An old-time business model could help bring new economic development to rural Alberta, according to University of Alberta research.
Local co-operatives — a common way of doing business in rural areas 100 years ago — still have some potential to create or preserve business and jobs in small communities, suggests a new report from the Alberta Centre for Sustainable Rural Communities (ACSRC) at Augustana Campus.
"There's an untapped opportunity for different kinds of co-ops to play more meaningful economic roles in smaller communities," says Clark Banack, director of the ACSRC and lead author of the report.
"The co-op model isn't going to solve all of the economic issues that rural Alberta communities face, but it should at least be part of the conversation when people are talking about how to address a particular need," he adds. "Co-ops aren't always going to be the fit, but sometimes they will be."
To get an idea of which modern-day co-op models, along with their best practices and supports, are proving successful around the world, Banack and his research team reviewed findings from academic studies focused on local co-ops and rural economic development across Canada, the United States, Europe, Australia and New Zealand.
Closer to home, they also interviewed organizers and members of existing Alberta-based co-operatives including Westlock Terminals, Battle River Railway, the Peace Energy Cooperative, Bow Valley Green Energy Cooperative, EQUS, The Gathering Place and the Vermilion Opportunity Development Co-op.
Case studies of each co-operative revealed that they've all helped keep money in their communities, boosted local jobs, added to the tax base and provided opportunities for business skills upgrading in leadership, management, accounting and negotiation, Banack notes.
"In these communities where people can see a successful co-op model, it shows what community collaboration can do and how resilience can be added into rural communities. Even by adding three or four jobs, that can mean more families moving into or staying in a community, which could keep a health clinic or a school open."
A good fit for rural Alberta
The successful local co-ops reflect three general types identified in the report as being the best fit for rural Alberta, he adds.
"They have a proven track record here, and they tend to fit well into the economic and cultural realities of rural communities."
The first type, known as new generation agricultural co-ops, is a hybrid designed to allow co-operatively owned agricultural businesses to raise higher levels of capital at the beginning of their venture, usually to invest in some type of value-added processing. The co-op sells multiple versions of shares, including for basic membership and for 'delivery shares' required for farmers to use the services of the co-op. Shares are also sold to general investors who wouldn't use the co-op services but would expect returns.
The second model, classed as community investment or opportunity development co-operatives, invites co-op members to invest in local businesses that need capital to get started. The model then provides modest returns to the investors while supporting growth of small businesses.
The third model the researchers looked at was renewable energy co-operatives. These collectively owned organizations provide cost savings and investment returns for their members while working to transition to sustainable energy.
