The ‘flight to trust’

Co-operatives on the march

A version of this article first appeared in the Coffs Coast Advocate on Saturday 27th October

2012 has been the International Year of Co-operatives, the first time that the United Nations has designated a year especially for this sector. According to Dame Pauline Green, President of the Internationa Co-operative Alliance, this decision was made in recognition of the ‘relevance of co-operatives as a sustainable and recession-resistant [business] model in times of continued international economic turbulence.’

So 2012 has been the year for ‘co-operatives to shine’, and that was the theme of the inaugural National Conference of Australian co-operatives, which took place this week in Port Macquarie’s Glasshouse centre. Over 300 delegates, representing co-operatives of all shapes and sizes from around Australia, some over 100 years old, some newly forming, participates in two days of talks and business clinics, celebrating the successes of co-operatives and the challenges ahead. I was lucky enough to be among them.

The co-operative story is indeed an impressive one. As it’s usually told, the story dates from 1844, when the famous ‘Rochdale pioneers’ agreed to work together, on a set of core principles and for their own mutual benefit, with the goal of providing unadulterated and fairly-priced food to their communities.

The co-operative revolution
The co-operative revolution

However, as Dr Chris Cooper, of the Co-operative College in the UK told us (quoting historian AM Carr-Saunders), ‘the co-operative ideal is as old as human society’. It is, rather, ‘the idea of conflict and competition as a principle of economic progress that is new’, with the foundational co-operative principles being ‘forgotten in the turmoil and disintegration of rapid economic change’.

Those words were written in 1938, but they are hardly less relevant today. In his closing address Professor Bob Morgan, Executive Director of Tranby Aboriginal College, observed that ‘we live in a society where common good and decency has been replaced by common greed and indecency.’ Professor Morgan reminded us that many of the core co-operative principles and values – self-help, self responsibility, equity, respect, concern for community, education and training, autonomy and independence, solidarity (co-operation among co-operatives)  – had been practiced by Aboriginal nations for tens of thousands of years, prior to the European colonisation of Australia.

The last forty years have not been easy for the co-operative sector, but there was a palpable sense at the conference that we may be on the cusp of a revival and renewal of co-ops in Australia. If the experience in the UK over the last few years is anything to go by, we can expect dramatic results.

Dr Cooper documented what he termed a ‘flight to trust’ that had taken place in the wake of two key events: the GFC (which started in the UK in 2006-7), and a sophisticated re-branding and re-launching of the Co-operative group of affiliated businesses (banking, retail, housing, manufacturing, travel, legal services, agriculture, funerals, schools and child care centres) in 2005. This re-launch followed an extended period of reflection in which the movement achieved real internal clarity about its own identity and its core message.

The Co-operative group alone now has 6 million members and 6000 retail outlets across the UK. The sector as a whole has 10.5 million members, a phenomenal increase on the 3.5 million members it had in 2007 ; and has set itself the ambitious target of reaching 20 million members by 2020. Its turnover rose by 20% in 2011 alone. In a stunning reversal of fortunes, and of the pattern in Australia in recent decades, the movement is growing via the acquisition of non-co-operative, or de-mutualised, businesses.

For example, the Co-operative Bank, which had 109 branches in 2009, now has nearly 1100. Two-thirds of the new branches are formerly de-mutualised branches that belonged to Lloyd’s Bank. In the 10 months since January this year, the Co-op Bank has 61% more personal accounts, and 21% more business accounts.

In a very important lesson for Australian co-operatives, Dr Cooper said that what has driven this extraordinary business success is the return to core values and principles, and their effective communication amongst members and the wider public. The co-op movement in the UK is aiming at nothing less than ‘transforming the economic system’, because ‘it’s a very old idea whose time has come once more.’

Next time I’ll look at some new research mapping the sector in Australia, the challenges it faces, and the opportunities before it.