4 Facts About The Amazing Finnish Cooperative Sector

28th April 2019
by Leo Sammallahti
Marketing Officer, Coop Exchange

Brief Look At The Past And The Present

Cooperatives first arrived in Finland in the late 19th century, during a period when Finland was still colonized by Russia. The very first cooperatives were agricultural cooperatives consisting mostly of small farmers. This was seen as a way to build a counter economy of mutual self help, owned and governed by ordinary Finns as opposed to the Swedish and Russian elites that largely dominated the economy.

The movement continued to gradually increase its role in the economy, even when faced with the challenges of urbanization and globalization, that many economists claimed would mean the end of the cooperative business model. Finland's economy is now regarded as the most co-operative in the world, with 84% of the population having membership in at least one co-operative and 56% in at least two.

The largest retailer in the country, which is also the largest private employer, is the co-operative HOK Elanto. It operates in various different fields ranging from grocery stores, coffee shops, gas stations and hotels.

The most popular Finnish bank is also a cooperative, the OP Financial Group. Unlike cooperative banks in many other countries, OP has strenghtened its cooperative nature. This has included buying the largest insurance company in the country and turning it from a shareholder company into a mutual. The banks Helsinki branch has also been transformed from a shareholder bank into a cooperative with a 10 member board elected on 1-member-1-vote basis, with the requirement to stand in the election including only signatures from 3 other members.

Cooperatives Spearheading Finnish Innovation

When Nokia started to decline after 14 years of global market leadership in mobile manufacturing, some of its former employees set up A. Vipunen, a cooperative of inventors. The growth of membership surprised the founders, who were expecting the cooperative to have little appeal outside former Nokia people, but soon found membership applications coming from a broad range of people. It now has over 160 inventors, whom it helps to develop and commercialize the inventions. It's based in the north of the country, and has had a statistically significiant effect on increasing the number of patents in the region. Other similar inventor cooperatives have also been set up in other parts of the country.

Co-operatives have had a key role in the history of Finnish innovations, as the two images below demonstrate:









Cooperatives Spearheading Environmental Sustainability

Cooperatives have a key role to play in the energy transformation required to stop the ongoing ecological Armageddon. Perhaps more than in any other country, in Finland the cooperative sector plays a key role in this regard, as the two images below demonstrate:









The Future

One of the new ways in which cooperatives have been used in Finland is through "student cooperatives", where students are taught in entrepreneurship by having them form, run and develop cooperatives for marketing their skills. It has proved to be very successful, with the method increasing the likelihood of students becoming entrepreneurs once they graduate compared to other educational methods. The model has been exported to numerous other European countries.

Finland has the potential to become the world capital of platform cooperativism, as its economy is one of the most cooperative and digitally advanced in the world. I am involved in setting up a group that seeks to advance platform cooperativism within the central organization of Finnish cooperatives, Pellervo. The work is still in a very early phase, but I will be posting an article later this year about it, so stay tuned!

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