Co-ops Are Booming - But Can Do Even More for Our Economy

07/06/2016 12:36 | Updated 07 June 2016


With the publication of its new analysis of the UK's co-operative sector, Ed Mayo of Co-operatives UK looks at why we need to see a boost to the UK's co-operative sector.

There are 17.5 million people across the UK who are now members of co-operatives. That's a third of the adult population who together own businesses as diverse as dairies, cricket clubs and village shops. The UK's 7,000 co-ops are much loved because they give people a say in how they are run.

In a challenging market, farmer owned co-ops like Arla Foods, for example, are giving farmers a way to come together to get a better deal, while co-ops such as Swindon Music Co-operative are creating stable work for self-employed teachers and housing co-ops like Riverside Housing are giving tenants control over their own homes.

The sector has enjoyed strong growth in recent times - more than 2 million people have joined co-ops in the last five years. But we're only just scratching the surface of what can be achieved in driving the growth of the UK economy.

As things stand today, co-operatives contribute around £34bn a year to the UK economy. The changes in our society, including increased mistrust of big business, suggests that figure could grow significantly over the coming years, perhaps even achieving the 10% of GDP achieved in some European economies.

By 2050 co-ops should be recognised as vital to the stability and sustainability of the UK economy. Alongside giving people a say over the businesses they use, co-ops create a more balanced, fairer economy that gives back to their communities by sharing profits and sourcing locally.

In order to achieve that goal, we need to encourage a start-up revolution and we believe the government can help play its part to foster that revolution too. There are currently 7,000 co-ops in the UK. If we can double that to 15,000 - in everything from housing and schools to the creative industries - we'll be motoring. Data suggests that the majority of people want more control over their workplaces and local areas, and with co-ops twice as likely to survive their first year of trading as other SMEs, the rationale for starting up new businesses as co-ops is compelling.

This is partly about putting co-ops on a level playing field and making it as easy to start a co-op as any other business. And it is about starting a cultural shift in our economy, where sharing the proceeds of growth with customers and employees becomes the norm, much in the same way as the rise of laissez faire economics dramatically shifted the business paradigm over 30 years ago.

There is a strong precedent elsewhere for achieving a higher economic contribution from co-ops. For example, Sweden has a thriving co-operative economy, which supports a country with one of the lowest levels of national debt, low and stable inflation and growing investment in healthcare, education and research.

Drill down even further and you can see regional examples of co-operative success in towns such as Bologna in Italy, where three out of four citizens belong to a co-op. It's perhaps no coincidence that Bologna's region of Emilia Romagna has the least inequality between rich and poor of any region in Europe.

So why shouldn't we achieve the same position in the Co-op's home town of Manchester for instance? The Co-op Group, the UK's largest consumer co-op has already played its part to kick off that process. They've set a target of welcoming one million new members over the next five years and are launching a new membership offer that will see local charities and good causes benefit every time our members buy our goods and services. Through the new initiative they are aiming to give £100m per year back to their members and their communities by 2018.


This isn't just about doing business a different way. Fostering a co-op economy can unlock the key to innovation. Just look at the trend of community shares, which has taken hold over recent years. The growth in the number of people pooling resources to save local assets and services, from shops to wind farms, is genuinely exciting. Official data suggests around £60 million has been invested in co-operative schemes like these. But the potential to go further is huge.

Research also suggests that co-ops can help address the productivity gap that has held back growth and wages in the UK since the financial crisis of 2008. A study by Co-operatives UK found that "in several industries, conventional firms would produce more with their current levels of employment and capital if they adopted the employee-owned firms' way of organising production". It's not for every business but the economic benefits of a more diverse economy are clear.

Some of the recent business trends make it clear that the development of a new 'sharing economy' is well underway, expected to be worth £300bn in the next 10 years. Businesses in sectors as diverse as transport (Uber), accommodation (Airbnb), fashion (Girlmeetsdress) and eating out (Tablecrowd) are redefining the way we live and work.

Sharing is big business now and, in this context, we can expect to see co-operatives becoming more and more prominent - giving people a say, supporting local communities, and providing a boost to the economy in the process.

Read the full UK co-operative economy 2016 report at