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Notes from 2018 Platform Co-operatives conference

Notes from 2018 Platform Co-operatives conference

Thanks to the Business Council of Co-operatives and Mutuals for arranging for me to attend the annual Platform Co-operativism conference in Hong Kong. Following are some the things we learned at the conference…


 

Co-operatives tend to mirror their cultural context. Their democratic nature allows them to escape the homogenising demands of capital and to focus on the different ways value can be delivered to their members and communities. So it was not so surprising that the annual Platform Co-operativism conference in Hong Kong was notable for the many faceted ways that platform co-operatives are developing across the globe. They may have a common gene pool but the way it is expressed is very much a reflection of the community that they serve.

Defining the space

A common definition of platform co-operatives is still emerging.

Trebor Schultz (the New School) as the primal protagonist of the Platform Co-operativism movement spoke to the very tangible ways that work is being done to build momentum. This includes projects around the Platform Coop Development Kit that are at the vanguard of change to create open-source software by industry sector and by common function. It’s a very utilitarian definition of platform co-operatives.

In line with these developments, Danny Spitzberg (CoLab) suggested that perhaps it makes more sense to talk about ‘co-operative platforms’– that they are not a new type of co-operative but a specific way to organise a technology platform. They represent the opportunity for the value of a platform’s network, whatever its size, to be retained by its users rather than passed over to profit-motivated shareholders. This makes intuitive sense, as unicorns can only exist if they are able to capture the lion’s share of the network value they catalyse.

The nature of the network was also pivotal to Michel Bauwen’s (P2P Foundation) thinking around the trends he sees emerging in the co-operative sector. In a wide-ranging talk, he mapped co-operatives against two axes – with distribution of value contrasted against their reach:

 

MIchel Bauwen's coop quadrant

 

This approach takes a narrow definition to ‘platform’ – limiting platform co-operatives to the ‘for-profit and centralized’ quadrant – which then enables Michel to distinguish between other network enabling technologies:

  • Platform coops – are primarily digital marketplaces
  • Ledger coops – are technologies that enable distributed capitalism
  • Protocol coops – are open design repositories for common infrastructure development
  • Cosmo-local coops – are urban commons projects that can use shared technology

For the purposes of this note, we’ll adopt a simple definition that co-operative platforms (aka platform co-operatives) include all those co-operatively owned technologies that enable communities to create online networks.

 

Sharing technology

There is a willingness for co-operatives to share platform technologies across borders.

One of the benefits of being a global conference is that could draw on the latest thinking and developments from a wide variety of industry participants. And as co-operatives are pretty good at sharing, it offers a way for the sector to foster development across borders.

But while platform technologies are generally portable by nature, the way they can be shared will depend on the economics and structure of the networks that they enable. So there were examples at the conference of open-source codebases, hosted software-as-a-service options; peer-to-peer licensing for sharing of code between members; and, proprietary closed software platforms that were owned by cooperatives.

Similarly, the reach of the communities that use a technology can define how platforms can achieve scale and therefore the way they might be shared – from platforms that are defined by an industry or function and that can be adapted to meet local needs, to placed-based co-operatives that seek to take advantage of common infrastructure platforms.

We can see these factors being played out in the different co-operatives that presented at the conference.

Open-source platforms

This approach is exemplified by the work that the New School is doing with SEWA to create a platform to assist beauty workers in India. Similarly, CoopCycle has created open-source software that enables worker coops to create their own local bike sharing schemes. By solving for a specific problem and making the solution open-source, it is hoped that these platforms can be picked up and developed to meet similar needs in other parts of the world.

SAAS platforms

Open source software has it limitations, particularly as it still requires that each instance is customised and maintained to meet local needs. For this reason, another way of targeting scale efficiencies is by creating hosted solutions that offer more plug’n’play type functionality. For example, Sharetribe – which enables communities to create their own labour or product hire markets – is a co-operatively owned platform that offers hosted, customizable services.

