Say Cheese… or how Gruyère got co-operation going over six hundred years ago

We are launching now a fresh re-telling of the story of co-operation, in a short book which tracks early cases of mutuality around the world. The book, available free to download and in English and Spanish editions, is called A Short History of Co-operation and Mutuality.

Drawing on this, I have also put together a slide deck of twelve early co-ops, with design support from colleagues at Co-op News.

One of the examples, that came to me courtesy of colleagues in France, Coop FR and the international social economy journal RECMA, is the case of cheese.

In rural Switzerland and the Franche-Comté region of France, cheese-making societies, termed Fruitière (ripening) started in the fourteenth century, then spreading to other European countries. From informal reciprocity, exchanging milk between neighbours, these developed into full mutual societies. Each round typically lasted for a year, starting in February with the first milk coming in March or April. The accounting system was in urns of milk – the farmer that took the cheese was then debtor to others who had contributed milk – and the product, and dividend from its sale, was the cheese.

In these mountainous areas, it is possible to trace the lines of mutuality from these neighbourhood associations, present in different forms and with different functions across medieval Europe, through the development of self-governing quality standards and charters, such as the Appellations d’Origine Protégée, to the co-operatives that are responsible for the production of Comté and Gruyère cheese today.

Writing in the late nineteenth century, George Jacob Holyoake declared “it is clear that Gruyère should be the favourite cheese of co-operators, as it is the first cheese made on their system.”

There are many more stories in the book. Thanks to the International Co-operative Alliance, around two thousand delegates coming to Malaysia from around the world will get a copy. My hope is that we learn more about and take confidence from the enduring way in which different cultures and different generations have harnessed co-operation as a way to live and work together.

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What if it is co-operating and not competing that’s key to getting ahead?

Business, careers, even education… we are increasingly told that to get on is to get ahead, to compete. But what if it wasn’t competing with others that powers success in business and in life, but co-operating with them?

Co-operation in the economy is not often talked about, but it has always been there.

The first powered flight took place in December 1903 by the Wright Brothers. What followed was then a bitter rivalry for the next fifteen years between them and a rival airplane maker, Glenn Curtis. Come America’s entry into the First World War and no American airplane was viewed as good enough to go into combat. The Wright brothers and Glenn Curtis were willing to see the airplane industry grounded than to see the other win out in terms of setting standards for airplanes to succeed.

Soaring_flight,_by_Orville_Wright,_Kitty_Hawk,_NC,_Oct,_1911.(10469_A.S.)

Orville Wright, 1911 – U.S. Army Air Service photo collection ID# in caption above Photo Courtesy of the Unites States Air Force Historical Research Agency, Maxwell AFB, Alabama. Photos are from the national archives (NARA). Source: http://www.afhra.af.mil/photos/mediagallery.asp?galleryID=5585 

 

In 1917 US Congress forced the formation of the Manufacturers Aircraft Association. This was a way to set shared standards and pool the critical patents needed for airplanes and the aeroplane industry to take off.

The same idea of a patent pool is used today to cut the costs of HIV retroviral drugs in Africa.

Sometimes you have to co-operate, to get ahead.

Knock Twice – can stories can point the way to a sustainable future?

It feels like a good time to launch a book of modern folk tales that are entertaining, surprising and troubling. And not just because it’s Hallowe’en.

Knock Twice is a collection of new stories. Folk tales throughout history explore the extremes of human experience and help us make sense of them. 

The image below comes from Norway, drawn by Theodor Kittelsen, born in 1857. From the folk tale hero Askeladden (Ash Lad) to the water sprite Nokken, stories were a way to connect up Norwegians under the impositions of Danish rule.

These tales are far our modern times but Knock Twice continues the tradition with modern folk tales, from mobile phones to the refugee crisis, celebrity, climate change and banking. 

I have contributed one story, drawing on tales I have picked up on my travels in the world of co-operative enterprise. And that’s what makes the book interesting is that the other authors too come from a range of settings on the frontiers of sustainabilty and social change – including leading authorities on the earth sciences, the environment, finance and economics.

Philip Pullman has commented, on the first collection in this series, There was a Knock at the Door, that “stories are one of the most ancient and most effective ways of making sense of the world… When we try to live a good life in a world we seem to be simultaneously destroying, there is nothing more valuable or worth encouraging.

Knock Twice is curated by Andrew Simms, author of Cancel the Apocalypse and co-founder of the co-operative think tank the New Weather Institute

The book is published by the Real Press, as a paperback, an ebook and a Kindle edition.

Are you ever bewildered by the modern world and the prospects for a sustainable future? These are modern folk tales for troubling times because we’re unlikely to get a better world without using our imagination. 

