Scottish expert advisory panel on the collaborative economy: evidence paper

7. Public and social value

The fifth and last evidence session of the Scottish Expert Advisory Panel on the Collaborative Economy in October 2017 focused on the wider implications of the collaborative economy and, in particular, public and social value. Agenda and minutes of the meeting, as well as any submissions received, are available online.

a. Background

The commercial sector has been highly successful in exploiting the power of digital technologies to enable people to participate in the collaborative economy. There has been significant investment in new marketplaces to share homes and cars, enabling people to make and save money.

Meanwhile, where there has been debate around the social – rather than economic – value of the collaborative economy, this has largely focused on how these commercial platforms impact on issues such as workers’ rights, affordable housing or tax collection. However, it would appear that very little attention has been given to how peer to peer platforms could be harnessed to deliver public benefits.

In November 2016, a survey of UK adults found that while just nine per cent of Brits had used a ‘sharing economy’ platform for ‘a good cause’ in the previous year, nearly a quarter (22 per cent) would be interested in using one for this purpose in the future ^[39] . This shows that there is an appetite for digital platforms that do something different from booking a ride or a bed for the night.

There are some inspiring examples, such as GoodSAM, a service that automatically alerts nearby first-aid responders when the emergency services are called to a cardiac incident. GoodSAM saves lives by shortening the time before life-saving treatment can be administered, and there is potential for expanding this service to cover other kinds of emergency.

There has also been a rise in the number of collaborative platforms focusing on the provision of care. This is a crucial issue in a time of an ageing population, when families often live far away from ageing relatives and there has been a reduction in state provision of care as well as a scarcity of quality in-home care workers. A pioneer in this space is TrustonTap, a platform that bypasses the traditional care agency model and connects self-employed care workers with people in need of care in Oxfordshire.

ShareSomewhere applies the ‘Airbnb’ model to sharing under-used community spaces. This initiative is hosted by Youth United, a network of the UK’s largest and most established voluntary and volunteering youth organisations. The group are developing a platform that makes it easy for voluntary and community groups to hire out low-cost and under-used spaces on a one-off basis. It is running pilots across Manchester and Cheshire and is planning to expand UK-wide.

Transport is another area where commercial collaborative platforms, such as Uber and Lyft, have introduced a wave of disruption. LiftShare, however, looks at this area from a different angle and is testing how a variety of community transport services in the Norwich area can collaborate, working together to fill empty car seats, serve more routes, and also contribute to alleviate the social isolation felt by some vulnerable people.

There are also a range of niche platforms supporting more specific needs. Hearts Milk Bank has developed an app for their existing breast-milk donation service, to simplify and expand the donation of safe, screened breast-milk to premature and sick babies in UK hospitals. This is an example of an existing, much needed service that can be expanded and delivered more efficiently through a digital platform.

The above are just a small sample of the examples available, as there is no shortage of creative thinking around alternative ways to approach social challenges. Scotland has a rich and proud tradition of collaboration at community level, although it has not yet realised the potential of new technologies in supporting this.

Over many decades, enterprising communities in Scotland have helped to pioneer new models of social and economic co-operation. These have enabled local people to come together to co-operate, pool and collaboratively consume resources, and in doing so make life better for each other.

This innovation has taken many forms, from early action through rural community co-operatives, housing co-operatives and credit unions in the 1970s, through to Local Exchange and Trading Systems ( LETS) Time-banks, community food co-operatives, toy libraries, community transport initiatives, shared care schemes, community co-operatives, and co-working spaces.

The principles and potential of co-operation at the community level run deep, and have been accelerated by provisions made in the Community Empowerment (Scotland) Act 2015 and activity funded through the Scottish Government under its responsibilities and programmes for Community Empowerment, Regeneration, the Third Sector and Equalities. This has given rise to an extensive ecosystem of support for community-led enterprise and community co-operative activity. By way of illustration:

