The Future of Cooperatives & Social Purpose Organisations (SPOs)

Did you know that cooperatives?enable connections and creates a network of people unified through a common goal where society benefits? This connection fosters a good relationship among the members of the community.

But what are cooperatives exactly?

Cooperatives are value-based enterprises that put people, rather than just the pursuit of profit, at the centre of their operations. Cooperatives, at times are structured as social enterprises, encourage participation, broadens ownership and fosters empowerment for the community. Many governments see cooperatives as a crucial vehicle, along with the public and private sector, to drive and boost economic development and growth.

The Covid-19 pandemic has had a global socioeconomic impact on all human affairs, both at the individual and aggregate level. Majority of cooperatives in countries like Malaysia, have undoubtedly been impacted by the crisis: turnovers were lower than normal and temporary unemployment schemes had to be put in place. However, the impact varied based on the sector in which the cooperative operates, with the tourism, transport and culture sectors being among the most harshly hit.

Recently, we noted that a lot of cooperatives asked for moratoria on loans, saw a decrease in sales of both services and products, faced cash flow issues, had a significant reduction of activities due to the restrictions on movement put in place under the lockdowns and loss of income in line with these restrictions.

So what can be done?

We believe that a 3-step approach is necessary to address these aforementioned issues. The use of natural language expert systems to interpret data and provide financial health check is one step to gauge the severity of situations faced by each of the many thousands of cooperatives. The second is to automate the customised roadmap for intervention measures to be carried out; and the third, is to inject Digital AI assets into cooperatives to enhance their existing socioeconomic model and diversify their income sources and reduce costs.

The Positive Impact of AI for Cooperatives

The potential uses of AI to identify patterns, learn from experience, and find novel solutions to new challenges continue to grow, as increasing investments will bring new AI technology advances to corporations and consumers. Further to that, AI is impacting many different sectors of the global economy and society in a very positive way.

For cooperatives, most AI technologies have at least one of seven functions that are applicable for their operations: monitoring; discovering; predicting; interpreting; interacting with the physical environment; interacting with humans; and interacting with machines, and this typology may be used to compare and establish the many different uses of AI, though applications may rely on more than one of these functions in a complementary or interdependent way.

AI can lead cooperatives to make better and faster businesses decisions, enhance productivity, drive economy value and create innovation to be applied on new products and services the same way it can generate social value. Many applications already use AI technologies with different algorithms enabling everything from smartphone apps that help consumers with their shopping preferences, to speeding up the time and process of discovering new medical exams.

For regulators, they need to deploy AI technologies to stay ahead of the IR4.0 curve. They need to help cooperatives strengthen their governance, optimise their risk-return capital structure and achieve foresight to be relevant - beyond playing just a compliance role.

Check out this link for transforming cooperatives