[p2p-research] editorial on a social innovation stimulus

[Michel Bauwens]

Any idea if this makes a chance in the mainstream press, and where it coud
be published,

thanks for suggestions:

(you can change 'asia' with any other regional marker)

Asia needs Social Innovation Stimulus plan

According to the Asian Development Bank[i] <#_edn1>  the fall in the value
of financial assets may have reached $50,000bn, with estimated losses in
Asia (excluding Japan), of at $9,625bn. Developing countries faced a
financing gap of between $270bn and $700bn a year as capital flows out of
their countries. Clearly, what the global economy is facing is not just a
recession, but a long process of de-leveraging and deflation, which may last
between a half and a full decennium to be resolved (it may also last a lot
longer, as previous Depressions have shown).
Two things are also equally certain: the export-based models of Asia will
catch a serious flu, and the necessary restructuring to more internal market
dynamics will take a lot of time in a under-capitalized environment. This is
the bad news about the financial tsunami that we are all familiar with, but
perhaps push away to easily to focus on the good times which may come back
eventually.
The question is however: what do we do in the meantime, in particular with
the hundreds of thousands of university graduates that will come out of the
educational system, and that will face the prospects of a number of years
without a job?  Such a long period of inactivity may be very detrimental,
not just as wasted potential for the country, but also because it
disempowers those graduates from the needed experience to keep and augment
their expertise. Not to speak of the social dislocation which disaffected
youth may produce to fragile societies.
When the world of business falters, is there another way? Is there a policy
which may obtain large positive externalities, i.e. the highest possible
value for public investments?
The positive and hopeful answers  is: yes there is, and it all has to do
with the new potential of what we can call “social innovation”, or “social
production”.

