Tech startups and the profit of cooperatives
By Inyene Ibanga
TECHDIGEST – Humanity acknowledges that the current global realities demand creativity and innovation to address the numerous challenges confronting countries, businesses and individuals as a result of dwindling resources. The situation has further worsened with the crippling effect of the COVID-19 pandemic in all areas of human endeavour.
In fact, the health crisis is credited for spurring governments in developing countries to start exploring ways of lifting their countries out of the prevailing economic predicament through the process of working together in cooperatives to achieve mutual benefits.
It is instructive that the health crisis has been a blessing of sort because it has thrown up opportunities for stronger cooperation among countries and individuals to exchange ideas on fresh ways of doing things.
While creativity, innovation, and technological forces are engendering high-speed transformations in the business environment, they are also helping to highlight the need for adoption of the cooperative model in the tech industry.
Despite the increasing number of tech startups, many of them are barely surviving in the rapidly evolving tech ecosystem across local and international environments.
As such, the cooperative model is a revolutionary concept for equality, fairness, social justice and generally for the good of startups. It could lead to a number of startups coming together to build associations of designers, developers and sellers of digital services to stakeholders in the digital economy.
The cooperative business model is a voluntary association of persons with the common motive of protecting and promoting the welfare of weaker sections of society. These associations are active in all countries worldwide and represented in all the sectors, including agriculture, food, finance, healthcare, etc.
The International Cooperative Alliance (ICA) in the Statement on the Cooperative Identity defines the cooperative as an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
In other words, cooperatives nurture long-term visions for sustainable growth on the basis of ethics, values and principles that vest ownership, control of, and are managed by members in order for them to collectively realise their economic, social and cultural aspirations.
Invariably, tech cooperatives would comprise people-centred businesses which bring individuals together on the basis of the democratic principle of equality among all members, whether they are customers, employees or users.
While Nigeria boasts of a large number of agricultural/farmers’ cooperatives, consumer cooperatives, credit cooperatives, housing cooperatives and multipurpose cooperatives, it is yet to develop technology cooperatives.
Tech cooperatives refer to worker-owned organisations that operate in the Information Technology industry to provide software development and consulting services that enable startups to thrive in the midst of the big tech companies.
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North America, South America, Europe, Asia and Oceania are home to some of the world’s innovative tech cooperatives such as Agaric in USA, Germany and Nicaragua; Agile Collective in the UK; and Devtopia in Spain.
Others include Equality in Argentina; Sofi Cooperative in Israel; Protozoa in New Zealand; Hypernova in Italy and Happy Dev in France.
The website of Co-operative Technologists (CoTech) states that, “it aims to create a better technology sector in the UK that focuses primarily on the worker, customer and end-user needs rather than on generating private profit.”
As such, members of the network use their collective experience, skills, resources and knowledge to radically increase the market share of companies that are owned and run by their workers. They have discovered that the cooperative model creates better workplaces, better digital products and better value for customers, thereby helping more people to enjoy the benefits of this model.
Each member of a cooperative is a company that is owned and democratically run by its workers and customers. This means there are no private shareholders and profits generated are either reinvested in the enterprise or returned to the members.
The model stimulates economic, social and human capital development within the communities where they are established. It emphasises the emergence of a new option that guarantees equality for the generation of stable jobs and prosperity in the tech startup ecosystem.
It might seem a long shot before Africa embraces the tech cooperative culture that is already spreading in other continents of the world. The earlier countries on the continent take steps in this direction, the better it would be for existing tech entrepreneurs and others planning to open shop.
Blessed with a large population of young, creative minds, Nigeria stands to gain a lot by encouraging the tech-savvy segments of the society to come together and form cooperatives to allow them to take control of their economic future and enjoy the benefits of their activities.
Since cooperatives are based on the values of self-help, self-responsibility, equality, and solidarity, young talented Nigerians can find new channels of venting their creative energies therein. As founders, members would promote the virtues of honesty, openness, social responsibility and caring for others to succeed.
The tech community has nothing to lose by introducing the universally renowned principles of cooperatives into the tech sector to contribute enduring productivity, create and maintain a sustainable economy and the well-being of people who work and own these cooperatives as members.
For Nigeria, tech cooperatives would further build and increase the population of a crop of indigenous expertise and profits, empower the weak and vulnerable, create decent jobs and tackle the scourge of poverty as the workers also own and control every aspect of such enterprises for the common good of all the members.
There is no doubt that the Ministry of Communications and Digital Economy and its Science, Technology and Innovation counterpart would leverage the tech cooperative model to lead Nigeria into the new frontiers of truly democratically-run enterprises that guarantee equality and shared benefits to all the worker-owners/members of tech cooperatives.
Inyene Ibanga is Managing Editor Techdigest and writes from Wuye District, Abuja
