TECH4GOOD
Monchito Ibrahim
Cooperatives have been an anchor in our country’s economic development. They are founded on the powerful idea that, together, a group of people can achieve goals that none of them could achieve alone. For a lot of people, cooperatives have become a way of life that help them realize their needs and aspirations. But a significant number of them, mostly the small ones, have not been able to quickly pivot to a digital model that would have allowed them to effectively serve their members during these times. The societal landscape today is changing at the speed of digital. How then should we future proof our cooperatives? Will it be a “digitize or die” situation for most of them?
A cooperative is defined by an international organization as “an autonomous association of people united voluntarily to meet their common economic, social, and cultural needs and aspirations through jointly-owned and democratically-controlled enterprises.” Globally, about a billion people are involved in cooperatives and employ at least 100 million.
The world’s largest cooperative enterprises have estimated collective revenues of US$1.6 trillion, which are comparable to the GDP of the world’s ninth largest economy – Spain. Cooperatives have also become central to the realization of UN Sustainable Development Goals.
In the Philippines, of the more than 18,000 cooperatives today, 54 percent of these are classified as micro cooperatives. The International Cooperative Alliance Asia and Pacific (ICA-AP) estimate that these cooperatives have a total of 10.7 million members representing almost 10 percent of the total population of the country, employing 580,800 direct and 1.9 million indirect employees. They also have contributed ₱3.9 billion via indirect taxes paid.
The setting up of the first cooperative in the country in 1896 is actually attributed to our national hero, Dr. Jose Rizal, during his exile in Dapitan. The first registered Philippine cooperative, however, is the College Consumers Cooperative. It was organized in 1916 by 27 faculty members, employees, and students of the UP College of Agriculture, now the UP Los Baños campus.
Top cooperatives around the world today make use of technology to engage their members in governance and decision-making and provide them with very convenient ways to do business with them. Thanks to the existence of online platforms, some of the participants in the movement are able to connect thru a digital forum.
We are now beginning to see Philippine cooperatives also following the digitalization trends but this is largely confined to the large ones only. It looks like the digitalization of local small and micro cooperatives remains a challenge that can primarily be attributed to financial capacity, lack of skills, and a low level of awareness. A recent survey shows that less than 40 percent of the respondents feel that only half of the cooperatives are ready to embrace digital transformation.
Enabling policies and partnering with the right technology platforms would be key initiatives to address the digitization gaps. The Cooperative Development Authority (CDA) recently established a special type of secondary cooperative to hasten the technological transformation of the industry. Called the Technology Service Cooperative, it is intended to support cooperatives across the country through technological innovations through e-commerce, portals, and innovative ways of bridging the gap in market access. The new cooperative, composed of at least 15 registered cooperatives, would offer technology services to members and will have to comply with the requirements of other regulatory bodies, particularly the Bangko Sentral ng Pilipinas (BSP).
The digiCOOP Technology Service Cooperative (DTSC) is the first to organize and apply for registration under this special type of cooperative. It aims to unite and serve member cooperatives in using technology to improve their revenue streams and by enabling individual members to build their own wealth, participate in a lively ecosystem and pass on the cooperative legacy to the next tech-adept generation.
Their platform would allow the digitalization of banking and finance, insurance and healthcare, e-commerce and value chain, and management and logistics systems using the latest technologies, particularly artificial intelligence and blockchain. The digiCOOP provides the easiest path for small and micro cooperatives in their digital transformation journey.
Cooperatives are often seen as a fountain of positive social capital by promoting a strong sense of community, participation, empowerment, and inclusion among its members. To sustain its relevance and effectiveness today and in the future, cooperatives must continue to strive for enhancing their viability and improving their ability to serve their members, and remain innovative and competitive enterprises. There is no available step-by-step guidebook on how cooperatives can make themselves future proof. The need to go digital will definitely be the new norm as more and more people prefer to do things online.
Many people today feel powerless to change their lives. Cooperatives present a strong and viable economic alternative for them.
(The author is the lead convenor of the Alliance for Technology Innovators for the Nation (ATIN), vice president of the Analytics Association of the Philippines, and vice president, UP System Information Technology Foundation.)