To understand the logic of this promise, we can look to a less severe, but
nevertheless serious crisis:  that of the internet bubble collapse in
2000-1. As an internet entrepreneur, I personally experienced both the manic
phase, and the downturn, and the experience was life changing because of the
important discovery I and others made at that time. All the pundits where
predicting, then as now, that without capital, innovation would stop, and
that the era of high internet growth was over for a foreseeable time. In
actual fact, the reality was the very opposite, and something apparently
very strange happened. In fact, almost everything we know, the Web 2.0, the
emergence of social and participatory media, was born in the crucible of
that downturn. In other words, innovation did not slow down, but actually
increased during the downturn in investment. This showed the following new
tendency at work: capitalism is increasingly being divorced from
entrepreneurship, and entrepreneurship becomes a networked activity taking
place through open platforms of collaboration.
The reason is that internet technology fundamentally changes the
relationship between innovation and capital. Before the internet, in the
Schumpeterian world, innovators need capital for their research, that
research is then protected through copyright and patents, and further funds
create the necessary factories. In the post-schumpeterian world, creative
souls congregate through the internet, create new software, or any kind of
knowledge, create collaboration platforms on the cheap, and paradoxically,
only need capital when they are successful, and the servers risk crashing
from overload. As an example, think about Bittorrent, the most important
software for exchanging multimedia content over the internet, which was
created by a single programmer, surviving through a creative use of some
credit cards, with zero funding. But the internet is not just for creative
individual souls, but enables large communities to cooperate over platforms.
Very importantly, it is not limited to knowledge and software, but to
everything that knowledge and software enables, which includes
manufacturing. Anything that needs to be physically produced, needs to be
‘virtually designed’ in the first place.
This phenomena is called social innovation or social production, and is
increasingly responsible for most innovation. In an era where most educated
people have their brains interconnected through multiple networks of their
choice, having an isolating vision of “us”, active producers, vs. them,
‘passive consumers” is a dangerous conceit. In fact, no single closed
company can compete with an open business ecology practicing co-design,
co-creation, or crowdsourcing in all their forms. An important corollary of
enabling such open business ecologies is a new attitude to intellectual
property. If you want to privatise the work of the collectivity, no one is
willing to collaborate for your exclusive private gain!! Therefore, those
companies that enable and empower social innovation, that use open forms of
intellectual property, are more successful in attracting cooperation, and
can built their business on the basis of a thriving knowledge commons. This
has the additional benefit that everyone can benefit from every innovation.
Does it work? Of course, the Linux economy is now estimated to be a
$36b economy, and that is just one of countless free software-based sectors.
Chris Anderson of Wired magazine estimates the annual total value of this
type of economy at $300 billion. Think also about user-generated content as
a subsector: the new successful companies, like Google, Youtube, Flickr,
Twitter, etc.. are not creating value themselves, but rather enabling user
communities to create value through their platforms. As a rule, all
successful social production efforts end up creating a vibrant business
ecology that both sustains it and profits from it. Already in countries like
Latin America (like Ecuador), and  in some states in India (Kerala), it is
said that nearly every free software programmers has a job.
But what does this all mean for the Asian economic crisis and the plight of
the young people that we touched upon at the beginning? The good news is
this: first, the strong distinction between working productively for a wage,
and idly waiting for one, is melting. All the technical and intellectual
tools are available to allow young people, and older people for that matter,
to continue being engage in value production, and hence also to continue to
build their experience (knowledge capital), their  social life (relationship
capital) and reputation. All three of which will be crucial in keeping them
not just employable, but will actually substantially increase their
potential and capabilities. The role of business must be clear: it can, on
top of the knowledge, software or design commons created by social
production, create added value services that are needed and demanded by the
market of users of such products (which includes other businesses), and can
in turn sustain the commons from which it benefits, making the ecology
sustainable. While the full community of developers create value for
businesses to build upon, the businesses in term help sustain the
infrastructure of cooperation which makes continued development possible.
But what can and should be the role of the state in this process? I’m
advocating the concept of a partner state, which enables and empowers social
production to occur.
First of all, public authorities should make a high priority to establish a
fully functional broadband infrastructure, which also reaches the rural
majority, and without which scalable cooperation is impossible.
Second, public authorities have an important educational role regarding the
commons and the public good. It should create a Commons Institute, which
promotes such practices in key areas of social life, teaching users about
open licences and their benefits.  In Brest, France, the city authorities
have been instrumental in supporting and sustaining the cultural production
of their citizens, which has not only enriched  the local cultural life, but
attracted more tourists. This general support of social innovation may and
should include the creation of public co-working spaces that are linked to
processes of business incubation.
Third, public authorities should be a business incubator. In Toronto, for
example, the Open Source Business Resource has been instrumental in
supporting free software start-ups, creating a local business ecology and
open source service industry that support local businesses in their adaptive
processes.
Fourth, public authorities should reward, under the forms of awards, prizes
and various forms of public patronage, the work of the key individuals who
drive the commons forward. The situation of open knowledge, software, and
design is very similar to 18th century science, which was supported by a
network of patrons. For every collaborative social production process, there
is a core of individuals driving it forward, often propelled by motivations
that are related to the creation of a public good, and without whose
engagement, no business ecology can grow. It therefore makes good sense,
both in business and in policy terms, to create avenues for such public
patronage.
Finally, social innovation should not be seen in isolation, but as part of a
growing and interconnected set of trends towards ‘peer to peer’
infrastructures.
Next to the well-known internet based ICT infrastructure, the following are
also coming into play, and also offer important suggestions for anti-crisis
measures. They are important to increase the resilience of local economies
in periods of globalized crisis:
-
          Peer to peer energy grids: Obama’s Green Stimulas shows the
emergent understanding that the energy infrastructure needs to change in an
era that combines Climate Change and Peak Oil as major challenges for the
survival of human society. In particular, resilient societies cannot afford
a unique dependency of depletable fossil fuels.  A p2p energy grid allows
citizens to invest in home and neighborhood-based energy production based on
renewable energy, which can be sold back to the grid or shared with others
more in need. It strengthens local communities in times of energy crises.
Think of the enormous advances that could be made, if Thai engineers were
stimulated to work on open designs for solar energy, which could become the
basis of a thriving new production sector!
-          Complementary peer to peer monetary systems: as shown by the
success of the WIR system in Switzerland (which has proven counter-cyclical
effects in times of economic crisis), and by the proliferation of regional
currencies in the Germanic-language countries of Europe, but also Thailand’s
very own Santi Suk, such systems are crucial to protect and sustain local
economies in time of duress. Such currencies allow a much greater part of
local value to stay within the community that produces it, strengthening the
resilience against social and economic crises. They are immune to the
pressures that may affect the national currency.

In conclusion, what does a social innovation stimulus plan achieve?
 In times of capital scarcity, it allows the continuation of the process of
value creation, improves the human capital of graduates but also of the
whole participating population, and creates a resilient ecology of
businesses that cooperate with the social innovation communities. If public
authorities sustain the growth of this new fourth sector, it creates much
stronger and resilient economies that can withstand the storms of
globalization. Value that is created in sectors relying on social production
and open licensing, is not destroyed if a intellectual-property holding
company goes belly-up, but remains usable to the other businesses and
participants of the knowledge commons.

-- 
Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
http://www.dpu.ac.th/dpuic/info/Research.html -
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

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