There has been an ongoing effort by the International Co-operative Alliance (ICA) to report on the contribution co-ops have made to the worldwide economy. It is an impressive share of revenue generation, and likely more than most people realize. But co-ops and their success can offer more to the world economy than the traditional value that is based on income produced. Reporting the results of successful co-operatives is becoming more dynamic as the ICA tracks worldwide co-operative progress.
The Global 300
In October 2006, ICA published a report measuring the top 300 co-ops worldwide. The report, called the Global 300, measured the impressive revenue (turnover) created by the world’s biggest revenue generating co-ops. As the Guardian (November 2013) would later point out using Global 300 metrics, “If you still think cooperative groups are limited to small grocery stores in hippie towns, think again. Co-ops have become major forces in the banking, insurance and retail industries.”
By 2010, the Global 300 report listed revenues totaling $1.6 trillion. This put co-ops in 9th place when compared to the GDP of countries. This report put the top 300 into five sectors:
- Agriculture, the biggest being Zen-Noh in Japan with nearly $57 billion
- Banking, the biggest being Crédit Agricole Group at almost $104 billion
- Consumers Goods, the biggest being ReWe Group (Zentral-AktiengesellscharFU) in Germany at almost $50 billion
- Insurance, with Eureko in the Netherlands making $28 billion
- Workers, Industrial, Artisanal and Service Producers, with Mondragon in Spain making $23 billion
By the time the ICA had published metrics in the 2013 report, the combined revenues produced by the top 300 co-ops had surpassed $2 trillion.
Beyond Measuring Financial Performance
By 2013, a reformatted report counted over 2000 co-ops worldwide that generated over $2.5 trillion in combined revenue. The financial metrics of the global 300 were still tracked in the report and divided into slightly different categories of: insurance (41%), agriculture and food industries (28%), wholesale and retail (21%), banking (5%), industry and utilities (3%), and health and social care (1%).
But revenue generation is not the only way to measure co-op success. To address other success indicators beyond Global 300 metrics, The World Co-operative Monitor Project was established in 2012, formed by the ICA and The European Research Institute on Cooperative and Social Enterprises (Euricse). The 2013 report, called Exploring the Co-operative Economy, analyzes co-ops more holistically focusing on:
- Organization Description: metrics that focus on operational model, type of organization, sector of activity, and location.
- Operational Impact: metrics that describe the organizations members, employees, and volunteers.
- Financial Performance: reported financial metrics.
As the report says:
“In particular, several researchers focused on the fact that co-operatives’ economic efficiency cannot be evaluated using the traditional economic and financial indicators used to measure for-profit enterprises. It has considered that co-operatives’ goals cannot be simply reduced to profit maximisation or economic and financial wealth, but are for the maximisation of benefit for their members or, in the case of social co-operatives, for the community. As a result, any analysis ought to consider, for example, the difficulties in interpreting the economic profits of co-operatives due to member compensation. Indeed, profits often results in a ‘net zero surplus’ because of the distribution of the gross income to members. On these bases, appropriately adapted financial indicators can contribute to the interpretation of organisational efficiency but cannot be used to evaluate effectiveness.”
A federation of co-ops, for example, can be measured in revenue, number of united co-ops, or number of employees. The world’s biggest revenue-generating agriculture co-op, the Zen-Noh co-op, in Japan generates $64 billion in sales, consists of 1,173 co-operatives, and employs more than 12,000 people. The Mondragon co-op in Spain, by comparison, generates $19 billion annually, but employs and supports around 80,000 people.
Defining a co-op
The definition of a co-op can be problematic, as the Guradian points out. The ICA definition: “A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.” Further characteristics are defined by the ICA such as values, including equity and solidarity.
Co-op models vary, and made segmentation necessary for the the “population under study” for Exploring the Co-operative Economy. Co-op types which impact the co-operative economy included: co-operatives, mutuals, co-operative of co-operatives/mutuals, co-operative groups, co-operative networks, and non-co-operative enterprises.
As time goes on, “the World Co-operative Monitor project intends to propose and promote an improved methodology for data collection and analysis of co-operatives worldwide.”
As an alternative to wealth distribution, co-ops can also redefine how we measure a successful economy.