Emerging Technology From the arXiv: “Nobody agrees on how to define a city. But the emergence of “natural cities” from social media data sets may change that, say computational geographers…
A city is a large, permanent human settlement. But try and define it more carefully and you’ll soon run into trouble. A settlement that qualifies as a city in Sweden may not qualify in China, for example. And the reasons why one settlement is classified as a town while another as a city can sometimes seem almost arbitrary.
City planners know this problem well. They tend to define cities by administrative, legal or even historical boundaries that have little logic to them. Indeed, the same city can sometimes be defined in various different ways.
That causes all kinds of problems from counting the total population to working out who pays for the upkeep of the place. Which definition do you use?
Now help may be at hand thanks to the work of Bin Jiang and Yufan Miao at the University of Gävle in Sweden. These guys have found a way to use people’s location recorded by social media to define the boundaries of so-called natural cities which have a close resemblance to real cities in the US.
Jiang and Miao began with a dataset from the Brightkite social network, which was active between 2008 and 2010. The site encouraged users to log in with their location details so that they could see other users nearby. So the dataset consists of almost 3 million locations in the US and the dates on which they were logged.
To start off, Jiang and Miao simply placed a dot on a map at the location of each login. They then connected these dots to their neighbours to form triangles that end up covering the entire mainland US.
Next, they calculated the size of each triangle on the map and plotted this size distribution, which turns out to follow a power law. So there are lots of tiny triangles but only a few large ones.
Finally, the calculated the average size of the triangles and then coloured in all those that were smaller than average. The coloured areas are “natural cities”, say Jiang and Miao.
It’s easy to imagine that resulting map of triangles is of little value. But to the evident surprise of ther esearchers, it produces a pretty good approximation of the cities in the US. “We know little about why the procedure works so well but the resulting patterns suggest that the natural cities effectively capture the evolution of real cities,” they say.
That’s handy because it suddenly gives city planners a way to study and compare cities on a level playing field. It allows them to see how cities evolve and change over time too. And it gives them a way to analyse how cities in different parts of the world differ.
Of course, Jiang and Miao will want to find out why this approach reveals city structures in this way. That’s still something of a puzzle but the answer itself may provide an important insight into the nature of cities (or at least into the nature of this dataset).
A few days ago, this blog wrote about how a new science of cities is emerging from the analysis of big data. This is another example and expect to see more.
Ref: http://arxiv.org/abs/1401.6756 : The Evolution of Natural Cities from the Perspective of Location-Based Social Media”
Report “Big and open data in Europe: A growth engine or a missed opportunity?”
Press Release: “Big data and open data are not just trendy issues, they are the concern of the government institutions at the highest level. On January 29th, 2014 a Conference concerning Big & Open Data in Europe 2020 was held in the European Parliament.
Questions were asked and discussed like: Is Big & Open Data a truly transformative phenomena or just a ‘hot air’? Does it matter for Europe? How big is the economic potential of Big and Open Data for Europe till 2020? How each of the 28 Member States may benefit from it?…
The conference complemented a research project by demosEUROPA – Centre for European Strategy on Big and Open Data in Europe that aims at fostering and facilitating policy debate on the socioeconomic impact of data. The key outcome of the project, a pan-European macroeconomic study titled “Big and open data In Europe: A growth engine or a missed opportunity?” carried out by the Warsaw Institute for Economic Studies (WISE) was presented.
We have the pleasure to be one of the first to present some of the findings of the report and offer the report for download.
The report analyses how technologies have the potential to influence various aspects of the European society, about their substantial, long term impact on our wealth and quality of life, but also about the new developmental challenges for the EU as a whole – as well as for its member states and their regions.
You will learn from the report:
– the resulting economic gains of business applications of big data
– how to structure big data to move from Big Trouble to Big Value
– the costs and benefits of opening data to holders
– 3 challenges that Europeans face with respect to big and open data
– key areas, growth opportunities and challenges for big and open data in Europe per particular regions.
The study also elaborates on the key principle of open data philosophy, which is open by default.
Europe by 2020. What will happen?
The report contains a prognosis for the 28 countries from the EU about the impact of big and open data from 2020 and its additional output and how it will affect trade, health, manufacturing, information and communication, finance & insurance and public administration in different regions. It foresees that the EU economy will grow by 1.9% by 2020 thanks to big and open data and describes the increase of the general GDP level by countries and sectors.
