Automation and globalisation are putting pressure on the global economy despite growth in emerging countries – but the co-op model offers answers, according to economist Linda Yueh.
In her keynote speech at the Global Conference of the International Co-operative Alliance, Prof Yueh said the US had suffered 40 years of wage stagnation because of automation.
She told the opening plenary of the conference that the struggles of the US economy had led to the rise of Donald Trump and his “America First” policy.
Meanwhile, she added, China had risen into the ranks of middle-earning countries, with a burgeoning middle class.
But she warned against Trump’s rejection of free trade and said the models of co-operativism could point the way forward for a globalised economy.
She said automation meant the revival of manufacturing in the US had not brought any benefits regarding wages, and the answer was, therefore, rebalance economies from manufacturing to services – a move which has already paid off in China.
And co-ops are well-suited to this rebalancing process, she argued, because it facilitates innovative ideas needed as the world economy changes and because they are rooted in civil society as well as in business.
“The co-op model has advantages regarding innovation because innovation comes from people, and the investment of co-ops is in their members and customers,” she told delegates.
“This co-operative model has been around a long time and fits this era very well – how do you come up with ideas for what you need to deliver? A lot of companies struggle because they are out of touch.”
She added: “We need to think a lot more about business rooted in civil society – collectives, co-ops, who know their communities, which can promote sustainable growth.
“We need to rethink our model of economic development, away from a top-down one where international experts tell people what to do, and think instead about incorporating views from the bottom up.
“That would be a much more fruitful way to try to tackle the challenges of our time. We need reorientation in thinking about growth, to move from thinking about the speed of growth to the quality of growth.”
This suits the co-op model well, she said, meaning they have a role to play in ensuring those left behind as the economy moves to new skills are looked after.
It will also be useful in meeting the UN Goals for Sustainable Development, she said.
“There are 767 million poor people in the world,” she said. “New approaches need to be brought to end poverty, especially in Africa and South Asia, and this is a role co-ops can play.”
