economy and innovation

Crowdfunding & feature saving

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The economy of functionalities consists in pooling the equipment needed by households and businesses. When users are involved in the management of this activity, the equipment is more respected and needs are better anticipated.

Moreover, managing a fleet of equipment is a business that requires very specific know-how and IT and logistics investments. There is therefore scope for the creation of new companies.

Crowdfunding allows individuals to become financially involved in businesses. The idea is therefore to encourage the creation of such businesses through crowdfunding since individuals no longer have to invest in the equipment they have owned until now.

Crowdfunding and economic democracy

The purpose of this type of financing is to direct household savings towards the real economy and more particularly towards innovative projects or projects corresponding to militant choices.

If its regulatory development continues, it will become possible for citizens to get involved in projects close to home, or close to them for emotional or cultural reasons. By getting involved in the projects, citizens will develop their sense of responsibility by getting involved beyond the financial aspects (as a prescriber, consumer, etc.).
This is why participatory financing (also called crowdfunding) is seen as the vector for the development of economic democracy: citizens have the opportunity to be contributors rather than claimants.

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The economy of functionalities: the emergence of a new profession

This economy meets a new expectation of our fellow citizens: to have a continuous supply of goods and services, without having the necessary equipment. This implies a mechanism of mutualisation: purchase and management of equipment parks, management of reservations, recovery of incidents and possibly training of users (end users or service providers for others).

This know-how is different from that usually developed by manufacturers of material goods. It is also different from that related to the distribution of products, although it is similar to the management of locations close to users.

Indeed, the economy of functionality relies for many digital. The success of Autolib relies largely on the intelligence of the system behind it. In particular, users behave well because they know that it is possible to know who has damaged a vehicle and it is possible to anticipate wear and tear.

Democratic financing for democratized goods

Even if computerisation calls for respect for the assets on a daily basis, there is a need to involve users in the management of the park in the medium term.
Crowdfunding allows users to get involved in the development and modernization strategy.

Moreover, by pooling certain assets, citizens reduce their personal financial assets. Thus, it may seem natural to them to reinvest part of it in a consumption mode that allows them to have permanently available equipment that is always efficient, that does not clutter up their homes and that can be reserved, if necessary with the competent person to facilitate its implementation.

Practical details

This is how the idea of creating a new type of business emerged: linked to a district or a homogeneous catchment area, whose vocation is to manage the pooled facilities needed by the inhabitants, to raise funds from the inhabitants to make the necessary investments and to perform all the other functions related to the provision of a pool of equipment and the corresponding skills.

The provision of skills can even be envisaged in complementary currencies since it is a localised activity where reputation favours the quality of relationships and vice versa.
The users of the property may, depending on their means and wishes, become involved as a lender or as a shareholder. There is a balance between the sums borrowed and those coming from the opening of the capital. It is impossible to be a major player. The opening of the capital and the borrowings are carried out by the variation of the stock of material.

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Leaving shareholders must sell their shares and remaining shareholders must buy them back unless new entrants come forward.

In this system, it is necessary to be able to demonstrate one's involvement in the local economy in order to be a shareholder or lender, as the notion of proximity is essential for the coherence of the model.

IT investments must be shared between these companies which are shareholders of the IT publisher or simply subscribers. Several IT service providers can position themselves on this market by complying with standards that allow them to switch from one service provider to another.

Condition for success

A traditional private company will probably do a good job of renewing the park, but the formula discussed here is based on the social bond and should therefore prove more effective, provided it is organised in a holacratic model.

Local authorities have the opportunity to encourage their creation and get involved at the outset by making available a few rented means to achieve a positive economy.

Geneviève Bouché - Contribution to the Institute of Circular Economy and Functionalities of 22/9/14

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