One of the many interesting findings of the report is that the positive impact of the data revolution will be felt more acutely in Northern Europe, while most of the New Member States and Southern European economies will benefit significantly less, with two notable exceptions being the Czech Republic and Poland. If you would like to have first-hand up-to-date information about the impact of big and open data on the future of Europe – download the report.”
The Moneyball Effect: How smart data is transforming criminal justice, healthcare, music, and even government spending
TED: “When Anne Milgram became the Attorney General of New Jersey in 2007, she was stunned to find out just how little data was available on who was being arrested, who was being charged, who was serving time in jails and prisons, and who was being released. It turns out that most big criminal justice agencies like my own didn’t track the things that matter,” she says in today’s talk, filmed at TED@BCG. “We didn’t share data, or use analytics, to make better decisions and reduce crime.”
Milgram’s idea for how to change this: “I wanted to moneyball criminal justice.”
Moneyball, of course, is the name of a 2011 movie starring Brad Pitt and the book it’s based on, written by Michael Lewis in 2003. The term refers to a practice adopted by the Oakland A’s general manager Billy Beane in 2002 — the organization began basing decisions not on star power or scout instinct, but on statistical analysis of measurable factors like on-base and slugging percentages. This worked exceptionally well. On a tiny budget, the Oakland A’s made it to the playoffs in 2002 and 2003, and — since then — nine other major league teams have hired sabermetric analysts to crunch these types of numbers.
Milgram is working hard to bring smart statistics to criminal justice. To hear the results she’s seen so far, watch this talk. And below, take a look at a few surprising sectors that are getting the moneyball treatment as well.
Moneyballing music. Last year, Forbes magazine profiled the firm Next Big Sound, a company using statistical analysis to predict how musicians will perform in the market. The idea is that — rather than relying on the instincts of A&R reps — past performance on Pandora, Spotify, Facebook, etc can be used to predict future potential. The article reads, “For example, the company has found that musicians who gain 20,000 to 50,000 Facebook fans in one month are four times more likely to eventually reach 1 million. With data like that, Next Big Sound promises to predict album sales within 20% accuracy for 85% of artists, giving labels a clearer idea of return on investment.”
Moneyballing human resources. In November, The Atlantic took a look at the practice of “people analytics” and how it’s affecting employers. (Billy Beane had something to do with this idea — in 2012, he gave a presentation at the TLNT Transform Conference called “The Moneyball Approach to Talent Management.”) The article describes how Bloomberg reportedly logs its employees’ keystrokes and the casino, Harrah’s, tracks employee smiles. It also describes where this trend could be going — for example, how a video game called Wasabi Waiter could be used by employers to judge potential employees’ ability to take action, solve problems and follow through on projects. The article looks at the ways these types of practices are disconcerting, but also how they could level an inherently unequal playing field. After all, the article points out that gender, race, age and even height biases have been demonstrated again and again in our current hiring landscape.
Moneyballing healthcare. Many have wondered: what about a moneyball approach to medicine? (See this call out via Common Health, this piece in Wharton Magazine or this op-ed on The Huffington Post from the President of the New York State Health Foundation.) In his TED Talk, “What doctors can learn from each other,” Stefan Larsson proposed an idea that feels like something of an answer to this question. In the talk, Larsson gives a taste of what can happen when doctors and hospitals measure their outcomes and share this data with each other: they are able to see which techniques are proving the most effective for patients and make adjustments. (Watch the talk for a simple way surgeons can make hip surgery more effective.) He imagines a continuous learning process for doctors — that could transform the healthcare industry to give better outcomes while also reducing cost.
Moneyballing government. This summer, John Bridgeland (the director of the White House Domestic Policy Council under President George W. Bush) and Peter Orszag (the director of the Office of Management and Budget in Barack Obama’s first term) teamed up to pen a provocative piece for The Atlantic called, “Can government play moneyball?” In it, the two write, “Based on our rough calculations, less than $1 out of every $100 of government spending is backed by even the most basic evidence that the money is being spent wisely.” The two explain how, for example, there are 339 federally-funded programs for at-risk youth, the grand majority of which haven’t been evaluated for effectiveness. And while many of these programs might show great results, some that have been evaluated show troubling results. (For example, Scared Straight has been shown to increase criminal behavior.) Yet, some of these ineffective programs continue because a powerful politician champions them. While Bridgeland and Orszag show why Washington is so averse to making data-based appropriation decisions, the two also see the ship beginning to turn around. They applaud the Obama administration for a 2014 budget with an “unprecendented focus on evidence and results.” The pair also gave a nod to the nonprofit Results for America, which advocates that for every $99 spent on a program, $1 be spent on evaluating it. The pair even suggest a “Moneyball Index” to encourage politicians not to support programs that don’t show results.
