I write about how to start, grow and improve startups by making better things together.
How can we create a world where no one loses? In the last few months, we’ve seen politicians embrace taboo-measures they would never have considered when we started 2020. Despite years of austerity, major European institutions are now pushing to go in the opposite direction to save our plummeting economy’s demand and supply. Europe and countries worldwide have negotiated huge financial packages to support employment, businesses, and increase the support for a panting healthcare sector.
But all these measures haven’t stopped mass layoffs and thousands of company bankruptcies. The European Commission is discussing new Marshall Plans or Green New Deals. How much money goes into these programs is essential. But more important is the way we use this money to shape our next economy. These programs’ capital might not be enough to solve either our present or future social and environmental problems. The lockdown is shining a glaring light on the existing vulnerability and inequalities in our society.
The pandemic has accelerated the growth of a technology sector already growing faster than any other industry. And this growth brings two things: the fragilization of workers and the concentration of wealth towards the winner-take-all platforms and their investors.
Amazon has hired 427,300 additional employees since the beginning of the pandemic. Once the pandemic is over, this will disrupt even more of the small businesses that form our economies’ backbone and employ over 99% of the working population.
Food delivery startups’ growth is bursting during the lockdown, creating fragile and precarious jobs.
The good intentions of our recovery plans and the billions needed to recover won’t be enough.
To avoid the steady erosion of the most vulnerable living conditions and rights, our health and educational infrastructures, as well as the way we treat life on the planet we all depend on, we’re also going to need a change in the substance of our policies.
And to curb this, we need to question the status race our developed countries and companies have joined to compete to see who eats first, who creates the fastest growing ecosystems, the most unicorns, or the most billionaires.
Europe has been trying to catch up with Silicon Valley’s and China’s superpowers without success. We’ve been supporting the deregulation and platformization of our economy. And our economy keeps insisting that the goal of businesses is to maximize returns to shareholders. Not that companies are here to enable culture and support life in all its forms.
After decades of warnings, we can now see how years of growing a precarious labor market are now making it particularly hard to channel financial help to workers with fragile employment. This precarity creates a vicious cycle in which the platforms and the asset-rich companies keep getting the rewards.
Since the seventies, the economy keeps getting more efficient and generating more value, but most people are getting a smaller portion of this value.
The rest of the value is siphoned upward to the few and wealthy persons and countries. More than pleasing customers, more than creating jobs, business keeps getting better at serving the single-minded goal of maximizing shareholder value — the rewards for those who already have more than they need to keep investing.
And Europe and the UK have been trying to catch up and counterbalance the American and Chinese dominance built on top of their technology organization like the GAFAM (Google, Apple, Facebook, Amazon, Microsoft) and its Chinese equivalent the BATX (Baidu, Alibaba, Tencent, and Xiaomi) by trying to create their unicorns.
First, Europe’s market is fragmented in its politics, regulations, and languages and won’t out fund and outpace Silicon Valley. And it won’t be able to out control the authoritarian Chinese plans. Second, Europe might never get there. The Chinese economic recovery might make it easier and cheaper for them to buy parts of the European economy. And third, let’s imagine that European countries succeed in dominating the world, and getting our growth back. This growth would only lift the European boats, but what about leaving the unaddressed ground conditions of problems more widespread than the coronavirus, like hunger, homelessness, ecological collapse, or gender and financial inequality?
For example, last year, according to the FAO, five million children worldwide died of hunger. That is 30 times more people than have been killed so far from Covid-19, yet no government has declared a state of emergency or asked that we radically alter our way of life to save them.
Nor do we see a comparable level of alarm and action around suicide — the mere tip of an iceberg of despair and depression — which kills over a million people a year globally and 50,000 in the USA. Or drug overdoses, which kill 585,000 globally, the autoimmune epidemic, which affects 23.5 to 50 million in the US and between 14.7 to 23.5 million people in Europe, or obesity, which afflicts well over 750 million worldwide.
