Co-opetition: a model for economic development in the agri-food system?
While co-opetition may have gained popular definition in California’s hi-tech manufacturing sector, co-opetition amongst farmers may indeed spur regional economic development in the growing agri-food sector here in Michigan.
May 31, 2013 - Author: Rob Sirrine, Michigan State University Extension
Julie Bowser, IBM Global Services Consultant recently penned an article entitled: "Strategic co-opetition: The value of relationships in the networked economy". She suggests that in a networked economy, businesses must be able to compete but also cooperate as well. Thus “co-opetition” requires that businesses move beyond pure competition to cooperative relationships where a rising tide lifts all boats.
What does this have to do with Michigan’s agri-food system? The Leelanau Peninsula Vitners Association Wine Trail offers one example. While one winery could be considered a novelty and several competing against each other healthy competition, the Leelanau Peninsula Vitners Association perceives value in cooperating to collectively promote the region’s wineries through development of a website, festivals, and even an iPhone application. As Brandenburger and Nalebuff, professors at the Harvard Business School and the Yale School of Management suggest, "the success of most businesses is dependent on the success of others, yet they must compete to capture value created in the market and protect their own interests."
Besides grape growers, other farmers may harvest benefit from co-opetition as well. The Northwest Michigan Council of Governments and Michigan State University Extension are coordinating efforts to help farmers in northwest Michigan scale up to meet the increasing demand from the regions’ institutional markets. The allegiance is supported with grant funds and technical assistance from the Michigan Department of Agriculture and Rural Development and the Michigan Economic Development Corporation. Development of a regional food hub will provide necessary infrastructure to help farmers wash, sort, process, and package a variety of vegetables and fruit that a single farmer may not have the resources nor the economy of scale to fund. According to the USDA, a food hub is: “a centrally located facility with a business management structure facilitating the aggregation, storage, processing, distribution, and/or marketing of locally/regionally produced food products.” Thus, cooperation amongst several farmers within a regional food hub allows them to diversify into a more stable, off-season market enhancing everyone’s bottom line and expanding markets to institutions and schools to purchase and serve locally grown food year round.
While co-opetition may have gained popular definition in California’s hi-tech manufacturing sector, co-opetition amongst farmers may indeed spur regional economic development in the growing agri-food sector here in Michigan.
