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How to give cooperative businesses more clout in the world economy

Against a backdrop of sluggish economic growth, rising wealth inequality, and high unemployment, cooperative businesses are telling an unexpected story of stability, growth, and value. They could do even more good if they received greater political and public support.

By Dame Pauline Green and Charles Gould / October 26, 2012

A sculpture made from butter donated by Land O'Lakes pays tribute to dairy farm families at the Pennsylvania Farm Show in Harrisburg, Pa., Jan. 7, 2009. Op-ed contributors Dame Pauline Green and Charles Gould write that cooperative businesses such as Land O'Lakes 'play a much greater and more diverse economic role in the world than many realize. They employ more than 100 million people worldwide – 20 percent more than multinational corporations.'

Carolyn Kaster/AP/file

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Geneva

Can business do well by doing good? Certainly – but businesses that are structured as “cooperatives” are actually doing better by doing good.

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Against a backdrop of sluggish economic growth, rising wealth inequality, and high unemployment, cooperative businesses – values-based, member-owned, and democratically governed – are telling an unexpected story of stability, growth, and value. And they are doing this at far greater scale and in more industries than many people realize.

The UN “Rio+20” conference on sustainability last June formally recognized the positive role of cooperatives. The conference declaration described them as  “contributing to social inclusion and poverty reduction” and encouraged the private sector to partner with cooperatives.

Cooperatives can have even more potential, if they are given greater political and public support.

These businesses play a much greater and more diverse economic role in the world than many realize. They employ more than 100 million people worldwide – 20 percent more than multinational corporations. In 2008, the largest 300 cooperatives generated $1.6 trillion in revenue – as much as the world’s ninth largest economy.

They include household names such as Land O’Lakes and Best Western in the United States, Canada’s Desjardins, France’s Crédit Agricole, India’s Amul Dairy, Germany’s REWE Group, Singapore’s NTUC Fairprice, and Britain’s Co-operative Group. And they include local enterprises such as Brooklyn’s famed Park Slope Food Coop, the Tibetan Handicraft Society, and Senegal’s Sine Zenith cooperative that produces hibiscus juice.

Cooperatives tend to weather crises more effectively than other businesses. According to the International Labour Organisation, cooperatives in all sectors survive better than their competitors. A Quebec government study concluded that more than 4 out of 10 cooperatives in Quebec and in Canada survive more than 10 years, compared to 2 out of 10 in the private sector.

They also regularly beat out other types of businesses in consumer surveys on measures of quality, service, price, and employee welfare. In France, cooperatives handle 60 percent of retail banking. In Norway, consumer cooperatives have captured 24 percent of consumer market share.

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