Robin Murray spoke on the topic of the crisis and the new social economy at the Euclid Network AGM on 18 September 2009, drawing from this essay, which argues that the early years of the 21st century are witnessing the emergence of a new kind of economy that has profound implications for the future of public services as well as for the daily life of citizens.

1. Social Schumpeter: Innovation and the New Social Economy Robin Murray Euclid September 18th 2009

2. The present crisis is about a long wave transition from the 20th century paradigm of mass production, to what? to the 21st century paradigm of the distributed system economy?

3. MATURITY SYNERGY FinancialBubble Market saturation and social unrest Technologicalexplosion Golden Age FRENZY TURNING POINT IRRUPTION Crash Institutionalrecomposition The sequence of propagation has four phases and a break 20 – 30 years 20 – 30 years INSTALLATION PERIOD DEPLOYMENT PERIOD Degree of diffusion of the technological revolution Time big-bang Nextbig-bang

4. TURNINGPOINT Bubble Golden Age 1793–97 GreatBritish leap Canal mania 1848–50 Railway mania The Victorian Boom London funded global marketinfrastructure build-up(Argentina, Australia, USA) Belle Époque (Europe) “Progressive Era” (USA) 1890–95 The roaring twenties Europe1929–33 USA1929–43 Post-warGolden age Telecom mania, Internet emerging marketsand NASDAQ Sustainable global knowledge-society ”golden age”? 2000/7–? The historical record: bubble prosperities, recessions & golden ages DEPLOYMENT PERIOD INSTALLATION PERIOD 1771Britain 1829Britain 1875 Britain / USAGermany 1908 USA 1971 USA Each Golden Age has been facilitatedby enabling regulation and policies for shaping and widening markets

5. Digital economy reconfiguring production around the user. The Lego principle. Households become designers, processors and assemblers. The house becomes an office/recording studio/learning lab/doctors’ surgery/power station. Rise of distributed systems and the support economy

7. Strong social and technological tides which provide the basis for the expansion of the social economy

8. The social economy

9. i) Intractable Problems. Widespread recognition that the big issues not solvable with business as usual.

10. But the social economy is particularly well suited to tackle these issues and is the source of many innovations in these areas.

11. ii) Insistent voices, active lives. The rise of expressive culture - the post modern citizen actively searching for identity, meaning and self improvement , individually and collectively through social movements

14. New models of social provision: Open University Open College Elderpower The Key Chronic health care

16. Social economy can become an innovative driver of economic transformation in the deployment period Can do so only if conditions transformed in each part of the social economy and their inter-relations

17. State. Major structural reform - Innovation episodic and centralised. Interfaces: innovation contracting independent project boards invest to save budgeting SFI not PFI c) Design. New barefoot designers.

19. d) Formation: theory and methods e) Wiring the micro. Mondragon/Third Italy/Japanese consumer co-ops f) Conditions for household engagement and collaboration

20. Working time Lifeskills Platforms and support services Physical; space Digital spine Tax, benefits and volunteerism Distributed public facilities (local nodes)

21. Platforms – from the linear to the multi-nodal

23. Social Schumpeter Innovation in the social economy now becoming central to the future of capitalism

24. References: Christopher Freeman & Francisco Luca, As Time Goes By, Oxford 2001 Francois Jegou and EzioManzini, Collaborative Services: social innovation and design for sustainability, Poli Design 2008 Richard Koo, The Holy Grail of Macroeconomics, Wiley, 2009 Richard Lipsey, Kenneth Carlaw & Clifford Bekar, Economic Transformations, Oxford 2005 Jim Maxmin and Soshana Zuboff, The Support Economy, Allen Lane 2002 Carlota Perez, Technological Revolutions and Financial Capital, Edward Elgar 2002 Walter Stahel, The Performance Economy, Palgrave 2006 Robin Murray robinmurray(AT)blueyonder.co.uk