Special purpose platforms

And then there are the platforms that offer services that meet the specific needs of communities of interest. Their technology platforms tend to be highly customised to the circumstances and target scale at the nation-state level. For example, a worker co-operative like SMart offers very sophisticated back-end support for skilled freelancers. It needs to be specifically customised to the regulatory framework of the region it operates in. Similarly, NeedsMap – which connects donors with communities in need – maximizes its effectiveness when it can match needs on a country-wide scale.

Infrastructure platforms

Finally, there are the platforms that are developing capabilities that can support co-operatives regardless of their purpose or structure. These are platforms that are aiming to create common infrastructure. So for example, Coop Exchange is aiming to make it easier for co-operatives to raise funding. Similarly, Geddup is being developed to support distributed organising and governance in co-operatives. Interestingly, Geddup takes a blended approach to sharing the technology as it is being created as an enterprise coop where its members are large organisations that require their own instances, and it also makes a hosted ‘community’ version available to smaller organisations.

 

Sharing value

The sharing of value across different stakeholders remains a challenge for the sector.

One of the underlying themes of the conference was the question of how value is shared between founders and investors of a platform on the one hand, and its users on the other. It’s a foundational issue. Notwithstanding their democratic approach to the distribution of value, platform co-operatives still need to find ways of attracting the resources required to foster development.

To resolve this challenge, some platforms have sought to align interests by promising to share surplus with founders and investors subject to pre-defined constraints. For example, Fairmondo’s model is to allocate slices of equity to founders and investors, but to also place limits around individual shareholdings, salaries and dividends paid. Notably, Coop Exchange is seeking to free up investment in the sector by promoting a standardised methodology for sharing value based on the Fair Shares model that rewards investors, founders and users.

These concerns are not just limited to multi-stakeholder co-operatives. The sharing of value between members based on patronage or other metrics can give rise to wide dispersion of returns. The debate around these issues suggests that this remains a key focus for platform co-operatives to address both at their founding and as they grow.

 

Sharing Data

There is plenty of scope for the cooperative sector to work with data.

The conference showcased some cracking examples of how data sharing and analytics can change communities:

  • PetaJakarta showed how using open source software (Cognicity), they had been able to change the way Indonesia could respond to flood events
  • The Alliance of Foodbanks from Taiwan illustrated how data had radically improved their efficiency in collecting and distributing food across their networks
  • Shanzhai City is developing tools to measure impact of social investing that can be embedded in the funding structures themselves via smart contracts
  • Datavest illustrates a data cooperative approach to helping members realize the value of their data

Notwithstanding these examples, there remains an underlying concern about how data is managed by co-operatives and the potential role of emerging technologies in augmenting this. In particular, there was some deep suspicion around blockchain approaches to solving problems.

My view is that co-operatives, with their focus on individual agency within a collective structure, are ideally placed to help with the transition to a data-driven economy. The big technology companies are already well advanced in developing algorithmic ways of interacting with the disempowered consumer. Co-operatives that can understand and develop event-driven solutions, while still enabling members to retain control over their data, offer a very healthy alternative approach.

 

Conclusion

The conference was a brilliant hotpot of fresh ideas. In our own corner of the world, it’s already lead to the introduction of a few of these international efforts into the Australian market. We look forward to seeing where the movement has taken us next year.


 

 

Trending coops & mutuals in Australia

Trending coops & mutuals in Australia

Hard data on co-operatives and mutuals in Australia is a little scarce. Perhaps it’s because they cover so much territory – from the very large to the very local. So some quick cuts from the CME database.

Not surprisingly the location breakdown of CME’s pretty much echos population density…

And the type is interesting insofar that if we mapped the same by assets or revenue rather than sheer number of entities, then it would be the exact opposite – superannuation funds would be the largest by a fair margin, then health funds… and coops.