In any industry, figuring out what to measure, how to measure it and how to apply the information gleaned from those measurements is a challenge. Which of the applications of statistical analysis has you the most excited? And which has you the most terrified?”
Mapping the ‘Space of Flows’
Paper by Reades J. and Smith D. A. in Regional Studies on the Geography of Global Business Telecommunications and Employment Specialization in the London Mega-City-Region: “Telecommunications has radically reshaped the way that firms organize industrial activity. And yet, because much of this technology – and the interactions that it enables – is invisible, the corporate ‘space of flows’ remains poorly mapped. This article combines detailed employment and telecoms usage data for the South-east of England to build a sector-by-sector profile of globalization at the mega-city-region scale. The intersection of these two datasets allows a new empirical perspective on industrial geography and regional structure to be developed.”
Google Hangouts vs Twitter Q&As: how the US and Europe are hacking traditional diplomacy
Wired (UK): “We’re not yet sure if diplomacy is going digital or just the conversations we’re having,” Moira Whelan, Deputy Assistant Secretary for Digital Strategy, US Department of State, admitted on stage at TedxStockholm. “Sometimes you just have to dive in, and we’re going to, but we’re not really sure where we’re going.”
The US has been at the forefront of digital diplomacy for many years now. President Obama was the first leader to sign up to Twitter, and has amassed the greatest number of followers among his peers at nearly 41 million. The account is, however, mainly run by his staff. It’s understandable, but demonstrates that there still remains a diplomatic disconnect in a country Whelan says knows it’s “ready, leading the conversation and on cutting edge”.
In Europe Swedish Minister for Foreign Affairs Carl Bildt, on the other hand, carries out regular Q&As on the social network and is regarded as one of the most conversational leaders on Twitter and the best connected, according to annual survey Twiplomacy. Our own William Hague is chasing Bildt with close to 200,000 followers, and is the world’s second most connected Foreign Minister, while David Cameron is active on a daily basis with more than 570,000 followers. London was in fact the first place to host a “Diplohack”, an event where ambassadors are brought together with developers and others to hack traditional diplomacy, and Whelan travelled to Sweden to take place in the third European event, the Stockholm Initiative for Digital Diplomacy held 16-17 January in conjunction with TedxStockholm.
Nevertheless, Whelan, who has worked for the state for a decade, says the US is in the game and ready to try new things. Case in point being its digital diplomacy reaction to the crisis in Syria last year.
“In August 2013 we witnessed tragic events in Syria, and obviously the President of the United States and his security team jumped into action,” said Whelan. “We needed to bear witness and… very clearly saw the need for one thing — a Google+ Hangout.” With her tongue-in-cheek comment, Whelan was pointing out social media’s incredibly relevant role in communicating to the public what’s going on when crises hit, and in answering concerns and questions through it.
“We saw speeches and very disturbing images coming at us,” continued Whelan. “We heard leaders making impassioned speeches, and we ourselves had conversations about what we were seeing and how we needed to engage and inform; to give people the chance to engage and ask questions of us.
“We thought, clearly let’s have a Google+ Hangout. Three people joined us and Secretary John Kerry — Nicholas Kirstof of the New York Times, executive editor of Syria Deeply, Lara Setrakian and Andrew Beiter, a teacher affiliated with the Holocaust Memorial Museum who specialises in how we talk about these topics with our children.”
In the run up to the Hangout, news of the event trickled out and soon Google was calling, asking if it could advertise the session at the bottom of other Hangouts, then on YouTube ads. “Suddenly 15,000 people were watching the Secretary live — that’s by far largest number we’d seen. We felt we’d tapped into something, we knew we’d hit success at what was a challenging time. We were engaging the public and could join with them to communicate a set of questions. People want to ask questions and get very direct answers, and we know it’s a success. We’ve talked to Google about how we can replicate that. We want to transform what we’re doing to make that the norm.”
