Why Do Co-ops Work?
Co-ops can succeed where other business models may fail. The key to their success is in their diversity, durability, and commitment to their communities.
CO-OPS ARE DIVERSE
Think: housing co-ops; Think: Gay Lea Foods Co-operative; Think: Countryside Energy Co-op; Think: child care co-ops; Think: Mountain Equipment Co-op; Think: Sleepless Goat Cafe; Think: AGRIS Co-operative; Think: Natural Burial Co-op ... or Grand River CarShare ... or Kingston Community Credit Union or ....
These businesses are all different, working in different sectors and filling different needs in their communities. But they're all co-ops.
One thing they all have in common is that all co-operatives are organized according to the Seven International Principles of Co-operation. This foundation on which all co-ops are built is reflected in the ICA's seven principles set down by thousands of co-operatives at its centenary.
CO-OPS ARE DURABLE
A 2008 report by the Quebec Ministry of Economic Development, Innovation and Export on the survival rate of co-operatives in Québec says that in 2008, the survival rate of co-operatives was higher than other types of businesses, which is consistent with a 1999 Quebec study. The longevity of co-ops was also presented in two reports showing the durability of co-operatives in Alberta and British Columbia.
| Survival Rate of Businesses After... | 5 years | 10 years | Long Term |
|---|---|---|---|
| All Co-operatives | 64% | 46% | 30% |
| Private Sector Companies (Statistics Canada) |
36% | 20% | N/A |
| Manufacturing Businesses (Research Institute on SME (UQTR)) |
47% | 30% | N/A |
A summary of this report (translated into English by On Co-op) can be found in the 'Related Documents' section at the right side of this page, along with the Alberta and BC studies.
- An International Labour Organization (ILO) report provides compelling evidence that co-ops are more resilient than other business models in times of economic crisis. Resilience of the Co-operative Business Model in Times of Crisis was authored by Lou Hammond Ketilson, Director of the Centre for the Study of Co-operatives at the University of Saskatchewan and Johnston Birchall, Professor of Social Policy at Sterling University in Scotland. The report uses historical and current evidence from around the world to explain the sustainability of co-operatives and why this form of enterprise can withstand crisis. It also makes recommendations for ways in which the ILO can strengthen its efforts to promote co-operatives.
CO-OPS STRENGTHEN THE COMMUNITY
Co-operatives have a long and successful tradition both in Canada and around the world. They are driven not solely by profit, but by a desire to bring fairness, equity and justice to the marketplace, and as a result they can achieve many goals that other business models may not.
- Co-ops help people obtain goods and services that they may not otherwise be able to afford on their own. By pooling their purchasing power through a co-operative, members can obtain products and services they can afford. People from all walks of life can benefit from membership in a co-op.
- Because co-ops are open to everyone regardless of income or social status, and each member has an equal vote, co-ops can be more accountable and inclusive than other enterprises.
- Co-ops help build stronger communities. Since most co-ops are community and regionally based, investment in, and surplus revenue from the co-op stay within the local community. Every dollar invested in the local co-op, has a significant multiplier effect within the community.
- Co-operatives enable communities to have a degree of self-determination that is less subject to outside forces. Community-based ownership also make co-ops less vulnerable to takeovers and closures by outside decision-makers.
