In early November, the United Nations concluded theInternational Year of Cooperatives. It is interesting in thisturbulent economic time and given the current populist sentimentthat the initiative to recognize the value of cooperatives did notreceive greater attention.

Maybe it's not surprising. When most people think aboutcooperatives, they think of the local neighborhood market that wasstarted and is owned by its residents. Of course, we tend to throwlabels on such enterprises as “crunchy” or “granola” to suggestthat the people and the business don't reflect the values andprinciples of the majority.

But that's not true. While the neighborhood market fulfills acertain need, so do other much larger businesses that employ thecooperative business model. They may focus on agriculture, food,energy, insurance and financial services. Consider thesebusinesses: REI, Sunkist, Land O'Lakes, ACE Hardware (many hardwarestores in general) or credit unions.

Internationally, cooperatives play a significant role inimproving the living conditions of entire countries. In addition,cooperatives are instrumental in eliminating poverty in countriessuch as Ethiopia. They are revolutionizing the financial servicesindustry in Kenya. In post-communist countries like Russia andPoland, individuals value cooperatives for enabling them to engagein a democratic process to direct their own destiny. There are manyinternational examples where cooperatives provide the foundationfor the economic independence and empowerment of women.

Why are cooperatives so effective?

Cooperatives fundamentally bring economics back to the peoplethey serve. They promote the ability to “do good while doing well.”For more than 70 years, cooperatives have continued to thrive invarious industries because they have been an alternative to thein-the-moment mentality of some of the world's largestcorporations.

In the aftermath of the financial crisis, a lack of trust hascreated a curiosity whether alternative business models arepreferable. The collapse of the relationship between a company'sprofitability and the well-being of the customer is not justconfined to banking. Ask most businesses what is important and theanswer is likely “to be more profitable.” Profitability iscertainly necessary.

However, in many instances profitability by today's standard isa narrow, short-term focus on growth for growth's sake. Thisshortsighted view ties the hands of a corporation, constraining itto respond to maximum results in a limited timeframe, focusing onquarterly earnings calls, and trying to deliver immediate returnsto shareholders.

This logic forces companies to overlook the fact that theirenormous resources influence the world, and that their strategiesimpact consumers and employees upon whom they depend. Thispressures companies to focus heavily on short-term gain and less onlong-term viability.

Cooperatives are the opposite. They fundamentally understand howtheir strategies impact the lives of their consumers and employees.It is why they have strict governance practices and decision-makingprocesses that give priority to the long-term interests of members.America's greatest companies, even those that are not cooperatives,do rightfully work for profitability, but they do so in the spiritof building enduring organizations.

The success of the cooperative model has much to do withfocusing on the needs of members, having proximity to and knowledgeof markets, and having a strong set of social values that benefitmembers. Cooperatives consider that a significant element of theirfuture is to support the development of people and society.

And that's why we'll see more businesses using the cooperativebusiness model in the years ahead. It is a building block for astronger, more stable economy. Together, we can compete morebroadly while staying focused on how we re-invest in our people andour communities.

Patrick S.Jury is chairman of Affiliate Management Co. and president/CEOof the Iowa Credit Union League.