The recent joint university study The NZ Co-operative Economy confirmed that NZ’s co-operatives, mutuals and societies make up around a fifth of our economy. Importantly, they are Member-owned and led rather than investor-owned and led businesses and organisations.

Fonterra, Foodstuffs, Alliance Group, Silver Fern Farms, Southern Cross Health Society, Farmers Mutual Group, Mitre 10, ITM and Farmlands are among those Member-owned and led organisations.

Members who, by the widely-recognized Rochdale principles, can join their co-operative on a voluntary basis, participate democratically and with autonomy and independence, and who gain financial benefits equitably based on volumes supplied and/or the amount of businesses transacted each year.

Members with skin in the game who are there for the long term, many having been preceded by past generations within a family.

Commercially-driven organisations, many of which are renowned for giving back to local communities and New Zealanders along the way. These include Fonterra’s Milk in Schools programme, Foodstuffs South Island support for Canterbury earthquake victims, or FMG’s FarmStrong and Rural Crime Prevention programmes supporting our farmers and rural communities when in need.

Organisations which are willing to work together and collaborate as part of a large co-op family (co-operation amongst co-operatives), and which form a co-operative sector that is the backbone of our economy.

Cooperative Business NZ is the industry body that supports our co-op Members through advocacy for the co-op sector and business model itself. We facilitate collaboration amongst our Members, and organize networking and educational events such as Governance Training Seminars, Co-op Business Leaders’ Forums and Co-op Roundtable Discussions.

The opportunities to drive shared and increased knowledge, business growth and improvement, and overall sustainability are considerable.

It is with sustainability, and its relevance in supporting the UN’s 17 Sustainable Development Goals, that I think co-operatives can lead the way in terms of contributing towards NZ business, to New Zealand as a country, and to New Zealanders as people.

Organisations and businesses, which through operating within strong co-operative principles, provide greater economic, environmental and social sustainability. Products, services and brands which have been trusted by New Zealanders for decades and, in some cases, centuries.

Of our current 60 Full Members, two-thirds are over 25 years old while four are over 100 years old. Organisations which through their strong endurance, in good times and bad, offer stable employment, decent work conditions, fair employment terms, and security to New Zealanders (over 50,000 kiwis being employed by our co-ops, mutuals and societies at present).

The “The NZ Co-operative Economy” report has also revealed that 1.4 million New Zealanders are Members of co-operatives, mutuals and societies – that is almost 1 in 3 kiwis. We are one of the most co-operative economies in the world as confirmed by the UN’s 2015 World Monitor Report.

While, as New Zealanders, we have been recognized globally for our innovative and entrepreneurial spirit over the past 150 or so years, we can now become better known for our ability to collaborate effectively. Our co-operatives have the opportunity to lead the way across a sector that is both large (one-fifth of the economy) and diverse (wide range of industries represented).

At present we are collaborating within the “Co-op Family” in such areas as preferred supplier agreements (resulting in win/win outcomes), sharing of information and resources, and leveraging on combined volumes when purchasing products and services (reducing costs). The scope for increased collaboration is huge however.

The co-operative business model has continued to gain significant momentum ever since the Rochdale principles were formed back in 1844. Globally, over 2.5 million co-operatives now turn over more than $US3.0 trillion while serving over 1.0 billion Members (around 1 in 7 people on the planet) and directly employing over 12.6 million people. There is no other business model globally which is more closely aligned to supporting the UN’s 17 Sustainable Development Goals as we seek to leave the world in a better place for our future generations.

Here in NZ we are seeing new start-ups as well as existing businesses recognising the benefits of the member-owned business model, members with skin in the game and who provide long term commitment as opposed to investor-owned organisations which can often see their investors here today and gone tomorrow.

US data shows that co-operatives are much less likely to fail than investor-owned businesses with 60 – 80% of investor-owned businesses failing within their first year. Contrast this with less than 10% of co-operatives which fail over this period. After five years only 5% of investor-owned businesses remain active while nearly 90% of co-operatives are still operating. Businesses and are now reverting to the tried and true co-operative business model with its key pillars of member-ownership, benefits to members only (resulting in profits retained locally), sustainability and endurance.

So to summarise, the co-operative sector globally and locally has achieved huge scale, diversity and success while the co-op business model is all about member ownership and benefits, profits staying local, and long term economic, environmental and social sustainability. Co-operatives, mutuals and societies have a strong sense of social responsibility and give back along the way. They operate within 7 key principles (Rochdale) which are both admirable and highly successful. The co-operative business model is that which is the most closely aligned, and in support, of the United Nations 17 Sustainable Development Goals (and all of these being relevant to NZ) as we seek to leave the world behind us in a better place.

We all need to keep supporting our co-operatives, mutuals and societies as well as advocate for the co-operative business model, and all that it stands for, as we endeavour to ensure a sustainable and successful future for our generations ahead.

Craig Presland

CEO
Cooperative Business NZ
May 2017

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