WEBVTT 00:00:00.319 --> 00:00:03.902 This is about a hidden corner of the labor market. 00:00:03.902 --> 00:00:07.535 It's the world of people who need to work ultra-flexibly, 00:00:07.535 --> 00:00:08.852 if they're to work at all. 00:00:08.852 --> 00:00:10.019 So think, for instance, 00:00:10.019 --> 00:00:13.637 of someone who has a recurring but unpredictable medical condition, 00:00:13.637 --> 00:00:16.420 or somebody who's caring for a dependent adult, 00:00:16.420 --> 00:00:19.267 or a parent with complex child care needs. 00:00:19.267 --> 00:00:22.425 Their availability for work can be such that it's, 00:00:22.425 --> 00:00:24.118 "A few hours today. 00:00:24.118 --> 00:00:27.718 Maybe I can work tomorrow, but I don't know if and when yet." 00:00:27.718 --> 00:00:30.237 And it's extraordinarily difficult for these people 00:00:30.237 --> 00:00:33.266 to find the work that they so often need very badly. 00:00:33.266 --> 00:00:36.085 Which is a tragedy because there are employers 00:00:36.085 --> 00:00:39.391 who can use pools of very flexible local people 00:00:39.391 --> 00:00:43.290 booked completely ad hoc around when that person wants to work. NOTE Paragraph 00:00:43.290 --> 00:00:45.891 Imagine that you run a cafe. 00:00:45.891 --> 00:00:47.558 It's mid-morning, the place is filling up. 00:00:47.558 --> 00:00:49.141 You're going to have a busy lunchtime rush. 00:00:49.141 --> 00:00:52.458 If you could get two extra workers for 90 minutes 00:00:52.458 --> 00:00:55.112 to start in an hour's time, 00:00:55.112 --> 00:01:00.070 you'd do it, but they'd have to be reliable, inducted in how your cafe works. 00:01:00.070 --> 00:01:01.946 They'd have to be available at very competitive rates. 00:01:01.946 --> 00:01:05.113 They'd have to be bookable in about the next minute. 00:01:05.113 --> 00:01:09.045 In reality, no recruitment agency wants to handle that sort of business, 00:01:09.045 --> 00:01:12.428 so you are going to muddle by, understaffed. 00:01:12.428 --> 00:01:14.746 And it's not just caterers, it's hoteliers, it's retailers, 00:01:14.746 --> 00:01:18.045 it's anyone who provides services to the public or businesses. 00:01:18.045 --> 00:01:22.578 There's all sorts of organizations that can use these pools of very flexible people, 00:01:22.578 --> 00:01:25.729 possibly already once they've been inducted. NOTE Paragraph 00:01:25.729 --> 00:01:27.762 At this level of the labor market, 00:01:27.762 --> 00:01:31.612 what you need is a marketplace for spare hours. 00:01:31.612 --> 00:01:33.729 They do exist. Here's how they work. 00:01:33.729 --> 00:01:37.196 So in this example, a distribution company has said, 00:01:37.196 --> 00:01:40.479 we've got a rush order that we've got to get out of the warehouse tomorrow morning. 00:01:40.479 --> 00:01:41.879 Show us everyone who's available. 00:01:41.879 --> 00:01:43.530 It's found 31 workers. 00:01:43.530 --> 00:01:47.062 Everybody on this screen is genuinely available at those specific hours tomorrow. 00:01:47.062 --> 00:01:49.396 They're all contactable in time for this booking. 00:01:49.396 --> 00:01:53.397 They've all defined the terms on which they will accept bookings. 00:01:53.397 --> 00:01:56.811 And this booking is within all the parameters for each individual. 00:01:56.811 --> 00:01:59.372 And they would all be legally compliant by doing this booking. 00:01:59.372 --> 00:02:01.296 Of course, they're all trained to work in warehouses. 00:02:01.296 --> 00:02:03.511 You can select as many of them as you want. 00:02:03.511 --> 00:02:04.963 They're from multiple agencies. 00:02:04.963 --> 00:02:08.895 It's calculated the charge rate for each person for this specific booking. 00:02:08.895 --> 00:02:11.229 And it's monitoring their reliability. 00:02:11.229 --> 00:02:14.229 The people on the top row are the provenly reliable ones. 00:02:14.229 --> 00:02:15.978 They're likely to be more expensive. 