Cooperatives should invest in technology
In an increasingly digitalizing world, the importance of data, the ‘new oil’, is becoming progressively more evident and with it the need for cooperatives to diversify into the digital sphere.
The digital economy in Kenya will contribute Sh662 billion by 2028, a trajectory aligned with the government’s Vision 2030 and the Bottom-up Economic Transformation Agenda which underscores integration of digital technologies into key sectors like agriculture, trade, MSMEs, and financial services. What benefits could cooperatives draw by integrating digital technology into their operations?
This week the Cooperative Movement stakeholders hosted by the Cooperative University of Kenya, the State Department of Cooperatives, and the Platform Cooperativism Consortium retreats to Mombasa to explore this question.
Technology is central to Africa’s mobile telephony-aided match to the global marketplace. In January 2024, around 74 per cent of all web traffic in Africa were through mobile phones. In June 2024, Kenya had a mobile phone penetration rate of 133 per cent, with at least 98 per cent under 4G coverage.
In an increasingly digitalizing world, the importance of data, the ‘new oil’, is becoming progressively more evident and with it the need for cooperatives to diversify into the digital sphere. This transition may come with risks relating to informed consent, lack of resources, relevance of the data captured, the burden of time taken, and the security of the data itself. But, benefits are far more and include greater access to information, potential for entrepreneurship in the digital sphere and improved decision-making.
Platform cooperatives should particularly interest the youth because of their comparative advantage in digital literacy compared to their parents' generation and Kenya’s supportive start-up ecosystem. A platform cooperative is a cooperatively owned, democratically governed business that establishes a digital platform and uses a website, mobile app or protocol to facilitate the sale of goods and services to meet the common economic, social and cultural needs of members, including those who deliver services in form of labour, time, skills and assets. They bring a longstanding tradition of cooperativism to online economies and social enterprises.
Here are three potential benefits. First, in agricultural cooperatives, this could help spur interest among the youth and help tackle the challenge of an aged-farmer population. This would, in turn, boost food security and attract additional foreign exchange from the export of value-added cash crops.
Second, in India, the Kerala Food Platform, a statewide cooperative network of 11,000 farms, is using digital technology to connect small-scale farmers, consumers, and stakeholders, certify their agricultural production, and enable collective market entry to gain leverage and secure higher prices.
Finally, the Kenya Rural Transformation Centers Digital Platform project aims to do what GrownBy, a farmer-owned e-commerce app in upstate New York, is doing for farmers. This enables farmers to sell directly to customers, streamline sales, manage orders with real-time tracking.
Prof Nyamongo, a multiple award-winning anthropologist and Fulbright Scholar, is deputy VC at The Cooperative University of Kenya. [email protected]. @Prof_IKNyamongo
