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This is about a hidden corner of the labor market.

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It's the world of people who need to work ultra-flexibly,

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if they're to work at all.

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So think, for instance,

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of someone who has a recurring but unpredictable medical condition,

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or somebody who's caring for a dependent adult,

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or a parent with complex child care needs.

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Their availability for work can be such that it's,

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"A few hours today.

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Maybe I can work tomorrow, but I don't know if and when yet."

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And it's extraordinarily difficult for these people

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to find the work that they so often need very badly.

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Which is a tragedy because there are employers

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who can use pools of very flexible local people

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booked completely ad hoc around when that person wants to work.

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Imagine that you run a cafe.

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It's mid-morning, the place is filling up.

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You're going to have a busy lunchtime rush.

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If you could get two extra workers for 90 minutes

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to start in an hour's time,

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you'd do it, but they'd have to be reliable, inducted in how your cafe works.

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They'd have to be available at very competitive rates.

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They'd have to be bookable in about the next minute.

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In reality, no recruitment agency wants to handle that sort of business,

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so you are going to muddle by, understaffed.

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And it's not just caterers, it's hoteliers, it's retailers,

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it's anyone who provides services to the public or businesses.

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There's all sorts of organizations that can use these pools of very flexible people,

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possibly already once they've been inducted.

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At this level of the labor market,

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what you need is a marketplace for spare hours.

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They do exist. Here's how they work.

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So in this example, a distribution company has said,

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we've got a rush order that we've got to get out of the warehouse tomorrow morning.

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Show us everyone who's available.

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It's found 31 workers.

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Everybody on this screen is genuinely available at those specific hours tomorrow.

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They're all contactable in time for this booking.

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They've all defined the terms on which they will accept bookings.

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And this booking is within all the parameters for each individual.

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And they would all be legally compliant by doing this booking.

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Of course, they're all trained to work in warehouses.

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You can select as many of them as you want.

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They're from multiple agencies.

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It's calculated the charge rate for each person for this specific booking.

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And it's monitoring their reliability.

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The people on the top row are the provenly reliable ones.

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They're likely to be more expensive.

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In an alternative view of this pool of local, very flexible people,

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here's a market research company,

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and it's inducted maybe 25 local people in how to do street interviewing.

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And they've got a new campaign. They want to run it next week.

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And they're looking at how many of the people they've inducted

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are available each hour next week.

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And they'll then decide when to do their street interviews.

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But is there more that could be done

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for this corner of the labor market?

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Because right now there are so many people

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who need whatever economic opportunity they can get.

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Let's make it personal.

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Imagine that a young woman -- base of the economic pyramid,

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very little prospect of getting a job --

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what economic activity could she theoretically engage in?

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Well, she might be willing to work odd hours

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in a call center, in a reception area, in a mail room.

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She may be interested in providing local services to her community:

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babysitting, local deliveries, pet care.

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She may have possessions that she would like to trade

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at times she doesn't need them.

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So she might have a sofa bed in her front room that she would like to let out.

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She might have a bike, a video games console she only uses occasionally.

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And you're probably thinking -- because you're all very web-aware --

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yes, and we're in the era of collaborative consumption,

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so she can go online and do all this.

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She can go to Airbnb to list her sofa bed,

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she can go to TaskRabbit.com and say, "I want to do local deliveries," and so on.

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These are good sites, but I believe we can go a step further.

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And the key to that is a philosophy that we call modern markets for all.

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Markets have changed beyond recognition in the last 20 years,

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but only for organizations at the top of the economy.

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If you're a Wall Street trader, you now take it for granted

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that you sell your financial assets in a system of markets

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that identifies the most profitable opportunities for you in real time,

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executes on that in microseconds within the boundaries you've set.

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It analyzes supply and demand and pricing

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and tells you where your next wave of opportunities are coming from.

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It manages counterparty risk in incredibly sophisticated ways.

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It's all extremely low overhead.

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What have we gained at the bottom of the economy

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in terms of markets in the last 20 years?

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Basically classified adverts with a search facility.

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So why do we have this disparity

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between these incredibly sophisticated markets at the top of the economy

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that are increasingly sucking more and more activity and resource

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out of the main economy into this rarefied level of trading,

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and what the rest of us have?

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A modern market is more than a website;

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it's a web of interoperable marketplaces,

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back office mechanisms, regulatory regimes,

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settlement mechanisms, liquidity sources and so on.

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And when a Wall Street trader comes into work in the morning,

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she does not write a listing for every financial derivative she wants to sell today

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and then post that listing on multiple websites

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and wait for potential buyers to get in touch

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and start negotiating the terms on which she might trade.

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In the early days of this modern markets technology,

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the financial institutions worked out

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how they could leverage their buying power, their back office processes,

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their relationships, their networks

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to shape these new markets that would create all this new activity.

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They asked governments for supporting regulatory regimes,

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and in a lot of cases they got it.