 

What perhaps is more interesting is seeing how the breakdown by industry maps to emerging trends in the sector:

Emerging trends – consumer coops

  • Community owned assets – The Housing and the Sports & Recreation sector are the most numerous by far – with groups as diverse as model railway operators to the Hells Angels using coops. They often use coops as a mechanism to gather management and ownership of shared infrastructure.  We’re seeing emerging interest in the coop housing sector for this purpose from specific demographics such as aged care or respite.
  • Shared financial services – still going strong when it comes to aggregating consumers money with financial services (aka credit unions, building societies, mutual banks etc), health insurance, superannuation funds. Merger activity and rebranding is often leading these entities to become increasingly remote from the constituencies that created them.
  • Education, Training & Childcare – numbers are swelled by public schools using favourable legislative treatment to create coops for building projects. Having said that, the childcare sector is another where workers and community can come together the use the coop structure to deliver better outcomes.
  • Information & Media – the community radio sector in Australia is huge with some 22,000 volunteers contributing over $300m in value to the community. Notably, the local and community nature of these operations has provided natural protection against the disruption that has been rippling through this sector.
  • Retailing – community ownership of retailers is a growing category of coops. So while most retailing coops are community owned stores there is also an emerging recognition that promoting consumer-ownership is the best defence against online disruption. If we follow in the footsteps of the UK, then we can expect more retailers to be acquired via coops – such as pubs, service stations, your local bakery.
  • Utilities – current energy retailers are pricing their offers to promote the emergence of community owned energy providers. We’re seeing wide interest across Australia in renewable energy projects that are likely to leverage the coop model.

Emerging trends – producer coops

  • Agribusiness and Fishing – Some of Australia’s more prominent agricultural coops were demutualised recently (Murray Goulburn and Namoi Cotton). Whether their members were better served by the coop structure is a moot point. Conversely, the federally funded Farming Together Program has sparked another crop of coops into existence. They are yet to appear in the data. Perhaps the biggest emerging trend is this sector is the wave of new technology that is being propelled at farmers. The potential impact on farmers has encouraged many to consider the role of coops in helping them manage their data both individually and in aggregate.
  • Arts & Culture – with 8% of the Australian workforce now part of the gig economy, we are expecting to see the arrival of platform coops that can help these workers to aggregate their needs and better protect their interests. As the Arts & Culture sector has a long history in using coops to manage resources, they could be well placed to emulate the SMartEU and Stocksy models in Australia.
  • Wholesalers, Professional Services, Purchasing Services & Shared Services – the industry aggregator coop remains alive and well despite the best efforts of Amazon.

 


 

What is good data governance?

What is good data governance?

Governance is a hashtag that has been growing in popularity.  So it’s great to see the coop sector responding with the BCCM’s impending release of Co-operative and Mutual Enterprise Governance Principles for the Australian co-op and mutual sector. And folk like Coop News dedicating a Governance Edition to analyse the subject.

We’re interested in how this emerging thinking applies to data.

Data governance is the mechanism through which values and expectations with respect to data can be translated into effective management practices.

Good governance is a function of the clarity of shared intent and trust in expected behavior. As Dee Hock writes: “This is not to say that contracts, laws, and regulations do not serve a purpose. Rather it is to point out that…rules and regulations, laws and contracts, can never replace clarity of shared purpose and clear, deeply held principles about conduct in pursuit of that purpose.”

By these definitions, good data governance is broader than legal frameworks or codes of practice – it bridges the gap between the expectations and values that folk have with respect to their data, and the mechanisms by which these are made tangible. It encompasses legal documentation and decision-making protocols that are agreed between the actors involved. And it includes the social interactions that enable these to be made real.

The Cambridge Analytics seraglio exposed the under-belly of the market that preys on our data. And the GDPR has done wonders for focussing attention on data management practices. Next step is to get some clarity around the governance practices that will lay the foundation for better matching of expectations with practice.

PS – An example of a emerging model for personal data, Sovrin have a pretty comprehensive Trust Framework