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Change Agent

Cooperative businesses provide a new-old model for job growth

Co-ops worldwide represent much more than hippie grocery stores: They're a fast-growing way to do business better in fields from finance to agriculture to industry.

By Jessica ReederSharable Magazine / April 2, 2012

A worker unloads processed cheese from a pressure cooker at Amul satellite dairy in the Indian state of Gujarat. Amul, one of the popular Indian dairy brands, is owned and marketed by Gujarat Cooperative Milk Marketing Federation. The United Nations has named 2012 as the International Year of Cooperatives.

Amit Dave/Reuters/File

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What do coffee growers in Ethiopia, hardware store owners in America, and Basque entrepreneurs have in common? For one thing, many of them belong to cooperatives. By pooling their money and resources, and voting democratically on how those resources will be used, they can compete in business and reinvest the benefits in their communities.

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The United Nations has named 2012 as the International Year of Cooperatives, and indeed, co-ops seem poised to become a dominant business model around the world. Today, nearly 1 billion people worldwide are cooperative member-owners. That’s one in five adults over 15 – and it could soon be you.

Why cooperatives?

Cooperatives have been around in one form or another throughout human history, but modern models began popping up about 150 years ago. Today’s co-ops are collaboratively owned by their members, who also control the enterprise collaboratively by democratic vote. This means that decisions made in cooperatives are balanced between the pursuit of profit and the needs of members and their communities. Most co-ops also follow the Seven Cooperative Principles, a unique set of guidelines that help maintain their member-driven nature.

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From their beginnings in England, cooperatives have spread throughout the world. In Ethiopia, cooperation helps women and men rise above poverty. In Germany, half of renewable energy is owned by citizens. In America, 93 million credit union member-owners control $920 billion in assets. In Japan, a sixth of the population belongs to a consumer co-op. And in Basque Country, a 50-year-old worker co-op has grown to become a multinational, cooperative corporation.

If a “multinational cooperative corporation” sounds strange to you, you’re not alone. The past century’s multinational corporations, in most cases, were anything but cooperative. During the 19th and 20th centuries, the business landscape was dominated by large, private corporations controlled by a small number of people; those corporations tended to pursue profit without consideration for people, the environment, and in many cases, ethics.

While 20th-century corporations were good at making money, the 21st century finds humanity in need of new business models that value sustainable growth and community benefit. The UN stands behind cooperative models, and in 2012 will dedicate its efforts to raising awareness of co-ops, helping them grow and influencing governments to support them legislatively.

Raising cooperative awareness

Cooperatives are more widespread than you might think. From banks and credit unions to apartment buildings to worker-owned businesses, co-ops appear in every facet of today’s economy. In most cases, they formed in response to economic crises like the Great Depression, or to let small groups compete in monopolized markets. In 2012, both of those conditions exist – and unsurprisingly, so do cooperatives.

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