This document has been made available in electronic format by the International Co-operative Alliance (ICA)

March, 1998
(Source: ICA Review, Vol. 91 No. 1, 1998, pp 3-6)

Editorial
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Dear Readers,

Following the pattern of recent years, the papers in this special issue were selected from our last ICA Research Committee Conference - an Italian experience in a castle on top of a hill at Bertinoro, outside Bologna. The main theme of that conference was "the co-operative advantage in a civil economy" - an important theme that kept us talking long into the warm evenings. Our Italian hosts with their excellent facilities made it truly memorable. I think the participants did justice to our welcome, and I hope the many postgraduate students on their highly innovative course on co-operatives and non-profit organisations enjoyed it as much as we did. The organisation was excellent, and I would particularly like to thank Sabina Schmidt, Claudio Travaglini, and Gianluca Fiorentini, from Dept of Economics, University of Bologna, the Italian Society of Co-op Studies, L. Luzatti, for their sponsorship, and of course the efficient administrative support of Alina Pawlowska of ICA secretariat, as well as Yohanan Stryjan, from Europe's newest university Stockholm Soedertoern University College.

The aim of this special research conference issue of the Review of International Co-operation, with the support of Mary Treacy, Communications Director of the ICA, is to make more widely known the research findings of our conference participants who came from more than 17 countries from all corners of the globe (Brazil, Argentina, Japan, Australia, Russia, Canada, USA and Europe). Since there were over 30 papers, choosing 10 has not been easy; a number of good ones have had to be left out because our space is limited. I've tried to make a selection in order to get a reasonable spread of papers across the globe, across sectors and across issues. I have also tried to pick papers which address important and general issues. I hope you find that the ten papers chosen reflect range and variety, and relevance to current issues. As the papers were selected partly to show the variety of co-operative research being undertaken globally, I have put them together in a particular order, though there are many other ways this could have been done. The first two papers are quite different but have a link in demonstrating the important role co-ops play in channeling self help and community oriented activity. The next three examine one of the major issues facing co-operatives - globalisation and changing market conditions, their impact on co-ops, and how they can develop strategies for survival and growth. Then follows a paper in a similar vein of strategy, but this time concerned with the all important area of designing co-operative systems for innovation.

These are followed by two analyses of the challenge of new markets where co-ops ought to have considerable "natural" advantages - in the provision of contracted out "public" goods and services, such as welfare services, which are preoccupying many countries with aging populations. The final two papers are concerned in different ways with co-operative values; the first primarily with how to sustain and reproduce them through daily co-operative action; and the second with how to appreciate and make the most of them as a competitive advantage. In fact we chose "Co-operative advantage in a Civil Economy" as the theme for our '97 conference because we wanted to emphasise that co-operative values can be good business, and co-operative business can be good for a more socially responsible and ethical economic development. As a set of papers I trust they stimulate your consideration of these issues.

The first paper, by Rafael Chaves, reports on part of a major study of the social economy in Spain. His analysis of the worker co-operative sector shows a number of interesting things. Firstly it is a very dynamic sector, second only to Italy in Europe, which is quite an achievement given the difficult economic conditions and high levels of unemployment in Spain. Indeed there often appears to be a correlation between the formation rate of co-ops and the level of unemployment, another example of co-operatives being an important instrument of self-help. The large scale economic restructuring has led to opportunities for co-ops providing goods and services with a trend towards the service sector. These co-ops have often been small in size. Similar restructuring in the public sector (including contracting out) and increasing demand has led to growth of co-ops in public and merit goods sectors such as personal and social services - a trend we have seen in many other countries. The second paper, by Akira Kurimoto, is from another country where co-operatives are highly developed, and it pursues a similar theme of self help, but this one also has a strong emphasis on community support (cf ICA 7th Principle). Co-op Kobe, a Japanese consumer co-op, played an important role in helping its community overcome the earthquake disaster in 1995. In doing so, it provided an important channel for volunteer activity, and demonstrated the value of co-operation between co-ops. These community support activities took place throughout the earthquake period from immediate catastrophe to reconstruction phases. Clearly, the community was impressed by what the co-op did during this period, but the co-op has also been strongly influenced by this experience, and as a result is pursuing a policy of "creative reconstruction" of its own business based on a new community- driven strategy.

