Australian co-operative and mutual businesses have outperformed their ASX listed counterparts in 2019, according to new research by the Business Council of Co-operatives and Mutuals (BCCM).
In its seventh edition, the National Mutual Economy (NME) Report shows that in 2019, the top 100 CMEs had a turnover of AU$33.9bn, an increase of 6.3% on the previous year – in spite of a slowing Australian economy across the reporting period. The report is produced by the BCCM in collaboration with the University of Western Australia.
The majority of firms in the top 100 come from the financial services sector (40), health insurance (17) and agriculture (11). Other sectors represented in the top 100 include retail (6), mobility services (6), purchasing (4), wholesale (3), and health (3) and medical services (3).
BCCM says this year’s NME Report should be read alongside the Leading the Resilience report, which features qualitative research on the CME sector response to bushfires and Covid-19.
“While we are now operating on a very different playing field than when the data was recorded, read in tandem with Leading the Resilience, our report into CME resilience through the pandemic, there is a compelling story here about what the future of our economy could look like,” said BCCM CEO Melina Morrison.
“The data in the report makes clear the scale, breadth and strength of the CME economy. Historically, CMEs thrive where they are planted – creating entire ecosystems around them, generating long-term jobs and prosperity for their supply chains, other local businesses and their communities.
“The implications for those regions hit hardest by both the pandemic and the weather crises of recent years are profound. In the face of de-urbanisation as a result of changing work practices, our regional communities can expect significant changes in the years ahead. CMEs offer a way to build up regionally based businesses in parallel.”
She added: “The NME Report shows that, in almost every industry, CMEs are making their presence felt, competing with large, shareholder-owned organisations, engaging in global markets while keeping their economic value local. In the long shadow of Covid-19, I think it is worth considering whether orthodoxy in our businesses and in our economy is going to lead us back into the sunlight.”
Leading the Resilience highlights that in Australia, the average age of an ASX top 50 firm is 65 years. By comparison, the average age of a top 50 Australian CME is 82 years, a full 17 years and 25% longer. It also points out that CMEs have relied on their own savings to get through the crisis, using historic earnings to support employment rather than taxpayer funds.
CMEs have also been able to maintain jobs, retaining employees through redeployment, rather than implementing mass lay-offs, argues the report. To help members, customers and staff cope with the turbulence caused by Covid-19 by implementing a series of mental health strategies.
“Leading the Resilience is a fascinating look at the experiences of co-operatives and mutuals through the challenges of Covid-19, informed by interviews with CEOs of leading firms across the CME sector,” said Ms Morrison.
“CMEs combine the strengths of small businesses and individuals focused on shared issues with the reach of much larger businesses to deliver coordinated responses to local and global challenges. With a focus on sustainability and the long term, 2020 has demonstrated why CMEs are the resilient backbone of the Australian economy.
Read the two reports here.