When innovating, collaboration between businesses offers a way to accelerate the journey from concept to market. Smaller businesses have the advantage of agility and readiness to take risks, but they lack scale to resource all elements of new product development.
Similarly, when bidding for larger contracts with the public sector or corporates, smaller firms can often offer more innovative solutions and excellent value for money, but may be held back without a suitably large lead partner.
There are often a number of further obstacles to collaborative working:
- Lack of experience working with other parties meaning trust needs to be built from scratch.
- No shared tools for collaboration, leading to delays and mistakes.
- Difficult to find and check dependable collaborators.
- Pressure to nominate a lead contractor that shoulders all the risk, forcing contractor/sub- contractor working relationship, rather than genuine collaboration and risk sharing.
- Dependence on contract law to frame the relationships: often unrealistic and potentially unfair for SMEs and freelancers.
These problems are felt on both supply and demand sides:
- It is hard for public sector bodies and larger corporates, seeking agile innovation and value for money when procuring products and services, to engage younger, smaller and more dynamic businesses.
- It is hard for digital-tech SMEs, micro-businesses and freelancers, that have the talents, ability and capacity to deliver components of what is needed, to secure opportunities on bigger projects.
Similar problems can arise in other sectors where there is a high demand for innovation, including health and social care, retrofit and renewables.
The solution is to bring different organisations into relationship with each other through membership of a cooperative, in which they commit to working collaboratively with each other This approach seeks to replace what would normally be a web of contractual relationships based on competing interests, with a collective agreement to work together on established and shared principles of fairness and equity based on mutual trust.
This new cooperative approach to establishing working relationships enables:
- small businesses and freelancers to work together within a constructive set of rules and protocols governing collaborative relationships, risk sharing and reward, as opposed to brittle contracts;
- collaborators to use a simple digital platform to assemble consortia quickly from known and trusted collaborators, and work with them using well-known and shared digital collaboration tools;
- members to share benefits of a common brand, contracts, accounting, insurance for the work they do through the cooperative;
- members to have equitable access to key resources that, acting alone, may be out of reach;
- public and corporate partners to have a single body to engage with.
It is cooperative because it is based on concepts at the heart of universally-accepted cooperative values and principles, including:
- Fairness: members have an equal say and are treated equitably, since no party is in a position to benefit to the detriment of others.
- Neutrality: it is a neutral way of owning and providing access to assets, for everyone’s benefit, rather than for the private benefit of some.
- Collective endeavour: members share responsibility and risk, including for management of the cooperative and the consequences of its actions.
It is a new cooperative approach because rather than bringing parties together as users/consumers, or as workers, or as producers (the three most familiar categories of cooperatives) it brings them together for any objective they wish to pursue.
The cooperative is a nexus of relationships based on shared values and enabling members to respond to a range of opportunities, such as:
- Undertaking contracts at scale and pace, including for the public sector;
- Developing new products and services in response to market needs;
- Creating and sharing brands and channels to reach markets.
The Innovation Cooperative is a robust mechanism and framework for those who genuinely want to work together collaboratively.