00:02:15.978 --> 00:02:19.179 In an alternative view of this pool of local, very flexible people, 00:02:19.179 --> 00:02:20.862 here's a market research company, 00:02:20.862 --> 00:02:24.812 and it's inducted maybe 25 local people in how to do street interviewing. 00:02:24.812 --> 00:02:27.497 And they've got a new campaign. They want to run it next week. 00:02:27.497 --> 00:02:30.896 And they're looking at how many of the people they've inducted 00:02:30.896 --> 00:02:33.178 are available each hour next week. 00:02:33.178 --> 00:02:35.912 And they'll then decide when to do their street interviews. NOTE Paragraph 00:02:35.912 --> 00:02:38.529 But is there more that could be done 00:02:38.529 --> 00:02:40.279 for this corner of the labor market? 00:02:40.279 --> 00:02:42.965 Because right now there are so many people 00:02:42.965 --> 00:02:46.563 who need whatever economic opportunity they can get. 00:02:46.563 --> 00:02:48.613 Let's make it personal. 00:02:48.613 --> 00:02:51.396 Imagine that a young woman -- base of the economic pyramid, 00:02:51.396 --> 00:02:53.596 very little prospect of getting a job -- 00:02:53.596 --> 00:02:57.312 what economic activity could she theoretically engage in? 00:02:57.312 --> 00:02:59.596 Well, she might be willing to work odd hours 00:02:59.596 --> 00:03:02.896 in a call center, in a reception area, in a mail room. 00:03:02.896 --> 00:03:06.228 She may be interested in providing local services to her community: 00:03:06.228 --> 00:03:08.779 babysitting, local deliveries, pet care. 00:03:08.779 --> 00:03:11.916 She may have possessions that she would like to trade 00:03:11.916 --> 00:03:13.162 at times she doesn't need them. 00:03:13.162 --> 00:03:16.761 So she might have a sofa bed in her front room that she would like to let out. 00:03:16.761 --> 00:03:20.929 She might have a bike, a video games console she only uses occasionally. 00:03:20.929 --> 00:03:24.330 And you're probably thinking -- because you're all very web-aware -- 00:03:24.330 --> 00:03:26.895 yes, and we're in the era of collaborative consumption, 00:03:26.895 --> 00:03:28.655 so she can go online and do all this. 00:03:28.655 --> 00:03:31.313 She can go to Airbnb to list her sofa bed, 00:03:31.313 --> 00:03:35.197 she can go to TaskRabbit.com and say, "I want to do local deliveries," and so on. NOTE Paragraph 00:03:35.197 --> 00:03:40.547 These are good sites, but I believe we can go a step further. 00:03:40.547 --> 00:03:47.161 And the key to that is a philosophy that we call modern markets for all. 00:03:47.161 --> 00:03:51.712 Markets have changed beyond recognition in the last 20 years, 00:03:51.712 --> 00:03:55.396 but only for organizations at the top of the economy. 00:03:55.396 --> 00:03:58.396 If you're a Wall Street trader, you now take it for granted 00:03:58.396 --> 00:04:01.312 that you sell your financial assets in a system of markets 00:04:01.312 --> 00:04:04.895 that identifies the most profitable opportunities for you in real time, 00:04:04.895 --> 00:04:08.548 executes on that in microseconds within the boundaries you've set. 00:04:08.548 --> 00:04:11.980 It analyzes supply and demand and pricing 00:04:11.980 --> 00:04:14.073 and tells you where your next wave of opportunities are coming from. 00:04:14.073 --> 00:04:17.623 It manages counterparty risk in incredibly sophisticated ways. 00:04:17.623 --> 00:04:20.057 It's all extremely low overhead. 00:04:20.057 --> 00:04:23.058 What have we gained at the bottom of the economy 00:04:23.058 --> 00:04:27.152 in terms of markets in the last 20 years? 