.coopscanada.coop