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Economic Promotion

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  • Cooperatives, Communities of Hope

  • SMG 2131

    [A Story of the Warmhearted Citizens of Seoul]

    • Diverse types of world cooperatives
    • Aiming to create cooperatives more developed than private corporations
    • Top five cooperatives in Seoul
    • * Housing Cooperative, working together to resolve the city’s housing problems
      * Medical and Welfare Cooperative Association, preventing and treating disease together
      * Animal Hospital Cooperative, established through the cooperation of humans and animals
      * Coop Taxi, striving to improve workplace environments
      * Local Bakery Coop, small stores joining forces

    • Warmhearted people coming together to usher in an era of 10,000 cooperatives!

    The FC Barcelona soccer team is actually a cooperative

    Many people may be surprised to find out that the well-known soccer team FC Barcelona is actually a citizens’ club operated as a cooperative.

    FC Barcelona soccer team

     

    Major decisions of the club are made by the 190,000 cooperative members, called “Socio,” who paid the registration fee of EUR 150 (equivalent to about KRW 210,000) and serve for two-year terms. Anyone over 18 years old who has been a member for more than one year is permitted to participate in the general assembly and express his or her opinions regarding major decisions of the club. The chairperson, club owner, and board of directors are elected at the general assembly. This differs considerably from other soccer clubs, whose chairpersons are usually appointed by the owners of large corporations.

    Another example, Sunkist of the United States is widely known as an agricultural cooperative formed by 6,000 orange growers in California and Arizona against the tyranny of wholesalers. Also, the Associated Press was established by 1,400 newspaper companies in the United States participating as members, allowing them to share the costs of creating and transferring articles.

    Seoul Metropolitan Government (SMG) strives to establish cooperatives more developed than private corporations!

    What is the difference between a cooperative and a general corporation?
    A cooperative is an economic organization created by economically underprivileged and socially marginalized citizens as a means of sharing their aspirations and working together to improve their circumstances and satisfy their needs on their own. As an organization jointly operated based on the investments of consumers, small businesses, and small producers, a cooperative aims to improve the services it offers its members. This differs from a corporation, which seeks to maximize profits for unspecified shareholders. This is why the corporate resolution structure is one vote per share, whereas for a cooperative, it is one vote per person regardless of members’ individual investment amounts.

    Warmhearted people of Seoul: ① Min Snail Housing Cooperative

    As of February 2016, there are 2,371 cooperatives and cooperative associations in Seoul.

    Many cooperatives are being established to provide services in various areas of Seoul citizens’ daily lives, including child care, education, cafés, art, distribution and services. Among them, the Min Snail Housing Cooperative is one of the greatest successes.

    The Min Snail Housing Cooperative started in 2011 with a group of students working at the Min Snail Union, a non-profit organization that seeks to address the issue of the lack of dormitory facilities at universities. The housing cooperative was established in order to help resolve the difficulties faced by university students, youths, and artists who are struggling with financial difficulties and living in poor environments. Established in 2014, the housing cooperative established its first “Snail House” in Namgajwa-dong, Seodaemun-gu.

    The Snail House, operated by the Min Snail Housing Cooperative, is rented under long-term rental agreements using the investment of cooperative members and the youth housing fund and social investment fund of the city government, and re-rented to cooperative members. The monthly rent is set within the range of KRW 200,000 to KRW 330,000, which is 50 to 80 percent of the going rate.

    Currently, six Snail Houses are being operated in Seoul, accommodating a total of 51 youths.
    The members living here have not only secured decent housing at a reasonable price, but also engage in various activities, including housing policy proposals, youth housing counselor training, youth housing fundraising, housing surveys, and public housing coordinator tasks.

    Inside of Snail House Housing cooperative (Min Snail Housing Cooperative)

     

    Warmhearted people of Seoul ② Walking Together Medical Welfare and Social Cooperative

    In Seoul, numerous types of medical service cooperatives have been established, including Oriental medical clinics, dental clinics, long-term home care centers, and day care centers for people with disabilities. The cooperatives also operate hospitals and hire medical doctors directly in order to overcome the problems of information imbalance and medical service quality degradation that plague other existing hospitals.

