It's NOT about 'jobs', stupid.

The RSA event advertised in our last post, Can Online Markets Tackle Poverty? was a rallying cry for Whitehall to get over their fixation with creating 'jobs' and start focussing on using technology to develop existing economic activity.

The RSA event advertised in our last post, Can Online Markets Tackle Poverty? was a rallying cry for Whitehall to get over their fixation with creating 'jobs' and start focussing on using technology to develop existing economic activity.

As Jerry Fishenden(Centre for Technology Policy Research) put it: "The state's idea of what a 'job' is is constraining productivity" and Wingham Rowan(Silvers of Time Working) added that "local authorities are beaten up by Whitehall on job creation" (thereby constraining attempts to create more flexible labour markets).

The problem is not jobs as such, but untraded resources, especially time. The focus should be on how we better harness and develop existing economic activity and help people earn money, rather than how to create 'jobs'.

So how can we help people earn money? Who are 'they', and what is stopping them? It seems they tend to work at the lower end of the economic spectrum, functioning in what Wingham Rowan called unfocussed markets, where the conditions for the demand and supply of labour are fuzzy and changeable, and buyers and sellers can't find each other(the exact opposite of the more efficient targetted markets- the kind that traders operate in).

Think baby sitters, people wanting to borrow a bike, others wanting to borrow a tenner to pay back the next day etc. There is lots of such ad hoc economic activity.., things hired, time offered, money lent, and many can do work of this nature who can't fit in to a job structure.

The solution lies in new technology that we know to work well calledNEMs: National E Markets. Think Ebay writ large and better regulated.  Slivers of Time working is an exmplar in this field, but merely one example of a much wider and still under-utilised phenomenon.

I liked the example given by Wingham Rowan:

If you suddenly need a baby sitter, you might be horrified of looking for one online, but you don't need to merely post an add on a random website. Instead you have access to a focussed market where you can see existing baber sitters, be certain that they have the relevant  CRB and ISA checks completed, have a certain amount of experience and references etc. You can aslo narrow your search to find baby sitters who have worked in your area, or with people you know. The technology can do all this hard work for you, and tell you exactly how much it will cost. You get meaningful data immediately- the kind you need to take a quick decision, just like traders do all the time... so, strange though it may seem, NEMs become a very safe way to get a baby sitter. And of course, from the baby sitter's perspective, they are not locked in, not forever doomed and blessed to have the 'job' of being a babysitter, but being one as and when it suits.

How can such a system we brought into being? The most likely scenario would be that, as with the National Lottery, the private sector would fund these markets if Government could put the conditions in place.

The technology is not the problem, the problem is political will and bureaucratic inertia. The British welfare system has a binary view of being in work or out of it. If you can only earn £25 a week before your benefits are cut, you are implicitly encouraging people to work in the informal economy, or to put it more sharply, the black market. (And in this respect, Mathew Taylor commented that while working in goverment he noticed the strange reluctance of politicians and civil servants to even talk about the informal economy; "nobody wanted to go there".)

The Government needs to work much more with the natural behaviour of people. Selling time and possessions, rather than products as such, is very difficult to regulate, tax etc, but it can and should be done.