At the end of last year, Australian ICMIF member The Business Council of Co-operatives and Mutuals (BCCM) launched two new reports on the competitive advantage of the Australian cooperative and mutual sector.
A new report, Leading the Resilience, provides insight into how cooperative and mutual enterprises in Australia have responded to the turbulence caused by COVID-19, providing evidence of their outperformance when it comes to business survival among other key findings. Whilst the 2020 National Mutual Economy Report, provides the latest update on the size of the impact that cooperative and mutual enterprises have on the Australian economy.
Cooperatives and mutuals through COVID-19
BCCM CEO, Melina Morrison said that the Leading the resilience report shows the contribution cooperatives and mutual enterprises (CMEs) make to the economy and their communities is a stabilising factor in times of crisis.
“Leading the Resilience is a fascinating look at the experiences of cooperatives and mutuals through the challenges of COVID-19, informed by interviews with CEOs of leading firms across the CME sector,” Morrison said.
“CMEs combine the strengths of small businesses and individuals focused on shared issues with the reach of much larger businesses to deliver coordinated responses to local and global challenges. With a focus on sustainability and the long term, 2020 has demonstrated why CMEs are the resilient backbone of the Australian economy.
In response to COVID-19, cooperatives and mutuals have:
- bailed in, rather than being bailed out, investing from their balance sheet to aid the recovery;
- been job keepers, moving strategically from the outset to retain employees through redeployment, rather than implementing mass lay-offs;
- implemented mental health strategies for members, customers and their staff.
“Remaining focused on an authentic business purpose can demonstrably lead to increased longevity for businesses. It provides for a more positive, secure and stable experience for staff and members alike. Furthermore, it de-risks the broader economy through the activities of a business sector less exposed to the volatility of share markets than listed firms.”
The report finds that CMEs are a 25% longer lived than their counterparts listed on the Australian Stock Exchange (ASX).
Morrison said that in 2020 cooperatives and mutuals continued to demonstrate the resilience of their business model and the benefits it provides to members and the broader Australian community, even during periods of economic challenge.
“If social resilience is the capability of a community to withstand and recover from a disaster, it is only natural that CMEs are a fundamental part of our recovery, since they are truly embedded in and owned by the communities that they serve.
In his interview for the report, David Carter, CEO of mutual organisation RACQ, said, “I think that in tough times we really have a collective obligation to think about the right balance between, for want of a better word in business, making money, which is economically the rational solution, and the good of society as a whole.”
“David’s perspective is typical of conversations I have had with our member organisations throughout this period. The question of how they are and could be delivering long term benefits to the greatest number of people, while also ensuring financial stability and success reflects the true difference between CMEs and shareholder owned businesses,” Morrison said.
Cooperatives and mutuals are key to post-COVID recovery
Commenting on the launch of the 2020 National Mutual Economy Report (NME), Melina Morrison said the strong links between cooperative businesses and economic resilience cannot be ignored, as the country hopes to rebuild and reinvigorate the economy in 2021.
“This year’s National Mutual Economy Report shows that in 2019, the top 100 CMEs had a collective turnover of AUD 33.9 billion, an increase of 6.3% on the previous year, an impressive result in the context of a slowing Australian economy across the reporting period,” Morrison said.
“While we are now operating on a very different playing field than when the data was recorded, read in tandem with Leading the Resilience, our report into CME resilience through the pandemic, there is a compelling story here about what the future of our economy could look like.
“The data in the report makes clear the scale, breadth and strength of the CME economy. Historically, CMEs thrive where they are planted – creating entire ecosystems around them, generating long term jobs and prosperity for their supply chains, other local businesses and their communities.
“The implications for those regions hit hardest by both the pandemic and the weather crises of recent years are profound. In the face of de-urbanisation as a result of changing work practices, our regional communities can expect significant changes in the years ahead. CMEs offer a way to build up regionally based businesses in parallel.
“The NME Report shows that, in almost every industry, CMEs are making their presence felt, competing with large, shareholder-owned organisations, engaging in global markets while keeping their economic value local. In the long shadow of COVID-19, I think it is worth considering whether orthodoxy in our businesses and in our economy is going to lead us back into the sunlight.”
Read the Leading the Resilience report.
Read the 2020 National Mutual Economy Report.