Anu Puusa The case for coops the invisible giant of the economy TED
Transcriber:
I’m so happy and proud to be here.
When I told my husband
about this wonderful opportunity,
he said, “TED Talk? Wow,
I get to do that a lot around here.
It’s finally someone else’s turn.”
So, yes, I happen to be married
to a wonderful man named Ted,
which is pretty rare
in Finland, where I’m from.
It’s not a typical Finnish name
at all, trust me.
Myself, I’m a business professor,
and I love teaching.
But you know what?
My students are fed up,
they’re really fed up with the way
business is screwing up the environment
and making wealth inequality worse,
and putting money and profits
above all else.
And what really makes them mad
is when I tell them
about the cooperative movement.
They’re angry,
because once they understand
how cooperatives work,
they feel like a secret solution
has been kept hidden.
Before I tell you more
about why cooperatives are so great,
I want to explain what they are.
A cooperative is an organization
that is owned by its members,
who are also its customer
and decision maker.
And unlike most businesses,
where certain owners
can buy more power and influence,
in a cooperative,
every member has one vote,
which was a revolutionary idea
back when the model was first introduced.
A regular man, not to mention a woman,
with no significant means
or a prestigious position in a society,
as an owner, an equal partner in business?
Unheard of.
Perhaps it’s still a bit revolutionary.
Cooperatives exist in a sweet spot
between the for-profit
and nonprofit worlds.
Their uniqueness
is based on the idea of duality.
They have two distinct
but complementary roles.
On one hand,
they act like any other business
and try to make money.
But on the other hand,
cooperatives are and do so much more.
They are people-centered enterprises
run by and for their members,
and they try to achieve economical,
but also social and cultural goals
to benefit those members
who are just regular people,
like you and me.
And what has happened for almost 200 years
is that cooperatives have proven
to make decisions
with a view across generations,
instead of quarter-to-quarter,
to benefit more people
and to anchor wealth in communities
that might not otherwise
attract investment,
while still being
competitive and innovative.
Sounds pretty good, right?
I guess that’s why,
at the end of a class the other day,
a student, all red and jazzed up,
basically shouted at me.
“I’ve always been a straight A student,
done all the work, read all the books,
and now you’re telling me
that all my life,
I’ve missed hearing about a movement
with this magnitude?”
I get this a lot.
The organized cooperative movement
started in 1844,
with the [Rochdale Equitable
Pioneers’ Society].
This was a group of weavers and artisans
who, out of desperation,
opened a store together,
to sell things that they could
neither get nor afford alone.
The cooperative movement spread from there
and became a global phenomenon.
Many of the modern-day credit unions
and farm credit systems
you see in North America
are descendants of the famous
cooperative Raiffeisen system in Germany.
And here in Finland,
a man named Hannes Gebhard
is considered to be the father
of the Finnish cooperative movement.
In the 19th century,
he introduced cooperatives
to help people tackle debt,
poverty and unemployment.
It turns out this is the foundation
of a country known
for its democratic values,
high-quality education
and the happiness of its citizens.
And this line of impact
of the cooperative movement
can be found in other places
in the world too.
I’m proud to say that in relative terms,
Finland is one of the most cooperative
countries in the world.
We have about 5.5 million people
who have over seven million memberships
in cooperatives that run everything
from groceries to banks.
Each time I shop
at our grocery cooperative,
when I fill in my gas tank,
eat at our jointly owned
restaurants, stay at a hotel
or buy clothes or hardware stuff,
I get bonuses that can be
up to five percent.
And when I pay with
our cooperative’s bank card,
I get an additional half percent off.
And I know that when
the cooperative is doing well,
it’s not funding a single person’s
luxury vacation in the Bahamas.
Every year, a governance body
comprised of elected representatives
decides how any operating
surplus will be used.
Some of the money
will go back to the members.
For example, this year,
our consumer cooperative,
Pohjois-Karjalan Osuuskauppa,
or PKO, as we call it –
is part of the S Group,
which is the biggest
cooperative group in Finland –
they had a surplus of two percent
on members' purchases,
and 12 percent return on money invested.