Secretary of State John Kerry is, Whelan told Wired.co.uk later, “game for anything” when it comes to social media — and having the department leader enthused at the prospect of taking digital diplomacy forward is obviously key to its success.
“He wanted us to get on Instagram and the unselfie meme during the Philippines crisis was his idea — an assistant had seen it and he held a paper in front of him with the URL to donate funds to Typhoon Haiyan victims,” Whelan told Wired.co.uk at the Stockholm diplohack. “President Obama came in with a mandate that social media would be present and pronounced in all our departments.”
“[As] government changes and is more influenced away from old paper models and newspapers, suspenders and bow ties, and more into young innovators wanting to come in and change things,” Whelan continued, “I think it will change the way we work and help us get smarter.”
Why This Simple Government Website Was Named the Best Design of the Year
Here’s what makes it so deceivingly special.
Why does a straightforward, cut-and-dry website deserve the award? Because of that straightforwardness, actually. “There were thousands of websites, and we folded them into Gov.uk to make just one,” says Ben Terrett, head of design at the UK’s Government Digital Service, in a Dezeen-produced video. “Booking a prison stay should be as easy as booking a driver’s license test.”…
Terrett describes Gov.uk as an attempt to bring web design up to speed with technology like Glass, where the user interfacer all but disappears. “We haven’t achieved that yet with most web interfaces, [where] you can still see the graphic design,” he says. “But technology will change, and we’ll get past that.”
EPA Launches New Citizen Science Website
Press Release: “The U.S. Environmental Protection Agency has revamped its Citizen Science website to provide new resources and success stories to assist the public in conducting scientific research and collecting data to better understand their local environment and address issues of concern. The website can be found at www.epa.gov/region2/citizenscience.
“Citizen Science is an increasingly important part of EPA’s commitment to using sound science and technology to protect people’s health and safeguard the environment,” said Judith A. Enck, EPA Regional Administrator. “The EPA encourages the public to use the new website as a tool in furthering their scientific investigations and developing solutions to pollution problems.”
The updated website now offers detailed information about air, water and soil monitoring, including recommended types of equipment and resources for conducting investigations. It also includes case studies and videotapes that showcase successful citizen science projects in New York and New Jersey, provides funding opportunities, quality assurance information and workshops and webinars.”
Crowdsourcing Social Problems
Article by William D. Eggers in Reason: “reCAPTCHA and Duolingo both represent a distinctly 21st-century form of distributed problem solving. These Internet-enabled approaches tend to be faster, far less expensive, and far more resilient than the heavyweight industrial-age methods of solving big social problems that we’ve grown accustomed to over the past century. They typically involve highly diverse resources-volunteer time, crowdfunding, the capabilities of multinational corporations, entrepreneurial capital, philanthropic funding-aligned around common objectives such as reducing congestion, providing safe drinking water, or promoting healthy living. Crowdsourcing offers not just a better way of doing things, but a radical challenge to the bureaucratic status quo.
Here are several ways public, private, and nonprofit organizations can use lightweight, distributed approaches to solve societal problems faster and cheaper than the existing sclerotic models.
Chunk the Problem
The genius of reCAPTCHA and Duolingo is that they divide labor into small increments, performed for free, often by people who are unaware of the project they’re helping to complete. This strategy has wide public-policy applications, even in dealing with potholes….
Meanwhile, Finland’s DigitalKoot project enlisted volunteers to digitize their own libraries by playing a computer game that challenged them to transcribe scans of antique manuscripts.
Governments can set up a microtasking platform, not just for citizen engagement but as a way to harness the knowledge and skills of public employees across multiple departments and agencies. If microtasking can work to connect people outside the “four walls” of an organization, think of its potential as a platform to connect people and conduct work inside an organization-even an organization as bureaucratic as government.
…
Decentralize Service to the Self
A young woman slices her finger on a knife. As she compresses the bleeding with gauze, she needs to know if her wound warrants stitches. So she calls up Blue Cross’ 24-hour nurse hotline, where patients call to learn if they should see a doctor. The nurse asks her to describe the depth of the cut. He explains she should compress it with gauze and skip the ER. In aggregate, savings like this amount to millions of dollars of avoided emergency room visits.
