Do we still need cooperatives? These were the central questions that representatives of research and practice asked in the course of this year's conference of the International Institute of Alpine Cooperative Research (IGA) on 10 November in Innsbruck. The answer was clear.
“Cooperatives were declared a World Heritage in 2016. Was this an honourable farewell to an idea worthy of protection or an appreciation for the fact that cooperatives still have a significant economic and social value?” asked IGA chairman Arnulf Perkounigg at the beginning of the conference.
For Dietmar Rößl, head of the research institute for cooperation and cooperatives at the Vienna University of Economics and Business, cooperatives have been and still are a driving force for entrepreneurial and social innovation. “Due to the fact that cooperatives focus on content objectives rather than investment objectives, their business models are flexible. They can define objectives beyond profitability calculations and mobilise social capital in the form of voluntary work as associations of individuals.”
This makes them predestined to be pioneer companies and develop new markets, where no profits have been achieved before. Furthermore, cooperatives help out where governmental service provision fails – in future, for example, in the area of care for the elderly. To make that happen, however, it is vital that the cooperatives' mission is interpreted contemporarily. Rößl named the bakery cooperative BÄKO as a positive example.
Prerequisites for wave of start-ups
Michael Stappel, head of the Group for macroeconomics and industry research at the DZ BANK explained, how and where to successfully initiate start-ups, using the example of Germany. Targeted investments of associations and a reform of the Cooperatives Act led to a wave of new start-ups between 2000 and 2010. This supported completely new cooperative models. As examples, Stappel mentioned medical cooperatives, cooperations in the area of photovoltaic, cooperative village shops, cross-business guilds, family cooperatives and those in municipal supplies, from swimming pools to schools. Stappel sees productive cooperatives in trade and farming as potential solutions for problems in terms of business succession.
An organised process is paramount for the sustainable success of founding initiatives. Stappel says: “It is important to recognise trends, derive challenges for the economy and society and ask where the cooperative can contribute to solving the problem with its unique advantages. At the end of the day, models need to be developed and sold via multipliers.”
Driving force energy revolution
The success of energy cooperatives in Switzerland was Nadja Germann's topic. She heads the Business Law Institute at the University of Lucerne. 76 out of 642 energy suppliers in Switzerland are organised as a cooperative – several small cooperatives for power supply and heat generation, but also big, internationally operating cooperatives. In the aftermath of the reactor accident in Fukushima, Switzerland is turning to an energy revolution, which is reflected in the amount of start-ups of energy cooperatives.
However, the classic DNA elements of cooperatives are still valid for those new initiatives, says Germann: “This DNA is made up of multi-dimensional value and user orientation, real-economic primacy, local roots and trans-regional networks, democratic decision making, sustainable finances and the unique innovative capability.”
Renaissance of cooperative banks?
Anton Kosta, head of the Raiffeisenbank in Bruneck, which was selected as the bank of the year at the victor awards, explained, how cooperative banks can still act meaningfully today. He senses a renaissance of solidarity and joint responsibility for the local community, which gives the mission of cooperative banks –which for him is the USP compared to other legal forms – a new significance. As an example, Kosta mentioned the financial coverage for families of avalanche victims, through which his bank takes responsibility and compensates for the failure of the welfare state through self-help.
“The positive side effect of these initiatives is that the motivation of employees increases significantly, because the banks actions are filled with a new meaning”, says Kosta. He is convinced that “local cooperative banks will still exist in future, if the membership is prioritised, people's and companies' needs are the primary objective and solidarity is being promoted.”
The following discussion left no more questions unanswered: The question mark in the title of the conference can confidently be replaced by an exclamation mark. However, the success model of cooperatives is not to be taken for granted. Rößl says: “We need enthusiastic managers and employees, who contemporarily interpret the mission and react to current problems of their members. The associations need to support experiments and create blueprints for successful models.”
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Alpine cooperatives boast 100 years of success
IGA awards substantial prize money to support research on cooperatives, especially in the Alpine region.
We believe that it is time to work together on enhancing the central cooperative idea.