Co-ops Remain Sturdy Businesses

October 21, 2016

Coop Business Research InstituteYou can argue that the economy has largely bounced back from the state it was in seven years ago, but it’s no secret that traditional community economic development models have stalled and often fail.

But one approach to community economic development is rapidly gaining attention: cooperative business development.

Historically, many co-ops in energy, telecommunications, finance and agriculture have exhibited greater resilience than investor-owned firms and provided enhanced development returns to their local communities. Public entrepreneurs and government officials need to be made aware that co-ops can spur job growth, boost local economies and bring about greater resilience due to their community-service orientation.

Cooperatives have historically arisen when people refuse to wait on big business or government to meet the pressing needs of local communities and their residents. Electric co-ops best exemplify this can-do spirit of public entrepreneurship. Rural folks all across the U.S. organized to plan, finance, build and operate what now numbers 900 electric co-ops, covering over 70 percent of the country, owned by 42 million Americans.

Think about this. The electric grid is often called one of the most complex socio-technical systems in the world. Everyday people — who we are told are subject to the whims of market and political forces — came together to build, operate, govern and own a significant share of our energy economy.

These folks then paid it forward, developing other utility co-ops in telecom and water, agricultural co-ops, child care and grocery co-ops. Consider that even your local credit union (one of over 6,000 in the U.S.) represents your share of ownership in the consumer-finance market.

For those of us growing up in central Illinois, we used to have options if we didn’t go to college. We could count on unionized factory or government jobs or join the military. Those options are limited in today’s economy.

Co-ops must become a greater part of our community economic development toolbox. When the people are given a voice and an opportunity to share in a business’ profits, there is a level of trust and transparency through participation that comforts cooperative members and instills a certain level of shared commitment to that business.

And therein lies a key element in understanding why co-ops remain resilient, despite having fallen on hard economic times. The member-owned democratic governing principle of co-ops affords members the opportunity to shape not just the business, but the local community and global economy for shared prosperity, allowing individuals to take control of their own lives in an era of broken politics and economics.

Here is why this matters. Co-ops cannot be extracted from their host community; they are inherently interwoven with the communities they serve. Common Ground Food Co-op and the U of I Community Credit Union here in Champaign-Urbana serve over 50,000 member-owners by providing access to affordable food, accessible credit and industry-leading job opportunities.

Nonetheless, as resilient as cooperative businesses have historically been, any co-op can be overtaken and fail due to a lack of community involvement. The relationship between co-ops and communities is, by definition, a symbiotic one. They simply cannot survive without each other.

In a time of continued political impasse, co-ops represent the kind of resiliency we need as a country and that we desperately need in our communities. If you want to change your community, don’t sit out; get involved and work through your co-op and, by doing so, know that you’ll be effecting change.

Written by Keith Taylor and originally published by News Gazette on June 12, 2016

Keith Taylor

Keith Taylor is a former board member of Common Ground Food Co-op and a graduate of the University of Illinois Human and Community Development Ph.D. program. He now serves as a research associate with the Ostrom Workshop at Indiana University, a board member of the Indiana Co-op Development Center, and a member of the National Cooperative Business Association, CLUSA International.