INTRO AIM: The aim of the BARTER project is to create a system that helps local communities maximise the benefits of money spent into the local economy. WHAT: This is an open source project, which will hopefully be carried into many communities, but first, we’re developing and launching BARTER in Lancaster. So for this talk, I’ll begin by explaining the problem we’re attempting to solve, and then how we have chosen to solve it, a bit about where we’re up to now, and then end with where we’re heading.
WHY: There has been increased concern in recent years for the health of local economies, and there has been rumour of the so-called death of the high street. Lancaster is in better shape than some other places around the country, but we certainly don’t want Lancaster’s shop fronts boarded up and the heart of the town to wither and die. From an economic perspective, the death of the high street can catalyse a swift decline in community wealth, with knock-on effects beyond the high street. From a social perspective, few of us want to live in a place where there is no reason to go into town, where there’s no social nexus for us to mingle with others in our community. The difficulty is that it’s very easy to engage in spending behaviours that take much needed money away from the local community, and contribute to this unwanted decline.
To help explain this, think of the current Lancaster economy as a bucket full of holes. Money that people in Lancaster spend outside of the community leaves the Lancaster bucket of wealth through one of these holes. Obviously the more money that is spent outside of the community, the less wealth there is in Lancaster. The key to improving the local economy, therefore, is to plug some of these holes to prevent money from leaving the community. This means instead of spending online or at global mega-retailers, and instead of businesses sourcing from elsewhere, that consumers and businesses make a concerted attempt to spend locally as much as possible.
money information - regarding the amount and security (strip and serials numbers) barter = extra meta data for each transaction resulting to the understanding of where money has been and where its going (its true value).
Obviously, it’s not possible to do 100% local spending all the time. But the good news is, even a small increase in local spending can make a significant difference to the economy. Every time money is passed around within a community, it grows and it grows quickly, since each person makes a small profit in the exchange. So here are the numbers: if 20% of the community’s wealth is retained, the community will actually see a 1.25-times growth; at 80% wealth retention, on the other hand, the community will see 5-times economic growth over time. One of the first things we aim to do with BARTER is to determine how much local spending is happening. What we can safely say at this point is that Lancaster is far closer to 20% local spending than 80%. Whatever this starting percentage is, however, our goal is to increase it as much as possible.
The basic way we hope to do this is illustrated here: we are going to collect information about how much money is coming in to local businesses from the Lancaster community, and then provide a motivation for businesses to spend as much of that income back into Lancaster as possible. We’re also hoping to provide additional incentive for customers to spend more money locally.
What do we mean by incentive…? We are explicitly not trying to create a system that gives people rewards for spending locally, because research shows that if you give people extrinsic rewards for behaviour, they are actually less likely to continue that behaviour into the future. But we strongly believe that people intrinsically care about their community and want to see it do well – not just for them, but for all the people they know and care about in their community. So our hypothesis is that if people could actually see the effect of their spending behaviour on their community, they will make spending decisions that are beneficial to Lancaster.
At this point, it should be noted that BARTER began as a Catalyst LaunchPad, and from that a prototype system was developed. Since then, In the first few months of what is now called the BARTER project, we’ve been improving this prototype and getting it ready so that we can start collecting data.
The system uses NFC/QR/Barcode technologies (NFC: like that in your contactless payment cards, like your oyster card or on many of your new credit cards) These cards will be given to customers, and they sign up to BARTER with their unique ID from that card. Once they’ve gone through the really quick registration process, when they spend money around Lancaster, they present their BARTER card.
Businesses can then record these transactions by simply touching/scanning the card to their mobile phone or tablet – or if they prefer, depending on the type of business, they can record it using the website. Over time, by collecting this spending data, we can visualise how much money is being retained in the local economy, and where some of the leaks are, so that the community can think about how best to address these leaks.
Currently, it’s very hard to see how money flows around and out of Lancaster. That’s because there is no inbuilt mechanism in money that allows it to be tracked. But we can use recent advances in digital technology to help us visualise this flow of money, to help educate people about the impact of their spending, hopefully in ways that can help them make different spending decisions.
Catalyst community relay BARTER presented by mark lochrie
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