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Technology Bolsters Cooperatives’ Chances of Success

UNITED NATIONS, Jun 19 2012 (IPS) - The success of cooperatives, values-based associations owned and managed by their own clients and hailed as an alternative business model, is highly dependent on their use of information and communications technologies (ICTs), experts say.

Boasting more than one billion global members, cooperatives have progressed significantly in the past decade, triggered by the wider availability of ICTs, such as telecommunications, computers or radio.

“Cooperatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility,” Ban Ki-moon stated at the launch of 2012 as the International Year of Cooperatives (IYC), which seeks to highlight the strengths of the cooperative business model as an alternative to other models.

Cooperatives can be used to further socioeconomic development throughout the world, and ICTs can play a major role in helping them achieve that goal.

“When people understand what co-ops are, they want to do business with them,” said Carolyn Hoover, chief executive officer of DotCooperation LLC, a new top-level Internet domain designed exclusively for cooperatives.

On Jun. 6, the United Nations (U.N.) headquarters in New York hosted a panel discussion, “Cooperatives and the Role of Information and Communication Technologies”, led by Lila Hanitra Ratsifandrihamanana, director of the Food and Agriculture Organization (FAO) liaison office, Gary Fowlie, head of the International Telecommunication Union (ITU) liaison office to the U.N., and Carolyn Hoover from DotCoop.

An alternative model

The three speakers emphasised the potential of cooperatives in achieving internationally agreed-upon goals such as the Millennium Development Goals (MDGs), which fight against poverty, hunger and disease.

This business model can be efficient across a broad range of sectors, according to the panelists, ranging from food security to electricity coverage, particularly in cases the private sector does not consider sufficiently profitable.

“I grew up in a rural area in the United States,” Hoover told IPS. “There was no electricity until co-ops came in, because the private companies just thought they couldn’t make enough money.”

“A co-op-based solution is sometimes the only way to break that mold,” Hoover said.

The speakers also stressed the need for the even wider availability and affordability of ICTs in order to help unleash the potential of cooperatives. In Kenya, for example, farmers can receive funds through mobile phone-based money transfer services that they can later invest in agricultural financial transactions.

According to Ratsifandrihamanana, ICTs can enhance accountability in cooperatives, thus giving them a valuable quality that the private sector often lacks. “Co-ops serve their members better and with more transparency,” she added.

ICTs have indeed become a must for cooperatives in the recent years. “If co-ops want to participate in the future, they have to be part of the way that people are communicating,” Hoover told IPS. “No choice.”

Promoting cooperatives

The panel addressed the main challenge currently faced by cooperatives: the lack of availability and affordability of new technologies in remote areas. They called on governments to help cooperatives overcome this infrastructure challenge by extending the scope of the ICT network.

“I don’t think that the governments do enough to promote co-ops,” Hoover told IPS.

“The share of governments is important. I think that if they don’t help with the infrastructure, it cannot work,” Ratsifandrihamanana explained. “Co-ops need to be recognised on the international agenda.”

But cooperatives also have to deal with the affordability of ICTs, such as the initial cost of computerisation or the cost of website hosting.

DotCoop, which has hosted numerous cooperatives around the world since 2002, is a key player in reducing these obstacles by helping co-ops increase their Internet exposure and web site traffic in an affordable way.

The company, whose motto is “One member. One vote. One domain”, offers a First Year Free Program through which co-ops can establish their web presence at no cost before they start making profits.

“They (the co-ops) just have to hear about it,” Hoover told IPS. “DotCoop was and is an innovation.”

Increasing access to technology

Cooperatives are also benefiting from the improvement in renewable energy, which has increased the accessibility of communication technologies, such as the recently launched solar-powered mobile phone, invented by the Kenyan Habiba Rage to overcome her village’s lack of access to electricity.

“It is very difficult to own a mobile phone because of the energy it needs to keep working,” Rage told journalists. With the solar-powered phone, the problem was solved, both for her and for many cooperatives worldwide.

“Co-ops are leaders in using the Internet to promote their ethical local regional business,” Hoover told IPS.

Global attention is now focused on the upcoming 2012 International Summit of Cooperatives in Quebec in October, where more than 130 speakers will discuss the future of the world’s 750,000 cooperatives.

Kathy Bardswick, chief executive officer of The Co-operators, a Canadian insurance cooperative, called the summit “a once in a lifetime opportunity…to ensure a healthy and dynamic future for the cooperative form of business”.

At Rio+20, the U.N. Conference on Sustainable Development (UNCSD) taking place in Rio de Janeiro Jun. 20-22, cooperatives will be discussed as part of the talks on achieving a more sustainable economic model in the world.

“I think that co-ops can provide an answer to almost any particular problem that the economy has,” Hoover concluded. “They are good solutions to tough challenges.”

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