Anna Kucinska
05 January 2015

Learning from Finland how to build a whole co-operative economy

In Finland there are more member-owners of co-operative enterprises than there are people – the average Finnish adult is a member of two co-operatives and those in a rural setting, such as farmers can even be a member of four.

The Finnish co-operative SOK Corporation (known as the “S Group”) over the last 30 years has grown from around 20% market share and the third largest retailer in the country to be the market leader, with just over 45% market share. The S Group’s retail co-ops are customer-owned, with 1,646 food and grocery stores and 42,000 staff. Co-operatives in the group now cover an unusually wide range of consumer services, from cars and fuel through to department stores, hotels and restaurants.

S Group headquarters in Vallila, Helsinki. Fot.: Wikipedia

According to Sami Karhu from the Pellervo Confederation of Finnish Cooperatives, the co-operative business sector in Finland includes 161 co-operative banks, 20 co-operative insurance companies and a range of water, forestry and farmer co-operatives. The longest running of these date back close to the start of the first co-ops in Finland in 1899, launched as part of a movement to strengthen Finnish society in the face of threats from Russia. Nowadays co-op banks, diaries and shops are present in almost every community in the country. As Ed Mayo writes, the movement’s founder Hannes Gebhard described it as “the peaceful endeavor of the underprivileged to improve their lot by their own efforts, joined together.”

Being a largely rural and sparsely populated country Finland has developed a vibrant community-owned model for sustainable rural outlets that integrate different services, including food, petrol and banking. The success and viability of Finnish co-ops is due to the fact that provided services respond to local needs but have the scale and distribution of a national chain and are thus able to sustain more distant regional economies.

Furthermore, Finnish customer-owned retailers have won market share by making membership something that is meaningful, rather reproducing another consumer loyalty scheme. They also use data and new technologies, e.g. digital mobile retail, to support the close relationship and give a sense of ownership.

Today, the number of co-operative enterprises in Finland stands at 4,626 and one new co-operative enterprise starts up every working day of the year. The newly established co-ops are starting to include non-traditional areas of activity such as woodlands, energy supply, consumer and business broadband and telecoms.

 

Based on Lessons from Finland: building a co-operative economy by Ed Mayo, The Guardian.

Ed Mayo is secretary general of Co-operatives UK and a vice-president of Co-operatives Europe.

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