The UN has declared 2012 the “International year of the Co-op”, heralding the beginning of a global focus on social-based business models- and rightfully so:

Co-ops make up a large part of the world economy. In Kenya, 63% of the population derives its livelihood from co-op models. 22% of New Zealand’s GDP is produced by co-ops. 42 percent of Norwegians are members of a co-op. They are represented in a huge number of sectors, and range in size from neighborhood convenience stores to multinational production syndicates. Since 2001, co-operatives even have their own domain system- .coop.

A co-op is any organization owned by its members working towards fulfilling the needs and aspirations of its community. Unlike other corporate entities, where social objectives are often tacked on as a marketing strategy, co-operatives have clear social purposes built into their DNA. By being in-tune with their supporting communities, co-operatives are versatile and fast-moving organizations that can adapt to essentially any market fluctuation, making them robust agents of change: The British Co-operative Group began in 1844 as a collection of independent wholesalers- it now operates in a wide array of sectors, from banking to funeral care.

 

Co-ops are also excellent trendsetters. Seeing a lack of healthy and ‘non-processed’ foods in the food sector in the mid 70s, food co-ops sprung up offering healthy and cheap alternatives to Wonder Bread and Oscar-Meyer wieners. Fast-forwarding 40 years, organic and local are widely recognized as important product traits, and organic, local alternatives are available in most supermarkets. Once again, the direct link between organization and community allows co-ops to create new markets and see instant demand.

However, the values and characteristics of co-ops can also lead to some serious issues. Because organizational services are so closely interwoven with community needs, the fate of many co-ops is tied to the success (or failure) of a given communities. When the readymade market for a co-operative dries up, or people begin to lose interest,  it begins to decay and eventually collapses. On the other hand, highly successful organizations face a whole other set of problems: hyperplurality and an unstreamlined democratic process can lead to a loss of competitive advantage as a co-ops reactivity is mired in politics and bureaucratic rigidity.

In a hyperbolic example, This Park Slope food co-op recently had a referendum on whether or not to have a referendum on the sale of Israeli made products: mirroring the American democratic system, a plethora of interest groups sprung up and external third parties began to get involved. Despite strong lobbying from both sides, the referendum referendum was quashed by a large majority of members.

Nevertheless, if correctly managed and supported by a community, co-operatives are a powerful agent of change. Offering localized insight into a communities health, commercial focus and cultural interest, they are a valuable tool in the trend analyst’s toolbox, and the next step in the development of local enterprise.