Hard data on co-operatives and mutuals in Australia is a little scarce. Perhaps it’s because they cover so much territory – from the very large to the very local. So some quick cuts from the CME database.
Not surprisingly the location breakdown of CME’s pretty much echos population density…
And the type is interesting insofar that if we mapped the same by assets or revenue rather than sheer number of entities, then it would be the exact opposite – superannuation funds would be the largest by a fair margin, then health funds… and coops.
What perhaps is more interesting is seeing how the breakdown by industry maps to emerging trends in the sector:
Emerging trends – consumer coops
Community owned assets – The Housing and the Sports & Recreation sector are the most numerous by far – with groups as diverse as model railway operators to the Hells Angels using coops. They often use coops as a mechanism to gather management and ownership of shared infrastructure. We’re seeing emerging interest in the coop housing sector for this purpose from specific demographics such as aged care or respite.
Shared financial services – still going strong when it comes to aggregating consumers money with financial services (aka credit unions, building societies, mutual banks etc), health insurance, superannuation funds. Merger activity and rebranding is often leading these entities to become increasingly remote from the constituencies that created them.
Education, Training & Childcare – numbers are swelled by public schools using favourable legislative treatment to create coops for building projects. Having said that, the childcare sector is another where workers and community can come together the use the coop structure to deliver better outcomes.
Information & Media – the community radio sector in Australia is huge with some 22,000 volunteers contributing over $300m in value to the community. Notably, the local and community nature of these operations has provided natural protection against the disruption that has been rippling through this sector.
Retailing – community ownership of retailers is a growing category of coops. So while most retailing coops are community owned stores there is also an emerging recognition that promoting consumer-ownership is the best defence against online disruption. If we follow in the footsteps of the UK, then we can expect more retailers to be acquired via coops – such as pubs, service stations, your local bakery.
Utilities – current energy retailers are pricing their offers to promote the emergence of community owned energy providers. We’re seeing wide interest across Australia in renewable energy projects that are likely to leverage the coop model.
Emerging trends – producer coops
Agribusiness and Fishing – Some of Australia’s more prominent agricultural coops were demutualised recently (Murray Goulburn and Namoi Cotton). Whether their members were better served by the coop structure is a moot point. Conversely, the federally funded Farming Together Program has sparked another crop of coops into existence. They are yet to appear in the data. Perhaps the biggest emerging trend is this sector is the wave of new technology that is being propelled at farmers. The potential impact on farmers has encouraged many to consider the role of coops in helping them manage their data both individually and in aggregate.
Arts & Culture – with 8% of the Australian workforce now part of the gig economy, we are expecting to see the arrival of platform coops that can help these workers to aggregate their needs and better protect their interests. As the Arts & Culture sector has a long history in using coops to manage resources, they could be well placed to emulate the SMartEU and Stocksy models in Australia.
Wholesalers, Professional Services, Purchasing Services & Shared Services – the industry aggregator coop remains alive and well despite the best efforts of Amazon.
Some days the new world order just plumps itself down in front of you like an overweight chook… So today while scraping Tim Mazzarol’s fabulous cooperative and mutual database (here), I got to thinking about what was going on here.
The website gives access to the most complete list of co-operatives and mutuals in the country. It is all publicly available. And yet, the developers didn’t make it easy to download the database.
Why create the artificial barrier? Perhaps there is some residual sense of ownership of the data. Perhaps it’s an attempt to make the site a destination for accessing the data. It’s a little hard to know.
The thing is that this approach is all back-to-front. It’s the kind of thinking that gave us CRM’s that pretend that customer data is something you own. It is not the way the emerging data-driven culture works.
Data co-operatives are the solution
We are moving to a world where we choose to share data. It becomes an asset that we control – we need to be motivated to share it (even if it means agreeing to your capricious terms of service Mr Zuckerberg).
There is an opportunity in this. At incubator.coop, we have been working on developing a co-operative operating system. A software-as-a-service model that will enable coops of whatever size to access an integrated website, member engagement app, and share registry. It’s intended to be a co-operatively owned solution for the co-operative sector.
Now here’s the thing. Very much like painting the Sydney Harbour Bridge, the CEMI database is out-of-date by the time it is finished. It relies on the collection of static data. At its simplest however the coop mgt system offers a way for coops to share their data. They can choose what data they share to create a dynamically updating database that is truly open for anyone to use. And open, accessible data – that is shared by those that control it – is the way value can be created in the new world order.
Back in 1998 as a part of a Masters in International Politics, I wrote an essay on monetary unions and the future of the Euro. At the time convergence trades were all the rage and the soon-to-be members were busy pretending they were complying with their Maastricht treaty obligations. The essay’s conclusion was that the Euro would not long survive its first test.
History clearly demonstrates that a monetary union will fail without a common political will. The Euro has never achieved political union.
So the Euro stumbled through the private debt crisis of 2008 on the back of central bank largesse. This lead to a global socialisation of the massive debt binge that had accumulated through the mortgage and credit markets. But while the ECB. like most its central banking peers, was busy engorging its balance sheet there was still no consolidation of debts, each nation-state remained it own issuer.
So now we are approaching the next debt crisis – a result of 10 years of zero interest rates where the private sector has been encouraged to re-leverage, valuation multiples are back to all-time highs, and now the central banks are carrying impossibly large balance sheets. The sensitivity of the system to rising interest rates is acute.
And we have a Euro-land dominated by one very large creditor and quite a few large debtors. To date, the creditor has won out, forcing ‘internal devaluation’ on their partners. But the next stage of the sovereign debt crisis is unlikely to play to that script. You can already see capital flight out of Italy through the Target2 balances. The only palatable way out of this mess is to inflate your way out of debt – and the Italians have the keys to that locker. Beware the vagaries of capital in a hurry to find an exit…
During this new stage of the depression, the refugee gold and the foreign government reserve deposits were constantly driven by fear hither and yon over the world. We were to see currencies demoralized and governments embarrassed as fear drove the gold from one country to another. In fact, there was a mass of gold and short-term credit which behaved like a loose cannon on the deck of the world in a tempest-tossed era.
Herbert Hoover, Memoirs, Volume II, Chapter 7, page 67
I'm Rohan Clarke. I help leaders build communities...
Pazzomundo is the re-birthing of a very old