As we move cooperation into the 21st

Century, the United States is experiencing

an explosion in the cooperative sector.

Each year millions of people across our

nation are choosing to control more of

their lives by joining cooperatives.

Our goal at NCBA is to make cooperative

enterprise a strong, distinct and unified

sector of our economy that is recognized

by the U.S. public. Today, in the U.S.,

most people believe that we have only

three sectors of the economy: the for-profit

sector dominated by investor-owned

businesses; the government sector

including local, state and federal governments; and the

non-profit sector with organizations like the Red Cross,

universities and religious institutions. At NCBA, we see a

fourth sector of the U. S. economy that is based on a

foundation of cooperative principles and values. To

accomplish our goal of a strong fourth sector of the

economy, NCBA is focused on our mission to develop,

advance and protect cooperative enterprise. We know

that U.S. cooperatives must be strong businesses that

focus on providing new services to members and on

developing new cooperative businesses.

Even though cooperative membership includes large

numbers of people, we are still only a small part of the

U.S. economy. Existing cooperatives are growing rapidly

throughout the U.S. by adding value to membership

through new services. For example, during the past five

years, U. S. credit union membership grew from 60 million

to76 million people. The growth of credit union

membership is verified by public opinion surveys showing

that 70 percent of consumers believe credit unions provide

better service at a fairer price than do for-profit banks.

While existing cooperative membership is growing by

The Cooperative Sector: A powerful economic force

expanding services, the growth of new

businesses in the U.S. cooperative sector is

even more spectacular. One of the most

innovative new cooperatives in the U.S. is

located in New York City. There the

members of cooperative housing have

expanded the value of membership by

organizing 1st Rochdale Cooperative. This

new consumer-owned cooperative has

partnered with existing electric cooperatives

to provide electricity, telecommunications,

energy audits and fuel oil.

This explosion of growth in the cooperative

sector of the economy has occurred as a

reaction to the economic changes in our global economy.

The NCBA Board of Directors believes that to be reactive

to these economic forces is not in the best interest of our

cooperative membership. To achieve our goal of

becoming a strong fourth sector of the economy and to

organize even more cooperatives, NCBA has proactively

joined nine other cooperative development organizations

in the U.S., to restructure our programs and create

CooperationWorks. CooperationWorks is a unified system

of cooperative development centers and development

partners, cultivating cooperation as a cornerstone of

prosperous, sustainable communities.

To become the fourth sector of the economy, we must

advance the cooperative form of business enterprise.

NCBA’s programs are designed to give our members the

resources to advance their cooperative to a higher level.

For example, the Tucson Cooperative Warehouse (TCW)

was the first NCBA member to utilize Co-op 101, a new

educational resource designed to educate the employees

of cooperatives about the value of cooperatives.

NCBA’s programs are focused on advancing cooperatives in

the U.S. and around the world. We are now considering

public policy initiatives that would make

recommendations on the appropriate role for the federal

government in domestic and international cooperative

development. NCBA’s work on Capitol Hill is vitally

important in advancing the cooperative sector of the

economy. As the fourth sector of the economy,

cooperatives need different laws and regulations to help

our members achieve their economic and social goals.

Over the past several years, NCBA has successfully

protected the cooperative sector of the economy by

working with our members to fight off attacks on Capitol

Hill. But today a new threat to cooperatives is present.

The advent of e-business and the growth of in-group

purchasing organizations has led to an increase in the

number of businesses calling themselves cooperatives

when in fact they aren’t. NCBA has initiated a program

to stop this problem. The cooperative sector will not be

successful if there are false cooperatives misleading the

American people.

The reason that over 120 million Americans are members

of cooperatives is the trust that cooperatives have built

over a long history of helping people achieve their

economic goals and improve their lives. Cooperatives have

empowered millions of people throughout the world to

take more control of their lives. And, we have given

economic power to people over the past 155 years, from

those first Pioneers of Rochdale, to the newest member of

1st Rochdale Cooperative in New York City.

In the new millennium, we must look for new ways to

provide service to our members. By working together, we

can achieve our goal of a strong and unified cooperative

sector of the economy.

Paul Hazen, President and CEO

I believe that one of the greatest benefits that NCBA provides our

member cooperatives is to engage more fully in the global economy.

NCBA’s programs are designed to provide our members with new business

opportunities in the U.S. and around the world. With over 800 million

cooperative members worldwide, the cooperative sector can play an

increasingly important role in our global economy.

Globalization is affecting all cooperatives. In any U.S. small town or big

city, financial markets around the world can impact the cost of money.

Prices cooperatives charge their members can be affected by political

struggles in another country, the price of oil in the Middle East or new

technology developed by a dot com company located in your neighbor’s


Today it seems that half the world is focused on using new technology

and modernization to compete in the global economy. The other half is mired in the

past — buying and selling the same old products. Cooperatives, also, are on either

side of this divide. Some NCBA members, like my own company Nationwide, have a

global strategy. A part of our strategy is to form joint ventures with organizations in

other countries for the distribution of products. Another example is Recreational

Equipment, Inc. (REI). With 2 million members worldwide, REI is not only a leader in

electronic commerce but also is opening retail stores in new markets such as Japan.

But this global focus on modernization and technology is not apparent in all


There are cooperatives fighting with their competitors over shrinking markets and

supporting a highly regulated economy that protects the status quo. They are quite

confident that by standing still they can be an alternative to other types of businesses.

But, in a global economy, our businesses must be innovative or a competitor half way

around the world will eat our lunch. New York Times reporter Thomas L.

Friedman in his book, The Lexus and Olive Tree, makes a compelling case

for modernization and technology in order to thrive in the global market.

NCBA is well positioned to help our members in the global economy.

Every cooperative in the U.S. should be using NCBA in their global

strategy. The NCBA international cooperative development program can

offer cooperatives access to markets in developing countries. For

example, Cooperative Resources International (CRI), a NCBA member, is

providing its products and services to farmers in Nicaragua through a

NCBA development program. CRI’s strategy is to use this activity to

expand markets throughout Latin America.

Just as important is NCBA leadership in the International Cooperative

Alliance (ICA). Through ICA, NCBA has developed valuable relationships

for our members with cooperatives around the world. Without NCBA and ICA, new

business opportunities would be much more difficult.

In 1984, NCBA incorporated Cooperative Business International to help our members

expand their trade and business opportunities. Through the investment of six NCBA

member organizations, CBI has grown rapidly and provides cooperatives with a

valuable resource for the future.

In the future, NCBA will continue to focus our programs on those that help

cooperatives expand their business globally. Join with us as we help cooperatives

succeed in this millennium’s global economy.

David O. Miller, NCBA Chair

NCBA 1999 Annual Report

Global opportunities for the Cooperative Sector

NCBA 1999 Annual Report

David Miller

Paul Hazen