Debate: Co-ops and the rise of big data

As the rise of big data continues to transform the business landscape, it presents the co-op movement, with an untapped resource in the shape of a mountain of member information – but also a series of ethical issues.

These boil down to the question of who should actually own the data, which becomes even more pressing in the case of member-owned organisations like co-ops. And the subject came under discussion during a session at the Global Conference of the International Co-operative Alliance in Kuala Lumpur.

One example of how the co-op movement is rising to the opportunities and challenges of online information is Swiss co-op MIDATA, which offers members a platform to store their data. Its current focus is on health – an area of particular ethical concern when it comes to privacy.

Vice president Doris Albisser told the conference session that MIDATA is “citizen-owned and controlled, not for profit, open source, transparent, secure; only account holders have access to the platform and can see who has accessed their data.”

The data is used for  science projects, she said, with participants’ consent. “We don’t allow data used for research to be sold,” she said. “The long-term goal is to use data to personalise medicine. The patient controls the data.”

Equally sensitive is financial data. Jimmy Lin, manager of software engineering data services at Schools First Credit Union in the USA, discussed the balance of responsibility and opportunity that consumer banking data brings.

“We’re working to understand the data trail to make members’ lives better,” he said. “We were able to use it to work out which members had been worst affected by the recent natural disasters in the USA – forest fires, the storms and floods – and reach out to them. But we are also working out firewalls and permissions to prevent breaches.”

He added: “We’re not allowed to share data with a third party. The question is what do we use it for? We want to understand who our members are better so their financial situation is better.

“We like to say we treat the members’ data like we treat the members themselves.”

New tech comes to agriculture

Big data is by now an established force in health and finance but it is now beginning to make itself felt in agriculture.

Andrew Crane, who recently stepped down as chief executive of Australian grain storage and marketing co-op CBH, said: “Agriculture is one of last industries to get teched. It’s a physical product – how do we digitise that? But there is scope with use of data to help farmers make a return.”

Dr Crane said co-ops have a role to play in championing the rights of members when it comes to their data. For instance, this date can ensure transparency on input pricing, helping smaller farmers find out if their price is competitive or not.

“Who owns the data?” he asked. “Modern farm equipment captures a huge yield of data as it harvests crops. Who owns that?

“Machine makers in the US say the data the machine gather belongs to them, not the farmers. We say it’s the farmers.”

He said the task now is to work out how to obtain that data for farmers, perhaps by getting a tool to extract the data to buy on a statewide basis, or creating a farmer business network to “share data that farmers have already paid for”.

He added: “Storage systems have data of what grain is available, what is high and low in supply. We’re under pressure to release this but it belongs to our members. Online quality data means that farmers can extract value, rather than traders.”

Dr Crane said the data on the shipping and blending of grain can connect big grain buyers in China with his farmer members.

He added: “The new middle class want to know the origin of  their food – food counterfeiting is an issue. How do we demonstrate the clean, green origin, of safe food? We need to control data and bring power back to our members.”

But there are other difficulties, he warned. “The interests of members might diverge from those of the  co-op. For instance, we buy grain from members and make a profit. We return that profit to the members as a discount to handling fees.

“But we are now handing that data over to members so they can deal with the buyers directly. This is good for members but not necessarily good for our co-op.”

Bob Yuill, deputy chief executive of the Scottish Agricultural Organisation Society, said: “In the last two or three years we’ve been building up a picture ourselves of the ownership of data… Ownership of date is what gives you a competitive edge.”

He said “huge processes” were required to ensure access to data, the visibility of data to people who use it, and the accuracy of systems that maintain it. It is also important to “understand how you do that in co-op context,” he added. “Our values are key to this.”

Mr Yuill added: “Membership loyalty in a co-op is demonstrated in ownership and understanding the strategy of that co-op. Accurate data from members allows us to drive strategy. Ownership of strategy matters – at the moment we are giving data away to large corporates.”

He said there was an important learning process for co-ops when it comes to data.

“We need education to make sure we don’t pass on data that takes value from members. It’s a question at board level of how we deal with these issues when things are changing so fast.”

New ways of building trust

Looking ahead, big data is part of an information revolution that is creating new ways of working. Taynaah Reis, chief executive of Moeda, a Brazilian co-operative crypto-bank, told the session her organisation was creating “an internet of trust”.

“We are working on a circular economy, testing technology and bringing it to India and Africa. We are empowering people to access finance via blockchain technology.”

Again, the relationship between co-op and member is crucial. Ms Reis said: “It’s important we work with person providing data to know their needs, follow them, help them to grow.

“There’s a lot of unemployment in Brazil, but we’re bringing people together in co-op system where they feel safe to share information and receive guidance, and learn to make profit with a purpose. Brazil seen as a risk, but we show transparency. Investors are happier to invest; they trust us because we are sharing that information.”