Emerging Co-operatives

Gary Gardner | Feb 22, 2012

Approximately 1 billion people in 96 countries now belong to a co-operative—a form of business characterized by democratic ownership and governance—according to the International Co-operative Alliance.1 Co-operatives are low-profile but powerful economic actors, with the world’s 300 largest ones generating revenues in 2008 of more than $1.6 trillion.2 If these businesses were a national economy, they would rank ninth in the world—ahead of the economy of Spain.3

Cooperatives Table 1

Co-operatives, often called co-ops, are an alternative to the shareholder model of business ownership. Co-ops are governed by their members, who typically invest in the co-operative and have an ownership stake in it, as well as a voice in how the firm is run, usually on a one-member, one-vote basis.  While democratic and egalitarian in outlook, most co-operatives operate in market economies and are subject to the competitive pressures found in market systems. 

Co-op members use their collective power to advance their group interests.4 Members of a worker co-op, for example, might set work hours and wage rates as well as determine when and how the firm could expand operations. Members of a consumer co-operative use their collective purchasing power to get favorable terms for their purchases. Producer co-operatives, often in the agricultural sector, seek to secure strong prices for their goods, while purchasing co-operatives are businesses that buy supplies for use by their own member businesses. Particularly in industrial countries, consumer co-ops vastly outnumber other types, accounting for 92 percent of all co-ops in the United States, for example5 (See Table 1).

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