In a few words, what is this idea all about?
Imagine: You have a box with 50 smartphones, pre-loaded with a special app. You bring it to a community of economically deprived but technically literate people, like the young and unemployed in a self-governed social center in crisis-struck Spain. You help everybody install the app on their phone resp. hand one of the pre-loaded phones to those that don’t have a smartphone. Finally you pull out your own phone, pull up your app and hit a big green “Start” button …
The app immediately jump-starts a flourishing local economy by asking its members some questions about their resources, skills and needs and by connecting them to each other with a toolbox of alternative economy tools: sharing economy solutions, LETS alternative currency, community gardening, planning algorithms for a micro-economy, a P2P reputation system and more.
For a more detailed writeup on a similar idea that is a precursor to this one, see The Local Resource Information System.
Involved actors: Matthias Ansorg for Android app development; an academic institution for scientific advice (to be determined); and a pilot user community (to be determined, current proposal is a self-governed social center (CSOA) in Spain).
How is this idea innovative?
Context: There is already a lot of ideas for how to run an alternative economy in economic crisis and depression, like the one experienced in Greece, Spain and Portugal these days. The range is from LETS local currencies to all kinds of sharing and collaborative economy solutions like ride sharing (side.cr), renting unused private space (AirBnB) etc… They still fail to reach a significant role in a national economy, or in individual lives – which is mostly due to network effects (the “critical mass of users”) problem.
Innovation: This project is about making a local alternative economy work not by inventing new mechanisms for it but by integrating the existing ones tightly enough and making them accessible enough (on free smartphones, if necessary) so that a real, working, self-sustaining system will result, not a set of unrelated parts that lie around like an unassembled machine. The ubiquitous, web-connected smartphone app (in addition to a normal website interface) seems like the best way to implement this, and to our knowledge, it has never been done or tried.
How will your idea have an impact? How will you measure your impact? (Explain how your idea will have an impact on helping target people/groups move towards work or into new types of work. What is it about your idea that will achieve this?)
Target group: Economically deprived people in EU member states who are technically literate enough to operate a moderately complex smartphone application. This covers nearly all unemployed youth, and there are a lot of them (official latest youth unemployment rate from Spain for example is 52.9%).
The intended impact is a big increase in these people’s compensated economic activity – like tenfold. It’s compensated, so not just about writing hopeless job applications. But it’s not compensated in legal tender – instead, it’s a new kind of work. It provides the same benefits of economic activity like an employee job however, namely to support and improve the lives of the workers and the surrounding society. So there’s an impact, but GDP is the wrong measure for it. Instead, we measure the “internal GDP” of the alternative currency used by this app, and how it increases. Also we measure people’s individual economic situation with a questionnaire that is handed out before the start of the economy app, and regularly after it, and answered within the app itself.
Finally, there can be an impact on business creation: generally speaking, running a business in such an alternative economy is legally possible as long as it documents its alternative currency trades with invoices issued in legal tender, and earns enough legal tender alongside to pay its taxes with. That’s how trade exchanges work, which is “bartering for businesses”. Now being able to do business ca. 70% in alternative currency is great for a business, because the alternative currency does not have the liquidity issues of legal tender in times of depression: it can be created by everybody “out of thin air” by a mutual agreement on debt (“IOU”). Which means that a lot of tax-paying small business startups can arise from such app-initiated, local economies.
At what scale will your idea operate initially and how do you think it can be implemented in another EU member state in the future?
The app (the smartphone software implemented for this project) will be developed together with one community that uses and evaluates it and provides feedback. But at the same time, it will be provided online as free and open source software, together with an extensive “operator’s manual” on how to start and maintain a local economy with it (jurisdiction dependent sections of this manual have to be contributed once there are experiences with similar projects in other EU member states).
This intends for viral self-replication in all EU member states and beyond. If the idea is sound and works indeed, it is expected that it will spread quickly because of the economic necessities in Europe’s crisis areas (compare the LETS alternative currency systems, counting ca. 300 projects in Greece as of 2012 because of the economic crisis, and even though LETS alone does not provide the full potential of a local economy because it omits sharing features etc.).
Viral self-replication will be supported by some public relations activity: making the system known in the target group, which is as simple as spreading the idea via social activist news and project networks (like n-1.cc).
How do you think your idea could be sustained over the next five years?
As an economy-system, this project intends to achieve permanent self-sustainability more or less immediately after deploying the first ready-to-use version of the economy app in a community.
This also includes support for the app’s further development by involving open source developers and alternative currency donations from the different local economy communities using this app.
However, a local economy group can also disband. This will happen not too rarely, as is the case in all small / grassroots economy projects, for example due to leadership issues. Sustainability beyond such an event will be provided by allowing the members to re-group immediately into other or new local economy groups. And by ensuring that the app software development is performed independent of the support of any one local economy community.
What are the most important things to have in place to make this idea happen? If there would be 20k EUR cash money available for it, how would it be used?
Implementing the app software and a founding a first local economy community needs at this point: funds to support an Android software developer (who can be the person behind this proposal) for ca. 6 months while programming the initial version of the app; a group wanting to try the software for setting up a local economy; and some smartphones.
Additionally, some scientific advice would be very much welcomed. This could be organized by making this project a third-party funded PhD thesis in computer science.
Cash money would be used like this: (1) 6000 EUR for supporting the initial version’s development during 6 months’ equivalent of full-time work; (2) 4000 EUR to acquire ca. 50 used Android smartphones for use in the initial local economy; (3) 10 000 EUR over 2-3 years for various expenses to refine the software and to promote its adoption in other communities. This can include conference attendance and on-site training for new local economy communities. The cash money will only be used where the task cannot be done with the alternative currency donations from within the local economies (which can be spent for translation, documentation authoring etc.).