Industries around the world are applying cooperative ideals to modern business models.
Ten years ago, the northern Italian art town of Vicenza was home to roughly 1,300 gold jewelry manufacturers. Despite the craft’s necessary skills, unemployment has soared as cheaper competition from Chinese firms and rising raw material prices raze local businesses, reports the Financial Times (subscription required). Local leaders’ solution to the loss of jobs involved creating a cooperative that retrains gold industry workers in the leather weaving business and secures their employment in the ranks of a prestigious leather handbag producer.
“The cooperative has given a depressed zone the impetus to start up a business,” said the Veneto region’s president of luxury goods group Bottega Veneta. Better yet, workers can now look to their future with hope.
In China, cooperatives stand on the “front line of the food price battle,” reports the Financial Times. Beijing is opening cooperative grocery stores in an attempt to control the country’s increasing food prices. Forty low-priced grocery stores have opened this year, and 300 more are planned. The stores keep prices low through a combination of state subsidies and direct buying from farmers.
Even monks — who some might call part of the ultimate cooperative collective — are expanding their outreach and recruiting new talent using blogs, social media, and online channels. The cooperative spirit is growing worldwide, and the financial sector can find its own solutions by tapping the collective power of the credit union.
Credit unions are cooperatives. It is a charter for customer-owned services based on cooperative principles. Without these principles leading the institution, it will fall short of the results and ideals a cooperative is supposed to achieve.
But can these principles breathe new life into credit unions’ understanding of the competitive advantage? Evidence from credit unions and grocery cooperatives show these concepts do translate into business differentiators. And CU*Answers is developing the concept of a “Cooperative Score” as an indicator of cooperative business health. (Learn more in the April 26 webinar, The Power of the Cooperative Advantage.)
Regulators, legislators, and financial firms are still defining the shape of the industry in the 21st century. In many situations, an innovative approach to the many lingering issues from the Great Recession is a cooperative approach. The cooperative spirit is growing worldwide, and the financial sector can create its own solutions by tapping the collective power of the credit union.