The point here is not that coronavirus isn’t so bad, and we shouldn’t do anything, but that we should pursue choices that go against the ground conditions that multiply those very dangers we’ve gotten used to.
We have two choices. We can either return to our business as usual and keep racing to the top and let those who don’t reach the top fighting for scraps. Or we can also decide to flip the script by lifting everyone’s boats and creating a society where everyone can participate, contribute, and reap the rewards of our economies equitably.
The first ingredient to enabling people to participate, contribute and shape our economy equitably depends on incentivizing open source from our governments, research institutions, and companies.
In 1993, Tim Berners Lee put the web into the public domain, a decision that has fundamentally altered our society and created trillions of pounds in economic opportunity worldwide. This choice for the public domain showed the potential for creativity when users have open access instead of only well-funded corporations.
In 2010, RISC-V started an open-source hardware architecture project to build microprocessors and chips. This project started in the US and could now be a boon for European industries. This project’s openness allows any company or research group to design their RISC-V processor without having to pay royalty fees for their use. If they don’t want to have their chip, they will have at their disposal a much broader market that doesn’t depend on one or a few brands. According to Lluís Teres, an expert in micro-electronics: “There will be more suppliers, greater diversity and, consequently, more competition and prices adjusted to the quality of supply and demand.”
Before the pandemic broke out, the expectations were very promising: the forecasts estimate that RISC-V will increase its overall revenue from $52 million in 2018 to $1.1 billion in 2025.
And at a business level, open-source organizations are a real alternative to the American and Chinese winner-take-all organizations because they are naturally able to build their network effects.
Linux, WordPress, or Odoo are all open organizations worth billions of dollars in valuation.
Linux and its derivatives have 99% of market share among supercomputers, 66.6% of servers, and 76% of smartphones, outcompeting powerhouses like Microsoft or Apple. WordPress fuels more than a third of the web and gets equivalent traffic levels as Google, Facebook, or Twitter with ten to a hundred time fewer employees. Odoo, an open-source alternative to SAP, grows at 60% per year by serving 4 million users who want to keep control over their code and data.
And although their market value is smaller than the GAFAM or the BATX, what’s even more important is that these businesses enable open ecosystems of hundreds of thousands of SMEs worldwide to create even more value. WordPress, for example, is valued at $3 billion. Still, estimates show that its open-source solution has enabled markets worldwide to generate $143 billion in revenue every year from their community members.
These principles of openness also apply to offline and non-tech businesses and organizations. Now that there are so many off-the-shelf solutions to share knowledge, gather communities, and get any business online, there are new kinds of small organizations that will sprout and collaborate to develop themselves.
Brewdog imported the lessons learned from open technology to the more traditional beer retail market with brilliant results: thanks to its open and community-based ethos, it has been the fastest-growing company in the UK’s drink industry.
Today, European programs like Opennext help hardware SMEs do two things, build an open hardware infrastructure, and transition to open source so they can spread and reinforce their business models sustainably.
Spreading this open approach will enable a burst of creativity, recombination, and new possibilities that will benefit us all.
But there is a caveat for this to work equitably since open-source knowledge and collaboration won’t be enough, even if this is a business strategy that works. Most people who can contribute to open source already have enough money and time to contribute and volunteer in projects they like. Everybody else has to work on projects that pay the bills, not projects that contribute to our common good and creativity.
Without these conditions covered, it’s nearly impossible to get people to contribute and collaborate on creating long-term solutions to help weather future pandemics, climate change, gender, regional and financial inequality, hunger, and so many other essential but “non-urgent” crises.
So what if we accelerated this transition by creating widespread Universal Basic Income (UBI) programs?
Pope Francis, Twitter’s CEO, or the Spanish government are all proposing to roll out UBI programs. And among the initiatives that go beyond proposals into concrete action, Australia has unlocked $130 billion, up to $1,500 per employee, to prevent millions of people from losing their jobs to the coronavirus pandemic.