Since 2003, Blue Cross has been shifting the work of basic triage and risk mitigation to customers. Britain’s National Health Service (NHS) implemented a similar program, NHS Direct, in 1998. NHS estimates that the innovation has saved it £44 million a year….
Gamify Drudgery
Finland’s national library houses an enormous archive of antique texts, which officials hoped to scan and digitize into ordinary, searchable text documents. Rather than simply hire people for the tedium of correcting garbled OCR scans, the library invited the public to play a game. An online program called DigitalKoot lets people transcribe scanned words, and by typing accurately, usher a series of cartoon moles safely across a bridge….
Build a Two-Sided Market
Road infrastructure costs government five cents per driver per mile, according to the Victoria Transport Policy Institute. “That’s a dollar the government paid for the paving of that road and the maintaining of that infrastructure…just for you, not the other 3,000 people that travelled that same segment of highway in that same hour that you did,” says Sean O’Sullivan, founder of Carma, a ridesharing application.
Ridesharing companies such as Carma, Lyft, and Zimride are attempting to recruit private cars for the public transit network, by letting riders pay a small fee to carpool. A passenger waits at a designated stop, and the app alerts drivers, who can scan a profile of their potential rider. It’s a prime example of a potent new business model…
Remove the Middleman
John McNair dropped out of high school at age 16. By his thirties, he became an entrepreneur, producing and selling handmade guitars, but carpentry alone wouldn’t grow his business. So the founder of Red Dog Guitars enrolled in a $20 class on Skillshare.com, taught by the illustrator John Contino, to learn to brand his work with hand lettered product labels. Soon, a fellow businessman was asking McNair for labels to market guitar pickups.
Traditionally, the U.S. government might invest in retraining someone like John. Instead, peer-to-peer technology has allowed a community of designers to help John develop his skills. Peer-to-peer strategies enable citizens to meet each other’s needs, cheaply. Peer-to-peer solutions can help fix problems, deliver services, and supplement traditional approaches.
Peer-to-peer can lessen our dependence on big finance. Kickstarter lets companies skip the energy of convincing a banker that their product is viable. They just need to convince customers…”
The GovLab Index: Open Data
Please find below the latest installment in The GovLab Index series, inspired by Harper’s Index. “The GovLab Index: Open Data — December 2013” provides an update on our previous Open Data installment, and highlights global trends in Open Data and the release of public sector information. Previous installments include Measuring Impact with Evidence, The Data Universe, Participation and Civic Engagement and Trust in Institutions.
Value and Impact
- Potential global value of open data estimated by McKinsey: $3 trillion annually
- Potential yearly value for the United States: $1.1 trillion
- Europe: $900 billion
- Rest of the world: $1.7 trillion
- How much the value of open data is estimated to grow per year in the European Union: 7% annually
- Value of releasing UK’s geospatial data as open data: 13 million pounds per year by 2016
- Estimated worth of business reuse of public sector data in Denmark in 2010: more than €80 million a year
- Estimated worth of business reuse of public sector data across the European Union in 2010: €27 billion a year
- Total direct and indirect economic gains from easier public sector information re-use across the whole European Union economy, as of May 2013: €140 billion annually
- Economic value of publishing data on adult cardiac surgery in the U.K., as of May 2013: £400 million
- Economic value of time saved for users of live data from the Transport for London apps, as of May 2013: between £15 million and £58 million
- Estimated increase in GDP in England and Wales in 2008-2009 due to the adoption of geospatial information by local public services providers: +£320m
- Average decrease in borrowing costs in sovereign bond markets for emerging market economies when implementing transparent practices (measured by accuracy and frequency according to IMF policies, across 23 countries from 1999-2002): 11%
- Open weather data supports an estimated $1.5 billion in applications in the secondary insurance market – but much greater value comes from accurate weather predictions, which save the U.S. annually more than $30 billion
- Estimated value of GPS data: $90 billion
Efforts and Involvement
- Number of U.S. based companies identified by the GovLab that use government data in innovative ways: 500
- Number of open data initiatives worldwide in 2009: 2
- Number of open data initiatives worldwide in 2013: over 300
- Number of countries with open data portals: more than 40
- Countries who share more information online than the U.S.: 14
- Number of cities globally that participated in 2013 International Open Data Hackathon Day: 102
- Number of U.S. cities with Open Data Sites in 2013: 43
- U.S. states with open data initiatives: 40
- Membership growth in the Open Government Partnership in two years: from 8 to 59 countries
