Peter Ashe led this session (and has shared his overview here: http://www.slideshare.net/pashe/could-online-market-places-tackle-poverty) which was triggered by seeing a paper from Wingham Rowan on this topic (http://www.jrf.org.uk/publications/online-marketplaces-poverty)
The idea Peter wanted to share was the notion of digital marketplaces for time. And the idea that a good online marketplace could tackle poverty as discussed in Wingham Rowan (2010). Amazon, eBay, microfinance site Zopa, CraigsList. There are issues but Rowan estimates there are 100 million untraded resources in the UK, by which he means, for example: what does your vacuum cleaner do when you aren’t using it? This principle can be applied to cars, labour, help (e.g. babysitting), etc. Also the government wants to get the 80% of economically active people in the UK busy but what about the rest? You can trade something even if that’s without a job or without wanting to contribute that level of work. This is not necessarily a money thing but could be a “let” (e.g. timebanking). There are some substantial benefits (e.g. the growth of a training economy). However digital access can be an issue.
There is some local activity in this area. Grameen bank in Glasgow working with Glasgow Caledonian University to offer microbanking abroad and here. Also personal care. Also HP India have worked on an add on to allow text transactions (those usually done in browsers) which is more inclusive. We don’t build a new online market from the top down. The government set the parameters for how a National Lottery is run but then lets it go- it’s a complex IT development programme that works. Perhaps that’s how one does this.
So, who is already doing this?
James: There are some but can’t recall the name. But there are also some very interesting books on this.
Nicola: There are some time banks in Edinburgh and setting up in Edinburgh. However there are substantial issues with some time transactions – Peter mentioned childcare and this is definitely out of scope for timebanking scheme for a variety of legal reasons. Additionally the potentially economically active people who are on benefits can be quite restricted in how many hours per week they are permitted to volunteer. Neither of these factors is a blocking issue but they mean that there is a need for robust guidance and Q&A in rolling out any such scheme.
Dan: There is a really interesting potential here to track and reward hours as benefit top up. Some won’t want to be paid for their volunteering of course.
James: There is a challenge here about volunteering, unpaid work experience in some sectors is already an expectation for those starting their careers and this can be increadibly excluding for those from working class backgrounds. Any volunteering that becomes expected can be quite problematic and could be unintentionally excluded.
Richard: Perhaps we need to rephrase here as not being about poverty but about enriching society instead? But however we phrase this how do you drive that for maximum engagement?
Ian: You mentioned the lottery before. Would it work for this? There is profit in that system so there is a significant financial motivation. Would this sort of marketplace be motivated purely on altruism?
Peter: Perhaps this is a mixed economy? Various networks run by an organisation that could take a very small financial fee to do this? Maybe this would be a social enterprise rather than a for profit organisation though.
Dan: Maybe one could use the Just Giving model – they don’t charge a fee but instead take a cut of the gift aid on contributions. This is a cheap model for charities.
James: But how would that model work for time rather than money transactions?!
Peter: In terms of viable business models we did some work at social innovation camp on this…
James: There are various microfinance companies trying to set up in the UK. Does the government need to be involved in this process of setting up a marketplace?
Peter: No but if the government supports this system and buys labour this way that would certainly help trigger activity.
Richard: But how do you set a price for a complex serious of transactions?
Nicola: Timebanking sees an hour as an hour no matter what is exchanged or the expertise or type of time volunteered. There is no financial value to these hours and that is crucial for how this system works in practice. Also those that will always be in credit or deficit can pass on time to others – so prisoners or charity groups can gift hours to their families or vulnerable people for instance.
Richard: Does there have to be a monetary core to the type of online marketplace we are envisioning?
Peter: It’s hard to imagine there not being some sort of value for time in the area we’re thinking about?
Nicola: How does this sit with the local currencies movement (e.g. the Lewes Pound)
Alastair: We have worked with various local currencies. Based on experiences with those maybe you want a White label marketplace online that also translates into Pounds Sterling for organisations. There is some very interesting work to be done here. There are issues but you can do some very interesting things with local currencies and there are ways to promote use (e.g. having a one to one exchange with Sterling but offering discounts for using local currency rather than cash in shops – so half a dozen eggs is £1.30 or one local pound say). There was a good radio programme on this recently (You & Yours, broadcast 28th July on BBC Radio 4).
Peter: That would be very interesting but who would look at that? Thinking about this any local online marketplace also allows really interesting scope in assessing skills in an area and any gaps or needs for training, etc.
Richard: There are real issues around start up funding and the use of match funding. Scottish Enterprise could give expertise here. Funding for start ups could be crowd sourced perhaps?
Alastair: A sort of Software As A Service model to assess and get small funders in?
James: Microfinance companies do want to do that. And the technology could be easy. Ning for instance helps organises this type of community. Community is the issue not technology.
N: For years they have been letting people collectively group cash for film production, I guess this is on a purchased share basis, so that lots of small donors can fund a large project on the understanding of minimal (or no) financial return.
Dan: This is also used as a microbrewery model too.
Richard: How do you choose to involve the community? It has to be about more than transactions. Surely an offline community linked to an online marketplace is much more powerful than just an online marketplace.
Alastair: Indeed, this is where value occurs.
Dan: Perhaps there is a need for a local community broker/facilitator for matching up needs locally?
Alastair: We’ve tried to do that in our community network [Alastair would need to provide a link here if there is a suitable one to share].
Richard: Well lets say my mother in law needs her garden maintained – she knows everyone in her community but wouldn’t ever think to ask for help in that modest Scottish way. A broker helps her to find help and means she avoids having to negotiate price. The broker can price the job and offer a solution.
Nicola: There are really useful groups that do help with this sort of work but many may lose funding.
Alastair: I think there is something to be looked at in the fact that there is one place for government tenders and bids but not for charity or voluntary groups. Sometimes putting ideas to tender would be great for community groups. Maybe a really useful marketplace would be a sort of social tender site.
And on that interesting idea we were done… Comments and further discussion welcomed here – it was a really exciting topic to explore around especially given recent microfinance companies and innovation in this area.