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But throughout the economy,

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there are facilities that could likewise leverage

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a new generation of markets

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for the benefit of all of us.

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And those facilities --

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I'm talking about things like the mechanisms that prove our identity,

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the licensing authorities

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that know what each of us is allowed to do legally at any given time,

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the processes by which we resolve disputes through official channels.

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These mechanisms, these facilities

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are not in the gift of Craigslist or Gumtree or Yahoo,

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they're controlled by the state.

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And the policymakers who sit on top of them

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are, I suggest, simply not thinking about how those facilities could be used

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to underpin a whole new era of markets.

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Like everyone else, those policymakers are taking it for granted

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that modern markets are the preserve

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of organizations powerful enough to create them for themselves.

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Suppose we stopped taking that for granted.

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Suppose tomorrow morning the prime minister of Britain or the president of the U.S.,

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or the leader of any other developed nation,

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woke up and said, "I'm never going to be able to create

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all the jobs I need in the current climate.

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I have got to focus on whatever economic opportunity I can get to my citizens.

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And for that they have to be able to access state-of-the-art markets.

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How do I make that happen?"

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And I think I can see a few eyes rolling.

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Politicians in a big, complex, sophisticated I.T. project?

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Oh, that's going to be a disaster waiting to happen.

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Not necessarily.

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There is a precedent for technology-enabled service

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that has been initiated by politicians in multiple countries

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and has been hugely successful:

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national lotteries.

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Let's take Britain as an example.

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Our government didn't design the national lottery,

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it didn't fund the national lottery, it doesn't operate the national lottery.

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It simply passed the National Lottery Act and this is what followed.

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This act defines what a national lottery will look like.

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It specifies certain benefits

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that the state can uniquely bestow on the operators.

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And it puts some obligations on those operators.

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In terms of spreading gambling activity to the masses,

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this was an unqualified success.

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But let's suppose that our aim

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is to bring new economic activity to the base of the pyramid.

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Could we use the same model?

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I believe we could.

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So imagine that policymakers outlined a facility.

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Let's call it national e-markets, NEMs for short.

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Think of it as a regulated public utility.

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So it's on a par with the water supply or the road network.

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And it's a series of markets for low-level trade

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that can be fulfilled by a person or a small company.

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And government has certain benefits

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it can uniquely bestow on these markets.

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It's about public spending going through these markets

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to buy public services at the local level.

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It's about interfacing these markets

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direct into the highest official channels in the land.

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It's about enshrining government's role as a publicist for these markets.

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It's about deregulating some sectors

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so that local people can enter them.

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So, taxi journeys might be one example.

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And there are certain obligations that should go with those benefits

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to be placed on the operators,

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and the key one is, of course,

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that the operators pay for everything,

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including all the interfacing into the public sector.

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So imagine that the operators make their return

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by building a percentage markup into each transaction.

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Imagine that there's a concession period

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defined of maybe 15 years

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in which they can take all these benefits and run with them.

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And imagine that the consortia who bid to run it are told,

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whoever comes in at the lowest percentage markup on each transaction

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to fund the whole thing

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will get the deal.

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So government then exits the frame.

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This is now in the hands of the consortium.

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Either they are going to unlock an awful lot of economic opportunity

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and make a percentage on all of it

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or it's all going to crash and burn,

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which is tough on their shareholders.

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It doesn't bother the taxpayer necessarily.

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And there would be no constraints on alternative markets.

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So this would just be one more choice

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among millions of Internet forums.

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But it could be very different,

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because having access to those state-backed facilities

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could incentivize this consortium

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to seriously invest in the service.

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Because they would have to get a lot of these small transactions going

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to start making their return.

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So we're talking about sectors like home hair care,

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the hire of toys, farm work,

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hire of clothes even, meals delivered to your door,

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services for tourists, home care.

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This would be a world of very small trades, but very well-informed,

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because national e-markets will deliver data.

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So this is a local person

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potentially deciding whether to enter the babysitting market.

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And they might be aware that they would have to fund vetting and training

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if they wanted to go into that market.

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They'd have to do assessment interviews with local parents

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who wanted a pool of babysitters.

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Is it worth their while?

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Should they be looking at other sectors?

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Should they be moving to another part of the country

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where there's a shortage of babysitters?

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This kind of data can become routine.

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And this data can be used by investors.

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So if there's a problem with a shortage of babysitters in some parts of the country

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and the problem is nobody can afford the vetting and training,

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an investor can pay for it

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and the system will tithe back the enhanced earnings of the individuals

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for maybe the next two years.

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This is a world of atomized capitalism.

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So it's small trades by small people,

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but it's very informed, safe, convenient, low-overhead and immediate.

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Some rough research suggests this could unlock

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around 100 million pounds' worth a day of new economic activity

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in a country the size of the U.K.

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Does that sound improbable to you?

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That's what a lot of people said about turbo trading

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in financial exchanges 20 years ago.

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Do not underestimate the transformative power

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of truly modern markets.

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Thank you.

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(Applause)