00:04:27.152 --> 00:04:33.311 Basically classified adverts with a search facility. NOTE Paragraph 00:04:33.311 --> 00:04:35.324 So why do we have this disparity 00:04:35.324 --> 00:04:38.874 between these incredibly sophisticated markets at the top of the economy 00:04:38.874 --> 00:04:42.490 that are increasingly sucking more and more activity and resource 00:04:42.490 --> 00:04:45.939 out of the main economy into this rarefied level of trading, 00:04:45.939 --> 00:04:48.323 and what the rest of us have? 00:04:48.323 --> 00:04:51.389 A modern market is more than a website; 00:04:51.389 --> 00:04:54.008 it's a web of interoperable marketplaces, 00:04:54.008 --> 00:04:56.542 back office mechanisms, regulatory regimes, 00:04:56.542 --> 00:05:01.439 settlement mechanisms, liquidity sources and so on. 00:05:01.439 --> 00:05:04.590 And when a Wall Street trader comes into work in the morning, 00:05:04.590 --> 00:05:09.789 she does not write a listing for every financial derivative she wants to sell today 00:05:09.789 --> 00:05:12.405 and then post that listing on multiple websites 00:05:12.405 --> 00:05:14.905 and wait for potential buyers to get in touch 00:05:14.905 --> 00:05:18.622 and start negotiating the terms on which she might trade. NOTE Paragraph 00:05:18.622 --> 00:05:21.521 In the early days of this modern markets technology, 00:05:21.521 --> 00:05:23.589 the financial institutions worked out 00:05:23.589 --> 00:05:27.221 how they could leverage their buying power, their back office processes, 00:05:27.221 --> 00:05:29.521 their relationships, their networks 00:05:29.521 --> 00:05:34.111 to shape these new markets that would create all this new activity. 00:05:34.111 --> 00:05:37.200 They asked governments for supporting regulatory regimes, 00:05:37.200 --> 00:05:39.834 and in a lot of cases they got it. NOTE Paragraph 00:05:39.834 --> 00:05:41.784 But throughout the economy, 00:05:41.784 --> 00:05:44.602 there are facilities that could likewise leverage 00:05:44.602 --> 00:05:46.201 a new generation of markets 00:05:46.201 --> 00:05:48.934 for the benefit of all of us. 00:05:48.934 --> 00:05:50.902 And those facilities -- 00:05:50.902 --> 00:05:54.618 I'm talking about things like the mechanisms that prove our identity, 00:05:54.618 --> 00:05:56.901 the licensing authorities 00:05:56.901 --> 00:06:00.734 that know what each of us is allowed to do legally at any given time, 00:06:00.734 --> 00:06:04.402 the processes by which we resolve disputes through official channels. 00:06:04.402 --> 00:06:07.251 These mechanisms, these facilities 00:06:07.251 --> 00:06:10.800 are not in the gift of Craigslist or Gumtree or Yahoo, 00:06:10.800 --> 00:06:13.902 they're controlled by the state. 00:06:13.902 --> 00:06:16.633 And the policymakers who sit on top of them 00:06:16.633 --> 00:06:22.851 are, I suggest, simply not thinking about how those facilities could be used 00:06:22.851 --> 00:06:25.634 to underpin a whole new era of markets. NOTE Paragraph 00:06:25.634 --> 00:06:30.351 Like everyone else, those policymakers are taking it for granted 00:06:30.351 --> 00:06:32.619 that modern markets are the preserve 00:06:32.619 --> 00:06:40.530 of organizations powerful enough to create them for themselves. 00:06:40.530 --> 00:06:43.957 Suppose we stopped taking that for granted. 00:06:43.957 --> 00:06:47.123 Suppose tomorrow morning the prime minister of Britain or the president of the U.S., 00:06:47.123 --> 00:06:49.305 or the leader of any other developed nation, 00:06:49.305 --> 00:06:53.156 woke up and said, "I'm never going to be able to create 00:06:53.156 --> 00:06:55.322 all the jobs I need in the current climate. 00:06:55.322 --> 00:07:00.656 I have got to focus on whatever economic opportunity I can get to my citizens. 00:07:00.656 --> 00:07:04.623 And for that they have to be able to access state-of-the-art markets. 00:07:04.623 --> 00:07:06.991 How do I make that happen?" NOTE Paragraph 00:07:06.991 --> 00:07:09.740 And I think I can see a few eyes rolling. 00:07:09.740 --> 00:07:13.522 Politicians in a big, complex, sophisticated I.T. project? 