25 May 2018
Interview with Hyungsik Eum, author of the Second Global Report on “Cooperatives and Employment” published by CICOPA, the International organisation for industry and services cooperatives. He is the new Strategy and statistics coordinator of the International Cooperative Alliance and the data analyst at CICOPA.
We know from a report by CICOPA that cooperatives provide jobs to 10% of the globally employed population. How are they making a difference beyond this number?
In the second Employment report (2017), we estimated that jobs created in cooperatives (employees and worker-members) totalled about 27 million, and people working with or through cooperatives (mainly producer cooperatives) totalled 252 million. This means about 10% of working population works in or through cooperatives. However, this means also that, in most of cases, cooperatives are a tool for their own work and employment rather than a workplace for their main job..
Although it would be very difficult to make general statements beyond the numbers, based on our observations and available information, we can say that “cooperative employment tends to be more sustainable over time, brings less income inequality, is characterized by a better distribution between rural and urban areas, and offers a higher level of satisfaction and self-identity at work than the average. Cooperatives are also a large laboratory, experimenting with innovative and sustainable forms of work and work relations within the enterprise." (CICOPA Strategic paper on the Future of Work) Personally, I would add one more point. I would say that cooperatives make different senses and ways of 'working'. In worker cooperatives, worker-members have the sense of owning their jobs and workplaces. Concerning employees in different types of cooperatives, it is difficult to generalize their sense of work but I found that, in well-run cooperatives, employees share more of a sense of family or friends with the members they serve. For producer-members who use cooperatives for their own businesses or production activities, they have different senses of the role of cooperatives in their work – but cooperatives also provide more sense of community in their local areas beyond work and employment. (You may see more in detail in the first Employment report pp. 55-79)
What are the key trends likely to impact the future of work?
Experts see many key trends affecting the future of work. In the strategic paper, CICOPA focuses more on four interrelated categories of issues: 1) technological change and the knowledge economy; 2) change in demographic, societal and environmental trends; 3) globalization and de-industrialization, and 4) the impact of the reorganization of work on working conditions, inequality and social protection. We believe that industrial and service cooperatives might be answer to these issues to some extents.
Is automation a real threat or could it bring new opportunities for cooperatives?
We need to distinguish different types of cooperatives. For consumer cooperatives, financial cooperatives and other user-based cooperatives, the automation would be a good opportunity for improving services to members. If these cooperatives do not adopt automation for certain services, they might lose their competitiveness in the market. However, automation will bring difficult issues for their employees. The situation is not so different from conventional enterprises. Cooperatives would have to find optimal solutions between the interests of their members and their workers. . For worker cooperatives, approaches might be different. Worker-members would not be always happy with automation which might directly threaten their jobs. However, to compete in the market, they need to keep up with technological development. Many worker cooperatives do not hesitate to invest in the automation of their production process and service provisions. At the same time, we have observed that worker cooperatives whose main purpose is to create and maintain their members' jobs have tried to diversify their businesses in order to maintain jobs in new or related activities.
Briefly speaking, it is difficult to say that automation would be good or bad but it is a real challenge all cooperatives have to face.
Are cooperatives better equipped to cope with these challenges?
I don't think cooperatives in general are better equipped to cope with these challenges. The challenges at societal level affect all kinds of organisations and individuals. If anyone would have enough money for investing in new activities and for developing new business models, we can say that he would be better equipped for going through these uncertain situations. But it is not always the case for cooperatives.
I think cooperatives, by their nature, are based on people who suffered from problems but can find appropriate solutions from what they have to hand. This might give a distinct advantage to cooperatives compared to conventional enterprises. Their democratic governance and ownership might also strengthen this ability to produce more solid solutions. However, it also means that cooperatives face inherent disadvantages – for example, slow reactions toward external impacts, conservative attitudes of existing members, lack of entrepreneurial adventurousness... The real challenge of cooperatives today would be how they could maximise the advantages in their nature and minimize the disadvantages, so they can demonstrate the power of the coop model to meet these challenges.. They might also succeed in following conventional enterprise models in abandoning their nature. However, would it be a real success?
What changes would be required in terms of coop legislation to ensure the sector receives the support needed?
One of important points which explain the success of cooperatives in some countries, such as Italy, Spain and France, is that the law requires a sufficient level of indivisible reserve. By accumulating indivisible reserves, cooperatives could be more resilient during financial crises. (for detail, read here). Beyond economic performance, it should be emphasized that the indivisible reserves strengthen the sense of community and commons in a cooperative, which will continue even over generations. In that sense, cooperatives would not be considered simply as economic tools for maximizing members' interest but as a valuable social asset of the broader community. This repositioning, which might happen not only in members' mindset but also in other social partners' viewpoints, would allow cooperatives to be recognized as the common asset of their local community. In this way, the necessary support from the state or other actors would be better justified and enhanced accordingly.