• There are firmly rooted community sector networks. The Scottish Community Alliance ^[40] comprises 18 independent, national community networks connecting and supporting over 2,000 local groups and movements working towards shared goals in social housing, community transport, community energy, voluntary arts, community woodlands, development trusts, community food and growing activity, and the management of community resources.
• There is a publicly funded network of support for the voluntary sector. Nationally the lead body is the Scottish Council for Voluntary Organisations ( SCVO). There is also a network of 32 local Third Sector Interface organisations, which provide a source of local representation and support to voluntary organisations, volunteer centres, and social enterprises. This network is supported by Voluntary Action Scotland.
• There is a well-developed ecosystem of support for social enterprises. This includes support from three national representative bodies – Social Enterprise Scotland, Social Firms Scotland and Senscot (which itself supports 24 local and thematic Social Enterprise Networks across Scotland). The sector also enjoys support from a national social enterprise start-up agency (Firstport), a national leadership and learning academy (Social Enterprise Academy) as well as a long-standing national programme of specialist business support (Just Enterprise).
• There is also excellent support available for employee-ownership, collaborative business models and a growing number of community co-operatives. Principally this support rests with Co-operative Development Scotland.

This supportive ecosystem is fuelled by responsive forms of finance from a network of social investment intermediaries (e.g. Social Investment Scotland), specialist and mainstream lenders, and enterprising grant-making foundations. Scotland is generally recognised to be a model of good practice in relation to the availability and deployment of social finance.

Despite strong roots, inspiration from proven online models, and the availability of investment and support, there has been relatively limited experimentation in the collaborative economy. There are of course exceptions, with notable activity from the ALLIANCE ( ALISS platform), Community Enterprise (various platforms), and Community Shares Scotland.

Scotland’s Social Enterprise Strategy 2016-26

Social Investment Scotland ( SIS) defines social enterprises as “ organisations that trade for the common good, address social needs, strengthen communities, improve people’s life choices, and protect the environment”.

The Scottish Government has been involved in supporting social enterprise activity for over a decade. More recently, the Scottish Government, alongside sector leaders, developed a ten-year strategy, entitled ‘Scotland’s Social Enterprise Strategy 2016-26’, which set policy objectives that would support the social enterprise sector in Scotland.

The framework identified key policy areas, such as business support, innovation and sector collaboration, incubation and acceleration, and leadership development. Commitments were also made in the area of social finance, unlocking and supporting new ways for social enterprises to access sustainable financing to scale their businesses. Moreover, social finance also targeted support for organisations who provide means to affordable credit for those otherwise excluded or disadvantaged from traditional means of credit.

The Scottish Government also developed a strategy targeting international development. Chiefly, its main role is to incubate social enterprises who might wish to expand into global markets, and provide scaling support who want to either, increase their volume of export, diversify their markets, or a combination of both.

The latest document published by the Scottish Government in this space, in early 2017, was the Social Enterprise Action Plan. This is the first of three action plans to be delivered by 2026. This document identified 92 actions required to achieve the policy goals of the Strategy. This include a specific action to bring forward new approaches to support peer to peer connections between social enterprises using collaborative technologies and ensure that more social enterprises benefit from digital business support.

b. Scotland specific data

A sector-wide census of social enterprises in Scotland, conducted in 2015 and again in 2017, found that:

• There are 5,600 social enterprises in Scotland, of which 3,692 are urban and 1,908 rural, up from 5,000 in 2015;
• Collectively, and including credit unions and housing associations, they contribute over £2 billion to the economy;
• They employ 80,000 full-time-equivalent people;
• 7% trade internationally;
• 64% have a woman as their most senior official; and
• 72% pay their employees at least the Living Wage.

SIS is Scotland’s largest, and one of the UK’s largest, Responsible Finance Provider, who lends money to charities, community organisations and social enterprise. Since 2001, it has made almost 300 social investments for a total amount of £60 million, an average of £200,000 per investment. It is estimated that over one million people in Scotland have benefitted from the activities of SIS.

c. Opportunities and benefits

The evidence submissions to the panel highlighted a range of opportunities and benefits in relation to the creation and provision of public and social value through the collaborative economy:

• Opportunity to employ public assets and resources more effectively, putting the idle capacity of vehicles, land, equipment, and buildings into collective use (where these are used infrequently, the costs of purchase or maintenance are high, and outright ownership is not essential), and pooling or exchanging resources such as staff skills, time, money, and services (where these are relatively easy to share or distribute).
• Opportunity to build on existing networks and co-operation to unlock resources, drive down costs, and stimulate innovation while keeping money circulating within the community.
• Support in the provision of transport for health and social care, non-emergency patient transport and community transport. Various networks and projects are already in place to support asset sharing in relation to transport, and the collaborative economy provides an opportunity to build on this work, improving both access to employment and services in rural areas where public transport is limited.
• Opportunity to enable individuals and communities to play a stronger role in the design, development and provision of public services, and management of public assets, dispersing power and helping develop fairer practices.
• Opportunity to support more cross-sector working in the provision of services, including the provision of social care services, and to enable sharing of assets by third and social enterprise organisations.
• Potential to support broad societal benefits. Co-operatives UK noted that “ the growth in the collaborative economy creates opportunities for citizens, communities and businesses to build a genuinely inclusive economy, where power, opportunity and wealth are shared more broadly, and to address some of the key challenges of our time: inequalities in opportunity, income wealth and economic power; environmental crises; pockets of long-term economic decline and persistent deprivation; fragmented communities; and socio-political disillusionment and discontent”.
• Potential to enable those on low and middle incomes to use assets that they may not be in a position to purchase outright.
• Opportunity for greater collaborative working to build social capital across Scotland’s communities, enabling them to play a stronger role in shaping public service provision and economic strategy.
• Opportunity to use the collaborative economy to facilitate data sharing, supporting innovative ways to create social value. Cooperatives UK suggested that, “ as a more digital government generates a huge amount of very valuable data”, there is an opportunity to “ release it open source and thus increase the opportunities for citizens and businesses to use it collaboratively for shared economic and social advantage”.
• Opportunity to learn from the success of commercial platforms to develop “ public collaborative platforms that build upon the technological advances made by other popular apps”, as suggested by Dr Dominic Chalmers, from the University of Strathclyde.

A number of examples of collaborative platforms providing public and social value were provided to the panel:

• Edinburgh Tool Library provides shared access to expensive tools and equipment;
• Ascus Art & Science hosts an open-access lab in Edinburgh, which enables community members to use valuable lab equipment;
• Edventure Frome , in Somerset, allows the redistribution of excess food;
• Live Better With Cancer helps people with cancer across the UK to identify products that can help them easing symptoms and side effects;
• every LIFE, also operating UK-wide, provides intelligent care management by eliminating paperwork and reducing the risk of medicine mismanagement through real time delivery and analysis of digital care notes; and
• Peerby and Shareyourmeal are international platforms that enable neighbours to, respectively, borrow things from each other and share home-made meals.

d. Challenges and barriers

A number of potential challenges and barriers to growth were identified in relation to using the collaborative economy to create social value and support public services:

• Potential need of financial subsidies to ensure that schemes are sustainable, where these schemes are effectively filling gaps in public service provision. Social enterprises (and the wider community and voluntary sector) are becoming increasingly stretched and financially fragile ^[41] .
• Need for sufficient and appropriate access to finance. In particular, as noted by SIS, “ via appropriate and patient capital that supports growth and scale, be that patient debt or mission aligned equity”.
• Need to ensure that any regulation of profit-making parts of the collaborative economy does not disadvantage pure ‘sharing’ economy organisations that provide social value.
• Need to ensure that collaborative organisations providing social value can scale up without losing their social focus.
• Potential for collaborative platforms supporting public services – such as enhancing or extending public transport provision, and improving connectivity of rural or disadvantaged communities – to end up competing directly with existing public transport providers, with a risk of undermining or reducing investment in essential public services.
• Potential need to adapt existing public procurement processes to support new business models associated with the collaborative economy. ShareNL noted that “ platforms that are creating a lot of social value are not yet matching too well to governments, whilst in many cases they are fulfilling goals set by governments”.
• Potential incompatibility between the flexibility and autonomy of self-employment and the delivery of essential public services.
• Challenge of matching supply of and demand for the services provided by social platforms. Dr Dominic Chalmers, from the University of Strathclyde, noted that “ in order for any of these platforms to scale, a degree of streamlining and sophistication in demand management is required”.