When you add up
the savings and the return,
my family received
more than 2,000 euros back,
which is more than we spend
on groceries in one month.
Not to mention that our groceries
are about seven percent cheaper
than its main competitor.
I’m a member-owner in three cooperatives,
and my husband has four memberships:
a consumer, a bank, an insurance
and a water cooperative.
We have two beautiful girls
who are 10 and 12 years old,
and they are also
member-owners of the S Group.
Their memberships cost us
one hundred euros each.
We want to pass on the legacy
and teach them about the benefits
of cooperatives early on.
And of course,
they are very happy
about the yearly interest
on cooperative capital.
But it’s not just about us
getting money back.
It’s about the greater good
for our community.
I’m not only talking
about taxes and employment,
even though our consumer cooperative
is the biggest employer in the area.
I’m talking about support
for young people, sports, arts,
university and cultural events.
For example,
as a member of the board of PKO,
a few years ago, we agreed to build
a sports hall for Lieksa,
which is a nearby city here,
in the eastern part of Finland,
belonging to our cooperative’s
operational area.
After we built it,
the city signed a very long-term
rental agreement with us,
so financially, the investment made sense.
And of course, it was a major gesture
to the local people,
who now have proper facilities
to do all kinds of sports.
In another case,
we ended up rejecting
the investment proposal
regarding building
a senior house downtown.
The idea was a very good one,
but we declined,
because it was a big housing complex
requiring a lot of capital
with a low expected investment return
that would only serve
a small part of the membership,
less than one percent
of our over 100,000 members,
and therefore, we decided against it.
In a cooperative,
if we only emphasize profitability,
the interests of the membership
may quickly become secondary.
On the other hand,
a situation where too much consideration
is given to the members' differing
and changing interests
may jeopardize business performance.
So therefore, finding
a balance is important.
One role should not have
priority over the other.
Metaphorically speaking,
cooperatives, by nature,
have been given two solid feet,
and as you know, it’s much easier
to stand on two feet than on one foot.
Ensuring that is the board’s
most important task.
It is a very cool system.
That balance means
that cooperatives can help us
meet ambitious environmental goals.
In Finland, for example,
S Group aims at carbon negativity
by the year 2025.
REScoop.eu, a network of 1,900
energy cooperatives
with way over one million members,
is promoting community energy,
which is key to a decarbonized economy
and a crucial step
in tackling climate change.
This is about more
than windmills and solar panels.
Community energy can help overcome
the urban and rural divide
and close the gap between north and south,
between rich and poor,
because it empowers local people.
Community energy
leads to energy democracy,
holding the promise
of an economy and a society
based on cooperation
rather than competition
within the boundaries of planet Earth.
What is so wonderful
about the cooperative system worldwide
is that while cooperatives may sell
different products or services,
the goal is still the same
for all of them,
to create sustainable businesses
that benefit the people
and the communities they serve,
lasting for generations.
This is also a significant
global phenomenon,
an invisible giant of the economy,
resonating so well with the values
of regular people,
a form of business that recognizes
that we people have
other motivations and interests
than purely and only economical ones.
Today, there are more than three million
cooperatives around the world,
with over a billion members,
employing 280 million people,
which is 20 percent more
than multinational companies.
Cooperatives sell more
than two trillion dollars' worth
of goods and services.
That number is larger
than the GDP of Canada.
Doing good business
and doing good at the same time
really makes an excellent match,
and this really works,
because it’s all about participation.
And while having lots of people
involved in any project
can often make things
a little bit more complicated,
we can also often get
better and fairer outcomes.
We can create better businesses,
if we truly include the people they serve.
When we Finns travel abroad,
we tend to brag about our sauna,
sisu, fresh air,
clean waters and endless forests.
And of course, that the real Santa Claus
comes from Finland.
But what we really should be
bragging about is our cooperatives.
Because unlike capitalism,
the cooperative movement is not broken.
It just needs better marketing.
Thank you.