00:07:13.522 --> 00:07:17.052 Oh, that's going to be a disaster waiting to happen. 00:07:17.052 --> 00:07:20.057 Not necessarily. 00:07:20.057 --> 00:07:22.905 There is a precedent for technology-enabled service 00:07:22.905 --> 00:07:26.607 that has been initiated by politicians in multiple countries 00:07:26.607 --> 00:07:29.423 and has been hugely successful: 00:07:29.423 --> 00:07:31.873 national lotteries. NOTE Paragraph 00:07:31.873 --> 00:07:33.623 Let's take Britain as an example. 00:07:33.623 --> 00:07:36.223 Our government didn't design the national lottery, 00:07:36.223 --> 00:07:39.006 it didn't fund the national lottery, it doesn't operate the national lottery. 00:07:39.006 --> 00:07:44.157 It simply passed the National Lottery Act and this is what followed. 00:07:44.157 --> 00:07:47.422 This act defines what a national lottery will look like. 00:07:47.422 --> 00:07:49.090 It specifies certain benefits 00:07:49.090 --> 00:07:51.773 that the state can uniquely bestow on the operators. 00:07:51.773 --> 00:07:54.472 And it puts some obligations on those operators. 00:07:54.472 --> 00:07:57.822 In terms of spreading gambling activity to the masses, 00:07:57.822 --> 00:08:00.856 this was an unqualified success. NOTE Paragraph 00:08:00.856 --> 00:08:02.640 But let's suppose that our aim 00:08:02.640 --> 00:08:06.523 is to bring new economic activity to the base of the pyramid. 00:08:06.523 --> 00:08:08.673 Could we use the same model? 00:08:08.673 --> 00:08:10.457 I believe we could. 00:08:10.457 --> 00:08:14.573 So imagine that policymakers outlined a facility. 00:08:14.573 --> 00:08:18.557 Let's call it national e-markets, NEMs for short. 00:08:18.557 --> 00:08:20.406 Think of it as a regulated public utility. 00:08:20.406 --> 00:08:23.290 So it's on a par with the water supply or the road network. 00:08:23.290 --> 00:08:27.406 And it's a series of markets for low-level trade 00:08:27.406 --> 00:08:30.223 that can be fulfilled by a person or a small company. 00:08:30.223 --> 00:08:32.972 And government has certain benefits 00:08:32.972 --> 00:08:35.522 it can uniquely bestow on these markets. 00:08:35.522 --> 00:08:38.306 It's about public spending going through these markets 00:08:38.306 --> 00:08:40.905 to buy public services at the local level. 00:08:40.905 --> 00:08:42.640 It's about interfacing these markets 00:08:42.640 --> 00:08:46.290 direct into the highest official channels in the land. 00:08:46.290 --> 00:08:49.690 It's about enshrining government's role as a publicist for these markets. 00:08:49.690 --> 00:08:52.472 It's about deregulating some sectors 00:08:52.472 --> 00:08:53.905 so that local people can enter them. NOTE Paragraph 00:08:53.905 --> 00:08:56.157 So, taxi journeys might be one example. 00:08:56.157 --> 00:09:00.939 And there are certain obligations that should go with those benefits 00:09:00.939 --> 00:09:02.540 to be placed on the operators, 00:09:02.540 --> 00:09:04.040 and the key one is, of course, 00:09:04.040 --> 00:09:06.906 that the operators pay for everything, 00:09:06.906 --> 00:09:09.907 including all the interfacing into the public sector. 00:09:09.907 --> 00:09:13.473 So imagine that the operators make their return 00:09:13.473 --> 00:09:16.656 by building a percentage markup into each transaction. 00:09:16.656 --> 00:09:19.090 Imagine that there's a concession period 00:09:19.090 --> 00:09:21.523 defined of maybe 15 years 00:09:21.523 --> 00:09:25.989 in which they can take all these benefits and run with them. 00:09:25.989 --> 00:09:29.306 And imagine that the consortia who bid to run it are told, 00:09:29.306 --> 00:09:32.939 whoever comes in at the lowest percentage markup on each transaction 00:09:32.939 --> 00:09:34.431 to fund the whole thing 00:09:34.431 --> 00:09:35.806 will get the deal. NOTE Paragraph 00:09:35.806 --> 00:09:37.606 So government then exits the frame. 