Studies show that it’s possible to fund a UBI, making it possible for people to spend more time looking for higher-paying and more meaningful jobs that better use their skills. Beneficiaries can go back to school and improve their skills, and newborn parents can spend more time with their newborns during parental leave.
During Thatcher’s tenure, The Enterprise Allowance Scheme started in 1981, offered those of working age who wanted to start a business an allowance of £40 a week — the equivalent of £154 a week in 2020 — a financial floor they could stand on. The results? The program helped 325,000 people become self-employed, and according to participant testimonies, without the program, the resulting businesses either would have come significantly later or never existed at all. The explosion of creativity that marked the 1990’s and 2000’s was led by creatives like Alan McGee of Creation Records, Julian Dunkerton of Superdry, and the Turner Prize-winning artist Jeremy Deller, who were able to strike out on their own through the ‘Enterprise Allowance Scheme.’
Giving people free money can help vanquish poverty, lessen inequality, and liberate time and creativity. But under what terms would governments or companies deliver it? In our economic past, we have learned that shared prosperity only really comes with shared power.
And this is another brick we need to build a more egalitarian society. A society where everyone can both contribute to our shared well-being and hold companies accountable for their actions.
When slavery was abolished, the slaves didn’t just want the means of consumption. Some demanded 40 acres of land and a mule because they wanted the means of production to help shape the economy. To keep their freedom from getting snatched away again, they knew they had to be owners.
And this is why an open and participatory intellectual property and universal basic income won’t be enough. The current winner-take-all platforms are built on top of open-source software and don’t give back nearly as much as they’ve extracted from the creators of this common good. We need to foster the shared ownership, and governance Coops have been pioneering for decades.
Those who are building and stewarding vast platforms have become our new elites. These leaders often use the language of the crowd — “sharing,” “open,” “connected” — but their actions can tell a different story. Think of Facebook. Despite its influence on our democracies, moods, and self-esteem, Facebook’s two billion users get no share of the platform’s vast economic value. Nor any say in how it is governed.
Coops have been historical vehicles that brought life-changing utilities like electricity or internet broadband to people in rural areas that investor-owned companies wouldn’t serve. Instead of giving the lion’s share to its investors, coops spread the rewards equitably amongst their members. And today, in opposition to the race to the bottom led by most freelance platforms like Upwork or Fiverr, we see platforms like Stocksy United, a stock photography platform, retain some of the best stock artists by putting fair pay and excellent work at the center of their mission.
We need to build businesses that are genuinely accountable to those they claim to serve, for instance, their employees and their customers. As long as companies are responsible for just wealth and not participation, inequality will concentrate among investors in wealthy countries. And we won’t be able to create a decentralized economy where people can keep the wealth they make locally.
Businesses, governments, citizens, and consumers have the opportunity to make the most of our connection economy to push for a culture and economy where creativity is open, where the money is accessible and where consumers and workers can influence governance and ownership. Together, we can untap the potential to create a flurry of creativity, make the accountability necessary to veer off our destructive environmental and democratic course, and spread the knowledge and participation that can lift not only the European boat but also everybody’s boats.
And for this, we’re going to need European governments to push the Green Deals, and Marshall Plans even further. They need to double down on funding and structuring open-source research and their creators, setting up large scale Universal Basic Income experiments, and making it easier to build and run cooperative-like businesses. These will make it possible for consumers and employees to hold corporations accountable to those they serve. In return, it will spread the rewards more equitably to all stakeholders, not only to investors.
This path has the potential to build a new and more generous leadership that goes beyond our regional competitions.
Leadership with no losers can regenerate our communities, creativity, and life on our planet.
Thanks to Arlette Manasseh, Martin Hauer, Marcus Fulker, Scott Santens, and Nathan Schneider for their contribution and inspiration to this article through their writing, feedback, and books.
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