The next three papers are concerned with how market conditions are changing and how co-ops are responding. John Launder discusses the impact of market liberalisation and structural adjustment on co-ops in Eastern and Southern Africa. Such moves have often been hard on co-operatives, but lauded by international agencies such as the World Bank. And the demise of bureaucratic state- sponsored models of co-operatives may be welcomed, with a move towards more farmer centered or member focused co-ops. However evidence suggests that, while there may be benefits for consumers, taxpayers (reduced state subsidies) and large traders, shortcomings in the development of efficient markets for farmers' products risk damaging agricultural development. Javier Caceres analyses globalisation and its effects on the Canadian wheat industry. He warns that globalisation, together with liberalisation and trade agreements, is changing the balance of power between national state regulatory institutions and domestic producers in favour of international corporations; for example through farmers accepting biotechnical packages (seeds, fertilisers, pesticides) from global corporations; or privatisation of grain handling co-ops leading to increasing outside ownership (although the interesting use of non-voting shares may restrict this process); or potential trade agreement challenging the monopoly marketing power of the Canadian Wheat Board. Farmers need to rethink their role in this rapidly evolving global system, possibly developing an integrated system of their own.

Karin Hakelius also advocates a more integrated system of co-operative agriculture for similar reasons of globalisation. But in addressing the situation faced by Swedish farmers she notes a different attitude of young farmers to co-ops, and so argues for a different form of co-operation. Based on her study of the New Generation Co-ops in North America, she advocates their model which is distinctive in requiring high levels of member investment, a binding contract between members and the co-op, and closed membership (to farmers with contracts). Although much of the NGC experience seems to be in niche markets, it does offer farmers a way to add value often through food processing - i.e. vertical integration to the next stage of the food chain.

The paper by Lou Hammond-Ketilson implicitly poses the increasingly important question "How to develop innovative capacity in co-operative systems?" The experience of CUFIS (Credit Union Financial Information Services), although ultimately unsuccessful, does have lessons for federative co-operative systems. CUFIS was set up as a subsidiary by the secondary credit union in the Saskatchewan CU system, it was expected to stimulate innovation in the whole system, in terms of products, member education, information services, and service management. Lessons from its demise point either to direct control of such key initiatives by primary societies, or to improving the process of innovation within, and the diffusion of innovation between, primary societies.

The next two papers address an area of major new opportunities for co-ops in the world today - the privatisation and contracting out of state services. Gabriele Ullrich develops a useful analysis of forms and sectors of privatisation, before considering the pros and cons of different types of co-operative solutions (comparing consumer and worker co-ops). This co-operative solution to privatisation (also termed "socialisation") seems to offer good advantages, as John Restakis emphasises in his contribution. Drawing on interesting international experience he explores some of the policy issues involved.

The final two papers are concerned essentially with co-operative values. Kai Blomqvist, provoked by the apparent end of the "Golden Age" of Swedish Consumer Co-ops, examines what is meant by co-operative action, in the belief that if this can be sustained, the vitality of co-ops will not decline. The paper provides an unusual but refreshing examination of what it means to act as a co-operator - not just once a year at an AGM but daily on a continuing basis.

Finally Tom Webb, drawing on a considerable amount of market research on people's attitudes and values with regard to co-ops, points to a clear message: people like co-operative values and the idea of using co-ops to meet their needs. He argues that consumer co-ops have unique competitive advantages in their close relationship with their customer/members and in their values of trust, community support, fairness, etc. Provided co-ops actually do what they say about themselves, isn't it time they did more to market a pride in their co-operative nature? I'm sure you will agree that's a good note on which to finish this research special issue! While the Bertinoro/Bologna Conference was our major event in 1997, we have two important activities in 1998. The Research Committee's next international conference will be held in Cork, Ireland, May 13-17 - the theme is Values and Adding Value in a Global Context. Also, we are holding a conference on 'Women, Entrepreneurship and Co-ops' on October 12/13, 1998, in Paris to coincide with the ICA Regional meeting. We welcome all new participants, and hope that we can continue to maintain high quality research activities which make a contribution to the development of the co-op movement globally.

As Chair of the Research Committee, I have benefited from the hard work and support of the other committee members: Yohanan Stryjan of Stockholm Soedertoern University College; Lou Hammond-Ketilson of Saskatchewan Co-operative Centre; and Akira Kurimoto, Japan Society of Co-op Studies. I'd like to thank them for their support in past activities and for their work in developing future plans to strengthen our global organisation and activities.

Finally, as all papers were shortened by their authors, I would like to thank them for their research and for writing both papers! I would also like to thank Mary Treacy, ICA Communications Director, and Laura Wilcox and Alina Pawlowska for editing the papers and putting this Special Issue together.