00:09:37.606 --> 00:09:39.239 This is now in the hands of the consortium. 00:09:39.239 --> 00:09:41.790 Either they are going to unlock an awful lot of economic opportunity 00:09:41.790 --> 00:09:43.874 and make a percentage on all of it 00:09:43.874 --> 00:09:45.473 or it's all going to crash and burn, 00:09:45.473 --> 00:09:47.090 which is tough on their shareholders. 00:09:47.090 --> 00:09:49.540 It doesn't bother the taxpayer necessarily. 00:09:49.540 --> 00:09:54.190 And there would be no constraints on alternative markets. 00:09:54.190 --> 00:09:56.623 So this would just be one more choice 00:09:56.623 --> 00:09:59.439 among millions of Internet forums. 00:09:59.439 --> 00:10:01.989 But it could be very different, 00:10:01.989 --> 00:10:05.607 because having access to those state-backed facilities 00:10:05.607 --> 00:10:07.940 could incentivize this consortium 00:10:07.940 --> 00:10:10.057 to seriously invest in the service. 00:10:10.057 --> 00:10:13.124 Because they would have to get a lot of these small transactions going 00:10:13.124 --> 00:10:14.855 to start making their return. NOTE Paragraph 00:10:14.855 --> 00:10:19.746 So we're talking about sectors like home hair care, 00:10:19.746 --> 00:10:23.703 the hire of toys, farm work, 00:10:23.703 --> 00:10:27.322 hire of clothes even, meals delivered to your door, 00:10:27.322 --> 00:10:29.129 services for tourists, home care. 00:10:29.129 --> 00:10:35.912 This would be a world of very small trades, but very well-informed, 00:10:35.912 --> 00:10:39.779 because national e-markets will deliver data. NOTE Paragraph 00:10:39.779 --> 00:10:42.412 So this is a local person 00:10:42.412 --> 00:10:45.412 potentially deciding whether to enter the babysitting market. 00:10:45.412 --> 00:10:48.261 And they might be aware that they would have to fund vetting and training 00:10:48.261 --> 00:10:49.661 if they wanted to go into that market. 00:10:49.661 --> 00:10:52.279 They'd have to do assessment interviews with local parents 00:10:52.279 --> 00:10:53.779 who wanted a pool of babysitters. 00:10:53.779 --> 00:10:55.180 Is it worth their while? 00:10:55.180 --> 00:10:56.880 Should they be looking at other sectors? 00:10:56.880 --> 00:10:58.764 Should they be moving to another part of the country 00:10:58.764 --> 00:11:01.013 where there's a shortage of babysitters? 00:11:01.013 --> 00:11:03.363 This kind of data can become routine. 00:11:03.363 --> 00:11:05.397 And this data can be used by investors. 00:11:05.397 --> 00:11:08.563 So if there's a problem with a shortage of babysitters in some parts of the country 00:11:08.563 --> 00:11:11.462 and the problem is nobody can afford the vetting and training, 00:11:11.462 --> 00:11:13.046 an investor can pay for it 00:11:13.046 --> 00:11:16.730 and the system will tithe back the enhanced earnings of the individuals 00:11:16.730 --> 00:11:18.379 for maybe the next two years. NOTE Paragraph 00:11:18.379 --> 00:11:21.680 This is a world of atomized capitalism. 00:11:21.680 --> 00:11:23.712 So it's small trades by small people, 00:11:23.712 --> 00:11:30.579 but it's very informed, safe, convenient, low-overhead and immediate. 00:11:30.579 --> 00:11:33.504 Some rough research suggests this could unlock 00:11:33.504 --> 00:11:37.705 around 100 million pounds' worth a day of new economic activity 00:11:37.705 --> 00:11:39.655 in a country the size of the U.K. NOTE Paragraph 00:11:39.655 --> 00:11:42.388 Does that sound improbable to you? 00:11:42.388 --> 00:11:46.521 That's what a lot of people said about turbo trading 00:11:46.521 --> 00:11:49.573 in financial exchanges 20 years ago. 00:11:49.573 --> 00:11:52.673 Do not underestimate the transformative power 00:11:52.673 --> 00:11:55.829 of truly modern markets. NOTE Paragraph 00:11:55.829 --> 00:11:57.455 Thank you. NOTE Paragraph 00:11:57.455 --> 00:11:59.040 (Applause)