    Members of these cooperatives, especially people with disabilities, have established medical institutions that serve all citizens with the goals of promoting proper health care and preventing and treating diseases based on the expertise of professionals.

    Walking Together Oriental Medical Clinic
    (Walking Together Medical Welfare and Social Cooperative)
    Healthy Town Dental Clinic
    (Walking Together Medical Welfare and Social Cooperative)

     

    Of these cooperatives, the Healthy Town Dental Clinic, established by the citizens of Seongdong-gu, is particularly noteworthy. Another example, although it is not a general hospital, is the Healthy Medical Welfare and Social Cooperative (which we will call the “Cooperative” here, led by Chief Director Lee Kwang-su), which was established by doctors and members of the local community who care about the health and wellbeing of their fellow neighbors.

    The Cooperative was established to provide high quality dental treatment, which is a major financial burden for many people, at reasonable prices. It even welcomes non-residents of Seongdong-gu to join as members, as long as they pay a membership fee of KRW 50,000 per person. Once becoming a member, they enjoy low-cost medical treatment, receive financial and business reports, and hold decision-making rights at one vote per member.

    Currently, the Cooperative has 710 members, and donates its profits toward the development of the Cooperative and provision of public dental care for the disadvantaged, including low-income groups and people with disabilities.

    Gaining strength by working together! ① Coop Taxi

    There are many things that can be done only with the help of others. In this case, we are not talking about small-scale local community activities, but initiatives that contribute to the local economy as a whole. For example, Coop Taxi is a taxi company that currently has about 200 yellow taxis crisscrossing the entire city of Seoul. However, this company is not controlled by a president; it is the taxi drivers themselves who are in charge.

    Since the taxi drivers are the owners of the cooperative, they are able to make improvements to their working environment and employment conditions and provide higher quality services to taxi users. In addition, the salary of the cooperative members is increased by KRW 500,000 higher than that of other taxi drivers, and there have been very few accidents. Members hand over all of their daily earnings to the cooperative, and all profits, excluding expenses, are distributed equally to all members.

    In addition, each member receives a welfare card with a value of KRW 500,000, and all accident-related costs are fully covered by cooperative insurance.
    With the success of Coop Taxi and its excellent treatment of its drivers, other taxi companies have been taking steps to improve working conditions for their drivers as well, such as reducing the share of daily earnings the drivers have to turn over to the company, in order to prevent their drivers from leaving. Based on the success of Coop Taxi in Seoul, the model is now being tested in other areas as well, including Pohang.

    Gaining strength by working together! ② Local Bakery Coop

    Recently, the owners of small shops in Seoul have started coming together to establish cooperatives. One of the most representative cases of this is the cooperative established by local bakeries, which have been struggling to compete with large corporations. Now, however, they have overcome many of their difficulties through the benefits of their cooperation, including co-branding, group purchasing, joint development of products, and sharing of knowhow and expertise.

    Bakery cooperative (Local Bakery Coop) Inside of the Local Bakery Coop

     

    As a result, in January 2014, the bakeries opened a factory in Sinsa-dong, Eunpyeong-gu, with a capital investment of about KRW 600 million, comprised of KRW 30 million from each member and KRW 220 million in funding support from the Small Enterprise and Market Service. With this investment, they were able to set up an office and establish joint production facilities featuring a proper sanitary system and expensive equipment, such as a yeast incubator. In addition, they were able to produce a wider variety of bread and benefited from increased revenues, which was made possible by sharing their customer databases and operating a reward points program among 11 bakeries.

    The era of 10,000 cooperatives! Anything is possible when working with SMG.

    Since November 2012, SMG has been operating the Seoul Coop Support Center in order to help establish and operate such cooperatives. The center provides basic training, advice, and booklets, as well as consultations on the establishment and operation of cooperatives. As of 2015, the center has provided more than 30,000 consultations and basic training for about 5,000 citizens. In addition, the center finds and promotes successful cases of cooperatives by providing extensive direct support.

    There is a very simple reason as to why SMG is providing such direct support. It is because cooperatives have great potential to contribute to the revival of local economies and even help overcome the national economic crisis. Recognizing this potential, SMG will make its best efforts to help establish and operate cooperatives properly by informing all citizens of the value of cooperatives.