Knock twice, open the covers and see what happens…

Is this the happiest co-op video ever?

We have been running a series of short videos of inspiring stories of co-ops in the UK, with backing from the Co-operative Bank. The first was Leeds Bread Co-op, which was a wonderful introduction to worker co-operatives.

Now, our short video turned to Bristol, filmed by Blake House Co-op, itself an enterprise which has benefited from business advice via The Hive. 

The subject is Bristol Wood Recycling. This is surely the most sunny and happy co-op video ever. So far, we have had 1,800 shares and an astonishing 200,000 views via Facebook. 


For great communications, there is nothing like a good story. And when it comes to people, it seems there is nothing like a co-op story.

The co-operative sector in Norway

I have had the pleasure to visit the co-operative sector in Norway in recent days, courtesy of the Norwegian Co-operative Centre, Samvirke Senteret. The Centre was founded in 2008 by seven of the largest co-operative organisations and now has 32 members with 87,000 employees and close to £15 bn of turnover together.

Norway is one of those European countries that has such a strong co-operative presence that it is first taken for read, then taken for granted and finally simply overlooked. Denmark, Austria and perhaps Ireland are in the same club. The data on the sector as a result is partial, but still wonderfully impressive – 9,000 – 10,000 co-operatives across the country as a minimum, possibly thousands more across the housing sector.

The most established sectors are retail, agriculture – including forestry and fishing – and housing. Younger sectors include energy, water, transport and kindergartens. The Co-operative of the Year is a car sharing co-op I was pleased to meet. “We have not made anybody very rich, but we have saved a lot of people a lot of money” one of the founders commented.

I also visited a social co-operative, Respect by Aurora Verksted, selling high quality clothing and household goods, all made by members with great taste plus a variety of disabilities. Recently, they have started to source from a sister co-operative workshop in Vietnam, extending their values of positive ability and action internationally.

The retailer Coop Norway has 1.6 million member across 88 constituent local and regional co-ops, with 1,360 stores. 110 of these are hardware stores. Total turnover is around £5.5bn.

Coop Norway earlier this year released a couple of laugh out loud short videos, in which Silicon Valley geeks reinvent the idea of a store owned by the customers, a “coop”, as the latest sharing economy innovation. Instalment 1 is here and 2 here.

The Chair of Samvirke Senteret is Henning Lauridsen, from the Housing Co-op sector, which has close to one millions members with 490,000 dwellings.

Around 60,000 farmers participate in the agricultural co-ops that are members of the centre, with a turnover of £7.5 bn. One is an inspiring potato co-operative, Hoff is leading work to reduce waste and move towards the ‘circular economy’ model of a sustainable business. Owned by four thousand growers, Hoff has diversified beyond its longstanding core of potatoes for Norway’s signature alcohol, Aquavit. While the very first co-op in Norway was a dairy co-op, with 100 cows, set up in 1856 by the Royal Norwegian Society for Development (something it has had a proud track of ever since), there are stories of earlier nineteenth century distilleries for Aquavit, jointly owned but established a share companies.

The coop sector came together to win legislation in 2008. This is a general coop law, defining the form and setting a regulatory framework except where sector rules already operated. Now the Centre is exploring how to promote the model, including in new growth areas such as consultancy, arts and tourism. 

I was over to meet the Board of the Centre, to look at ways to support each other, including in a Brexit context, and to present to their annual conference on our uplifting work with members in the UK on co-operative innovation.

Artificial intelligence in a co-operative association

(Co-written with Paul Murphy, IT Programme Leader at Co-operatives UK)

All intelligent people can be stupid at times – it just depends on the context. The same is true for technology, which is why the search for artificial general intelligence – a system perhaps that can be stupid less often when the context changes – is the focus of so much interest at present.

Like many other organisations, we have been looking at where we can use automation. The shift in functions from holiday booking to sales and accounts to cloud based systems represents an extraordinary shift in organisational life. As a co-operative association, we have embraced the possibilities of digital learning, with a national platform to support new co-operatives, the Hive, with digital resources, diagnostic tools and advice communities, funded by the Co-operative Bank. All this is in line with our mission to promote, develop and unite co-operative enterprise.

Machine learning is another area of promise. As characterised by Martin Ford, author of the Rise of the Robots, this is where “a computer churns through data and, in effect, writes its own program based on the statistical relationships it discovers.”

The organisation, founded in 1869, has always collected data from its members, in order to publish statistics on the sector, for benchmarking and to allow our members to tell their shared story as a different kind of business. What intrigued us was whether we could use artificial intelligence to learn from the data that we have.

In particular, when things fail in a co-operative, it is bad news all round, because so many people are both co-owners and have an emotional stake in the enterprise. Could we use the data that we have to spot the early warning signs in a way that supports early action?

