We want to transform the economy to serve people and planet, and I believe, that the cooperatives play a part in this.
Therefore, I wanted to spend our second Impact Meetup discussing today’s cooperativism. What is emerging and what would be the success factors?
The evening started with a nice serendipitious encounter: teachers and students from the Spanish Mondragon University were visiting the Helsinki Think Company (the lovely venue for our Impact Meetups). We didn’t want to miss a chance to let them tell about Mondragon Corporation. We learned that it’s the world’s largest cooperative and among the biggest companies in Spain. Mondragon started as a school to educate the people, as the lack of education was the burning issue at the time. It was the first required step out of the poverty. Then people could start cooperative enterprises and be skilled to work at them.
That was a perfect example of the origins of cooperativism: people coming together, pooling their money and helping themselves through cooperative economic activity.
Since then, many traditional cooperatives have grown into big and profitable businesses. One can ask if there’s really much left of the original cooperative values. At least in here in Finland, the few cooperatives have conquered big market shares. Has the pursue for profit and growth become the main focus?
However, we see the new cooperativism emerging. New cooperatives are again established to solve societal problems. People are seeking to help themselves by economic cooperation. And most innovative of them take benefit of the digitalization: they develop platforms and apps for superb customer experience and scaling, while the ownership remains in the hands of democratiacally controlled cooperative. Like Uber owned by the drivers: not as a cheap labour, but owners who control the company and share the surplus.
The issue with the cooperatives, however, is that it is not obvious how they should raise the capital for the investment and growth. The primary source of capital are the members: becoming a member in the cooperative, a person is required to invest in it by purchasing one or more shares. This might not always be sufficient for financing the cooperative businesses, thus cooperatives do raise external capital. The key question with the external capital is that how to make the investment attractive, while preserving the democratic member control.
Now, who in Finland is developing financial instruments for cooperatives? Where is a crowdfunding platform as a marketplace for cooperative shares or bonds? How could impact investing be applied in cooperative context?
How about accelerators or incubators for the cooperatives? Mentorship programs for starting up cooperative businesses? Or just a network for peer-to-peer support? We discussed, that most of the startup buzz do not really help cooperative businesses. Cooperatives don’t really fit in, so we need something that is targeted especially for the cooperatives.
In the spririt of cooperative pioneers, I’m willing to take the initiative to our own hands and do something about it. Anyone with me?
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More about finances: Survey of Cooperative Capital
The story of women’s cooperative and coopify app.