- Number of time series indicators (GDP, foreign direct investment, life expectancy, internet users, etc.) in the World Bank Open Data Catalog: over 8,000
- How many of 77 countries surveyed by the Open Data Barometer have some form of Open Government Data Initiative: over 55%
- How many OGD initiatives have dedicated resources with senior level political backing: over 25%
- How many countries are in the Open Data Index: 70
- How many of the 700 key datasets in the Index are open: 84
- Number of countries in the Open Data Census: 77
- How many of the 727 key datasets in the Census are open: 95
- How many countries surveyed have formal data policies in 2013: 55%
- Those who have machine-readable data available: 25%
- Top 5 countries in Open Data rankings: United Kingdom, United States, Sweden, New Zealand, Norway
- The different levels of Open Data Certificates a data user or publisher can achieve “along the way to world-class open data”: 4 levels, Raw, Pilot, Standard and Expert
- The number of data ecosystems categories identified by the OECD: 3, data producers, infomediaries, and users
Examining Datasets…
FULL VERSION AT http://thegovlab.org/govlab-index-open-data-updated/
Building Creative Commons: The Five Pillars Of Open Source Finance
Brett Scott: “This is an article about Open Source Finance. It’s an idea I first sketched out at a talk I gave at the Open Data Institute in London. By ‘Open Source Finance’, I don’t just mean open source software programmes. Rather, I’m referring to something much deeper and broader. It’s a way of framing an overall change we might want to see in the financial system….
Pillar 1: Access to the means of financial production
Very few of us perceive ourselves as offering financial services when we deposit our money in banks. Mostly we perceive ourselves as passive recipients of services. Put another way, we frequently don’t imagine we have the capability to produce financial services, even though the entire financial system is foundationally constructed from the actions of small-scale players depositing money into banks and funds, buying the products of companies that receive loans, and culturally validating the money system that the banks uphold. Let’s look though, at a few examples of prototypes that are breaking this down:
- Peer-to-peer finance models: If you decide to lend money to your friend, you directly perceive yourself as offering them a service. P2P finance platforms extend that concept far beyond your circle of close contacts, so that you can directly offer a financial service to someone who needs it. In essence, such platforms offer you access to an active, direct role in producing financial services, rather than an indirect, passive one.
- There are many interesting examples of actual open source financial software aimed at helping to fulfil the overall mission of an open source financial system. Check out Mifos and Cyclos, and Hamlets (developed by Community Forge’s Matthew Slater and others), all of which are designed to help people set up their own financial institutions
- Alternative currencies: There’s a reason why the broader public are suddenly interested in understanding Bitcoin. It’s a currency that people have produced themselves. As a member of the Bitcoin community, I am much more aware of my role in upholding – or producing – the system, than I am when using normal money, which I had no conscious role in producing. The scope toinvent your own currency goes far beyond crypto-currencies though: local currencies, time-banks, and mutual credit systems are emerging all over
- The Open Bank Project is trying to open up banks to third party apps that would allow a depositor to have much greater customisability of their bank account. It’s not aimed at bypassing banks in the way that P2P is, but it’s seeking to create an environment where an ecosystem of alternative systems can plug into the underlying infrastructure provided by banks
Pillar 2: Widespread distribution
Financial intermediaries like banks and funds serve as powerful gatekeepers to access to financing. To some extent this is a valid role – much like a publisher or music label will attempt to only publish books or music that they believe are high quality enough – but on the other hand, this leads to excessive power vested in the intermediaries, and systematic bias in what gets to survive. When combined with a lack of democratic accountability on the part of the intermediaries, you can have whole societies held hostage to the (arbitrary) whims, prejudices and interests of such intermediaries. Expanding access to financial services is thus a big front in the battle for financial democratisation. In addition to more traditional means to buildingfinancial inclusion – such as credit unions and microfinance – here are two areas to look at:
- Crowdfunding: In the dominant financial system, you have to suck up to a single set of gatekeepers to get financing, hoping they won’t exclude you. Crowdfunding though, has expanded access to receiving financial services to a whole host of people who previously wouldn’t have access, such as artists, small-scale filmmakers, activists, and entrepreneurs with no track record. Crowdfunding can serve as a micro redistribution system in society, offering people a direct way to transfer wealth to areas that traditional welfare systems might neglect
