Derek Walker argues that a major conference in Cardiff this weekend is an opportunity to promote an effective way of doing business
Co-operators from across Britain will arrive in Cardiff this weekend for Congress – the UK’s largest annual gathering of the co-operative sector – which will focussing on business. With plenary titles such as ‘High Performance Co-operatives’ and ‘Co-operation in the new business environment’, the economic benefits of the model are firmly on the agenda.
Co-operatives are deep rooted in Wales. Recent research commissioned by the Wales Co-operative Centre in conjunction with Co-operatives UK reveals that nearly one in four of us is a member. Co-operatives support regeneration, create jobs and generate wealth. Co-operatives contribute around £1.5 billion annually to the Welsh economy through a mixture of businesses, from large-scale retail outlets, agricultural co-operatives and housing suppliers, to financial institutions. Firms like Dulas, Dynamix and Primepac work in very different sectors in Wales but are very successful.
At this weekend’s conference Professor Andrew Davies, Chair of the Welsh Co-operatives and Mutuals Commission, will be looking at how Government action can help grow the co-operative economy. Sarah Deas, Chief Executive of Co-operative Development Scotland will be discussing co-operative development utilising business networks, and Pierre Liret, of the Confédération Générale Des Scop, will examine how changing perceptions can help grow co-operative economies.
The recent news of the Co-operative Bank ‘Bail In’ should not distract from the overwhelming evidence that co-operatives are stable and that there is a far lower rate of business failure in the co-operatives and mutual sector. Ed Mayo, General Secretary of Co-operatives UK, believes that the equity injection announced recently resolves the banks immediate financial needs. “The Co-operative Bank is on a firm footing,” he said. “It is a bank, like others, but its value is its difference – it needs to remain co-operative”.
If we build co-operative entrepreneurism from the ground up we can utilise one of the international co-operative principles, co-operation amongst co-operatives to help build and re-build our local economies. Wales’ economy could be supported on a base of home grown small and micro-enterprises that utilise co-operative principles.
These co-operative businesses could create competitive advantages compared to businesses operating outside of Wales. They could use their growth to reinvest, to innovate, and to invest in other co-operative businesses to help them flourish and grow too. There are precedents for this in the Evergreen Co-operatives in Ohio and in the Basque region of Spain where the Mondragon Corporation of worker co-operatives employs over 83,000 people.
Government can provide the mechanisms to stimulate co-operative development from the ground up. It can provide focussed specialist business support to start-up co-operatives and existing businesses who want to grow. It can utilise its procurement budgets more effectively. Local Authorities and Housing Associations can identify local business needs and create co-operative businesses that fulfil those needs.
If we encourage co-operative entrepreneurism and invest in our micro-enterprises we can build a localised economy in Wales that isn’t dependent on the whims of international banking or reliant on future European funding and has the foundations from which to grow, innovate and compete externally.
Is this idealistic? Ask the workers employed in the Mondragon co-operatives in Spain, or in the French Confédération Générale Des Scop or the Evergreen Co-operatives in Ohio where these principles have been driving success and growth for years. I would suggest they would see it as simple common sense.
Didn’t Jill Evans and Leanne Wood just return from the Basque country having looking at their co-operative businesses? There’s not reference to it here! One would have thought that they’d have something to say. I see that Labour’s Andrew Davies is mentioned and is the Chair of the Welsh Co-operatives and Mutuals Commission. I sincerely hope that this isn’t a tribalistic Labour financial black hole in early stages of development.
There are very good reasons why workers co-ops and customer-owned mutuals are very much minority forms of company in all capitalist countries around the world. Co-ops may well do good in one or two sectors and elsewhere on a small scale but the limitations of the form mean they will never make a transformative difference to the economy. Encourage them by all means but don’t suppose that they will somehow relieve Wales of the need to have successful profit-driven businesses.
Co-operatives are a more worthwhile form of social responsibility than providing everything by the state. After all it is still privatisation.
I agree that it’s difficult to imagine the entire economy run on a cooperative basis. The cultural change involved would be immense. And any model that is only ideologically driven is bound to come a cropper when faced with the economic pressures of the marketplace. But it can offer practical alternatives to the mainstream which can often work better. An example of this, admittedly not a cooperative one, is Glas Cymru – a not for profit company. Pretty much everyone in Wales is pleased with it and it performs well financially. How long before the Conservative lobby tries to dismantle it? A similar model is being offered for the Welsh rail franchise.
It seems to me that if we are talking about socially affordable housing, the cooperative model offers benefits over,for example, local authority owned housing. It doesn’t get swamped in the bureaucracy and the subsequent inflexibility that has accompanied that particular model in the past. Also involvement in decision-making and taking responsibility for one’s property are enhanced by the cooperative model.
Therefore three cheers for the fact that the Congress is taking place in Cardiff and hopefully we can look forward to seeing some new cooperative initiatives taking place in Wales in the not too distant future.
Thanks for your comments.
David:Co-operatives have good support on a cross party basis in Wales including from Plaid Cymru. I met with Leanne Wood and she was very supportive of our work to develop co-ops. Our team has also been in contact with Jill Evans about employee ownership in recent weeks.
R.Tredwyn: Co-operatives ARE successful profit driven businesses. In fact the co-op sector is outperforming the traditional business sector by a considerable distance and has been doing so for a number of years. Co-ops succeed in a wide range of sectors too.
DW: I likeco-ops, which have their place, of course. But there has never been a successful economy where co-operation was the dominant form of economic organisation. Some politicians in Wales have no knowledge of and a deep fear of the private sector. My only concern is that encouraging co-operatives for them is a form of escapism that means they don’t have to come to terms with private business. All the same, they do have to come to terms with it. Let a hundred flowers bloom, I say.