We drew on recent work using two core techniques:

  • Neurocomputing is inspired by the working and structure of the animal brain and has prompted the development of neural networks that allow machines to learn in a somewhat similar way.
  • Evolutionary computation is another bio-inspired technology whereby algorithms are iteratively adapted through processes based on natural selection and evolution.

Neurocomputing has had success in developing AI products that are now widely in use. In computer vision, neural networks can perform highly accurate image recognition and are being used in robotics, online mapping, and autonomous vehicles. Experimental applications include their use in medical diagnoses, where researchers believe they can be used to analyse radiographs, CT and MRI scans with much greater accuracy than traditional techniques, and drug companies are experimenting with neural networks to process 3D images of molecules with the aim of identifying new drugs.

Natural language processing is another area of use of neural networks. ‘Chatbots’ are aimed at automating customer service interactions, and products such as Google Now, Amazon Alexa and Apple Siri, which are built into common consumer electronics, such as smart phones and smart speakers, are using neural networks to provide a voice user interface and language translation.  Voice recognition has been common since the mid 1990’s but the addition of neural networks has allowed a radical improvement in the accuracy and usability of the technology.

In economics, over the past 20 years or so this new field of study has offered a powerful critique of neoclassical economics and its various assumptions.  Leading thinkers like Brian Arthur, Paul Ormerod, Eric Beinhocker and Doyne Farma have all pointed to radically new ways of framing how economies work. As Manfred Max-Neef described it years ago, we might dub this ‘Real-Life Economics’.

Our pilot study was to create and train a population of neural networks. Using the familiar evolutionary principles of reproduction, mutation and selection, the population was evolved through several generations to produce a network that performed significantly better than any member of the original population.

For those interested in the comparison with biological systems, the chart below, drawn by Karlijn Willems, compares the two:

Biological Neuron

So we trained the network using a selection of historical time-series economic data on the UK co-operative sector. We then tested the results with the purpose of predicting those organisations that were at high risk of financial difficulty or failure.

Using the historic data, we could see that the accuracy of prediction increased from 35.60% – being stupid most of the time – to 51.45% – being intelligent more often than not.

The predictions we generated can be used to guide our contact and offers of support for members. Often in a co-operative, preventative work can make a difference. If there is not enough income, there is not enough income, but if the underlying reason is one that can be addressed, such as the quality of governance or the capital structure, then the advice we offer can make a real difference.

We have made big strides in the use of open data for the co-operative sector and as a recent UK Government review on AI puts it “more open data in more sectors is more data to use with AI to address challenges in those sectors, increasing the scope for innovation.”

The downside was the astonishing drain on computing power that was required to run the analysis. We had to use a very high specification cloud computing instance to run this and even that took over two weeks.

When the computing finishes though, we then face the human challenge. How do we talk to our members about a prediction that they will fail as a business within one to two years?

You might think these things should not be a surprise. Tacit knowledge should always add weight and insight that formal systems won’t capture – which is why some of the interesting work on complexity systems at the London School of Economics by Professor Eve Mitleton-Kelly brings in stakeholders and focuses on an enabling environment to resolve specific challenges. This is the more participative and applied end of a field often accused of producing ‘black box’ solutions. This is where you are told the answer but have no idea why it is the answer (the Watson super-computing system developed by IBM takes this challenge on – how to reconcile complexity and transparency). An unhappy outcome for an individual co-op would be that a prediction of failure that is stupid (wrong) triggers a closure as a result.

Thirty years ago, John Butler, a legendary ex-colleague from Co-operatives UK (then the Co-operative Union) went to Clydebank to visit the local, fiercely independent consumer co-operative. Armed with statistics, John argued that the co-op was sure to fail and would need to transfer its engagements to another larger co-op in order to survive. He was sent away with a flea in his ear, the co-op turned itself around without outside help and for thirty years, Clydebank Co-operative has refused to rejoin Co-operatives UK. It was a lesson.

When you think you are genuinely being intelligent… now that‘s when stupidity is most likely to catch you unawares.

 

 

 

 

 

Who are the top membership networks in the UK?

We have updated our stats on the leading membership networks in the UK. Political parties are making a comeback – who would have predicted that? Trade unions down a little further. 

What stands out are the cooperative and mutual sectors, particularly when you consider that so many sports clubs are probably run on a de facto mutual basis, with one member, one vote.
Here are the top seven membership networks in the UK, which I shared this morning at a conference of mutual insurers. I have blogged on this before when we first compiled a list, arguing that the UK is a nation of members

There is no definitive compendium on this, so if you have any additions that we missed, let us know! 

Nicely, the Co-op Group now publishes an online ticker, open data, of its own membership total: 4.6 million and rising.