- Mobile banking: This is a big area, with important implications for international development and ICT4D. Check out innovations like M-Pesain Kenya, a technology to use mobile phones as proto-bank accounts. This in itself doesn’t necessarily guarantee inclusion, but it expands potential access to the system to people that most banks ignore
Pillar 3: The ability to monitor
Do you know where the money in the big banks goes? No, of course not. They don’t publish it, under the guise of commercial secrecy and confidentiality. It’s like they want to have their cake and eat it: “We’ll act as intermediaries on your behalf, but don’t ever ask for any accountability”. And what about the money in your pension fund? Also very little accountability. The intermediary system is incredibly opaque, but attempts to make it more transparent are emerging. Here are some examples:
- Triodos Bank and Charity Bank are examples of banks that publish exactly what projects they lend to. This gives you the ability to hold them to account in a way that no other bank will allow you to do
- Corporations are vehicles for extracting value out of assets and then distributing that value via financial instruments to shareholders and creditors. Corporate structures though, including those used by banks themselves, have reached a level of complexity approaching pure obsfucation. There can be no democratic accountability when you can’t even see who owns what, and how the money flows. Groups likeOpenCorporates and Open Oil though, are offering new open data tools to shine a light on the shadowy world of tax havens, ownership structures and contracts
- Embedded in peer-to-peer models is a new model of accountability too. When people are treated as mere account numbers with credit scores by banks, the people in return feel little accountability towards the banks. On the other hand, if an individual has directly placed trust in me, I feel much more compelled to respect that
Pillar 4: An ethos of non-prescriptive DIY collaboration
At the heart of open source movements is a deep DIY ethos. This is in part about the sheer joy of producing things, but also about asserting individual power over institutionalised arrangements and pre-established officialdom. Alongside this, and deeply tied to the DIY ethos, is the search to remove individual alienation: You are not a cog in a wheel, producing stuff you don’t have a stake in, in order to consume stuff that you don’t know the origins of. Unalienated labour includes the right to produce where you feel most capable or excited.
This ethos of individual responsibility and creativity stands in contrast to the traditional passive frame of finance that is frequently found on both the Right and Left of the political spectrum. Indeed, the debates around ‘socially useful finance’ are seldom about reducing the alienation of people from their financial lives. They’re mostly about turning the existing financial sector into a slightly more benign dictatorship. The essence of DIY though, is to band together, not via the enforced hierarchy of the corporation or bureaucracy, but as part of a likeminded community of individuals creatively offering services to each other. So let’s take a look at a few examples of this
- BrewDog’s ‘Equity for Punks‘ share offering is probably only going to attract beer-lovers, but that’s the point – you get together as a group who has a mutual appreciation for a project, and you finance it, and then when you’re drinking the beer you’ll know you helped make it happen in a small way
- Community shares offer local groups the ability to finance projects that are meaningful to them in a local area. Here’s one for a solar co-operative, a pub, and a ferry boat service in Bristol
- We’ve already discussed how crowdfunding platforms open access to finance to people excluded from it, but they do this by offering would-be crowdfunders the chance to support things that excite them. I don’t have much cash, so I’m not in a position to actively finance people, but in my Indiegogo profile you can see I make an effort helping to publicise campaigns that I want to receive financing
Pillar 5: The right to fork
The right to dissent is a crucial component of a democratic society. But for dissent to be effective, it has to be informed and constructive, rather than reactive and regressive. There is much dissent towards the current financial system, but while people are free to voice their displeasure, they find it very difficult to actually act on their displeasure. We may loathe the smug banking oligopoly, but we’re frequently compelled to use them.
Furthermore, much dissent doesn’t have a clear vision of what alternative is sought. This is partially due to the fact that access to financial ‘source code’ is so limited. It’s hard to articulate ideas about what’s wrong when one cannot articulate how the current system operates. Most financial knowledge is held in proprietary formulations and obscure jargon-laden language within the financial sector, and this needs to change. It’s for this reason that I’m building the London School of Financial Activism, so ordinary people can explore the layers of financial code, from the deepest layer – the money itself – and then on to the institutions, instruments and networks that move it around….”