The Cooperative

Cooperative System: Innovative Technology from its Origin in the UK to the Modern Era

Cooperative System: Innovative Technology from its Origin in the UK to the Modern Era

Cooperatives are organizations established to help people increase their economic bargaining powers, consisting of an association of members. Cooperatives play an important role in elevating the quality of life by assisting in career development and promoting a fairer society for members.

‘Social Crisis’: the Origin of Cooperatives

Cooperative ideology began during the industrial revolution in Britain around the early 18th century. Prompted by the transition from a human work force to mechanized manufacturing, cooperatives were created in response to a huge rise in unemployment and reduction in living conditions. Rural areas were also transformed to industrial sites; agricultural communities suffered land encroachments adding to the high rate of unemployment. In addition, the mechanization on an industrial level caused small entrepreneurs less able to compete with the rise in capitalism. Local traders unable to compete contributed to a poor overall economy.

Due to the economic deterioration and devastating impact on society, certain social mechanisms were necessary to remedy the situation. This led to the idea of an association in a ‘cooperative’ format by Robert Owen, a plant manager with a poor family background. He drove the idea of establishing the Co-operative Community, known simply as a ‘cooperative’.


From Ideology to a Tangible Life Development System for the Population

Owen’s Co-operative Community was based on the efforts of a group of people, an ‘association’, to produce appliances manually without the use of machines. Properties were held in common trust or for public use to prevent exploitation between capitalists and laborers. However, Owen’s idea was initially unpopular due to the high cost and inability to merge with the religious and governmental doctrine of the time. William King, a physician, adopted cooperative ideas to amplify the movement and make associations more suitable for the social conditions. In 1827, he established a cooperative store with little initial startup cost, and invested the sale of products to help expand the business.

Over time, cooperatives began to generate more benefits for the members. Revenues were shared amongst the members. The interests of the cooperative remained materialistic and tangible, attracting common people to join the association and continue the rise in benefits. Encouraged by this, the development of cooperatives expanded to include credit unions, savings, agricultural and real estate, all adhering to the key objectives to help each other progress in terms of finance, professional development, and opportunities for accessing resources.

Adoption of Cooperatives in Thai Society

In the reign of King Rama V, Thailand was making the transition from a self-sufficient agricultural society to a more commercial society, making contact and trading with foreigners. Farmers borrowed money as capital to expand their businesses. Unfortunately, farming faces uncertain yields and were therefore exploited by ‘loan sharks’ demanding they pay high interest rates, making them unable to settle the debts that led to insolvency. The cooperative ideology was initially adopted in Thailand by Prince Bidyalongkorn who was the Director General of the Commerce and Forecast Statistics Department at that time. After investigating models of cooperatives most suitable for Thai society, he chose micro-lending, which was derived from a German model called ‘Raiffeisen’. It was first trialled in Pitsanulok province and proved to be successful.

The cooperative system has been recognized in Thailand since then, and laws on cooperative establishment were promulgated. The system has since been applied by occupational groups and institutions, including cooperative stores in schools which offer further benefits: sharing profits among members; the creation of savings cooperatives in workplaces where employees can deposit money and take up loans at fairer rates than those of larger financial institutions; or agricultural cooperatives that help Thai farmers gain better means of production, access to a body of knowledge about modern agriculture, and increased opportunities in the use of arable lands.


Features of the Cooperative in the Modern Age

Although cooperatives enable members to access the means of production and a body of knowledge, today’s technology still benefits large-scale capitalists who enjoy advantages over smaller entrepreneurs, resulting in a reduced market share. For this reason, a business innovation that combines the cooperative ideology with modern technology is now known as ‘Sprout’.

Sprout is a business platform that employs communication technology to boost the potential for small entrepreneurs, SMEs, or local people to produce more revenue growth for their business. Applying the key principle of a cooperative, it creates a helpful network ecosystem where members can help offer their products and services through an online platform to increase awareness. Moreover, Sprout applies Blockchain technology to reinforce the accuracy and the security of financial and information services, which cannot be handled alone by small entrepreneurs or local businesses. This also helps to solve business problems in many aspects such as law, transportation, work safety, technology and even overcoming difficulties in making financial transactions.

Nowadays, innovations in financial institutions have the general aim of pursuing economic benefits only. Unlike cooperatives, they do not place an emphasis on facilitating and supporting small entrepreneurs to grow sustainably and do not create networks of members to help achieve these aims. Therefore, maintaining the cooperative ideology in the modern world is key to increasing fairer business opportunities for small entrepreneurs and helps lead to a creation of a society where all people can access a body of knowledge and the new technology needed to succeed.