A Local Living Economy ensures that economic power resides locally, sustaining a healthy community and natural life, as well as long-term economic and social viability. Local Living Economies contribute to a livable planet.

How would you explore the means to creating a local living economy in your community?

Hi Carlos,

I would say yes to your first question. The concept of the people-centered economy having been delivered to President Clinton's re-election committee in 1996, then published on the web to seed an "idea virus" in 1997.

The first target delivering proof of concept was a city far away in Siberia, where a holistic approach took development aid funding to create a microfinance bank and leverage 10,000 new businesses.

In my own community, an English village away from the centres of employment, I'm starting to rally others in the cause of creating a local green energy production facility. Ideally, the financial model will be of the kind prescribed by Chris Cook, as Open Capital. This will allow investment and shared reward of either electricity or cash, or both and for "sweat equity" to create local employment and be rewarded in the same way, the model being based on assets rather than debt. Overall the project will retain its people-centered approach to serving the community. My business, a small software development firm pioneered this profit for social purpose model in the UK. It provides the core funding for our overseas objectives, to replicate localised people-centered economics on a global basis.

For the last 4 years we've been directing efforts toward Ukraine and fundamental poverty. Without reservation, I would say that the greatest obstacle has been our own government, who simply will not communicate on the subject and who have in many ways become the chief obstruction.

So, with an opportunity arising just once in a while I seize the moment, to tackle something which politicians have just become aware of, and simply don't know how to tackle. Our 5 years of effort given the opportunity for public examination and hopefully their approval. We move now from the concept of development funding being used as investment, to the nil overall cost strategy. It is a Marshall Plan for eliminating poverty and some of its most severe consequences. Europe offers the opportunity to be heard.

http://www.european-citizens-consultations.eu/uk/proposal/2012

Jeff

People Centered Business as an idea virus has proven its strength. Congratulations! On the great work and undertakings.

The proposed “Marshall Plan”, is a thoughtful community investment strategy. I like the center for social enterprise component. I am working on a similar concept here, a cooperative enterprise school. I am intending to make the project for profit. Certainly the model that Chris Cook offers has inspired me to consider how to fund the start up. In this case I thought a private LLC, which is owned by a cooperative.

Our goal is to identify one catalyst idea that can contribute to a local living economy and 8 social enterprise business models that can be propagated quickly in any of the following areas, energy, housing, transportation, health and education. The investments are grouped into three general themes, green businesses, community health, and social enterprise/small business development. Culture is also included as a low cost personal development opportunity for example, learning languages.

Hi,

last week I visited the "Entrepreneur Laboratory" of Prof. Faltin from the Free University Berlin (FU Berlin) (I am from Germany). It's a 2-weekly seminar at the evening, from 6-10pm with interviews, workshops, meeting place, cheese and wine, etc.

However, Prof. Faltin's new book is titled: Kopf schlägt Kapital / Brain Beats Capital. His simple hypothesis: It was never easier to start an organization than today AND capital is NOT the most needed ingredient. This true for individuals and communities.

Look at organizations like: Skype, Kiva, Faltin's Tea campaign, olive oil, or juice (social) enterprise, Flexible Secretary Solutions (all mentioned in the book). They do not need a lot capital, but can outsource most of the management functions on a performance-based payment agreement to specialist who can do them better, while the entrepreneur can focus and nurture his idea! Although you will do less beginner mistakes and pay for them!

Forget even all the new creativity techniques! Start with something which MATTERS to you or to your community. Something to which you can connect. After all, for non-engineers all possible entrepreneurial fields are already discovered! A systematic, individual centred approach is much more valuable than 1,000 brainstorming techniques! We just need to find an innovative, destructive-creative way to exploit them. Create something new by looking at it from a different perspective/viewshafts (German: Sichtachsen)! In Prof. Faltin words or maybe he quoted from somebody else: Not new lands, but seeing with new eyes, is real discovery!

Another nice metaphor Prof. Faltin used: Money is just a medium (even Aristotle said this); It's like fuel. you need it to get somewhere. If you put it on the car seat, its a waste; its unproductive. Capital needs and seeks brain (idea + interest(commitment).

The same with community: Don’t start a community project from scratch. Look what is the inherently, yet unused or under-utilized endogenous potential of your community and build on that!The role of community (gov., private, civil society) is to establish an environment to inspire people, create creative surroundings, amplify their potential, give them a voice, integrate many voices, nurture these brainy people and cluster them and provide some exist strategies!

Nothing really difficult and expensive to do, if you think of it. Of course you can put BILLIONS of dollar in creative programs, but you can really do it cheaper, if you plan it well and put some thinking into it beforehand!

Some links (just in German): http://www.entrepreneurship.de/ The book online: http://www.misterinfo.de/buecher/kopf-schlaegt-kapital http://www.kopfschlaegtkapital.com/

However, I also published a summary on my blog (skip the first part, it’s the same like here): http://bop-manager.blogspot.com/2008/12/entrepreneurial-design-for-bop-ventures.html

In January, I will start working in Berlin in a think tank working on Social Business ( GENISIS Institute for Social Business and Impact Strategies; http://www.genisis-institute.org/ ) and Berlin is soooo sexy as a city and inhabits so many of the so called “creative class”. However the city still needs to work much harder on the community issues to nurture this talent! (My humble opinion as an outsider!)

Regards, and happy X-Mas 2008 (Frohe Weihnacht)

Simon

Simon, thank you for sharing what is going on in Germany. Great points! When I look at my community I think 90% of the job is to inspire people, "new eyes"! Hopefully, we can realize that we have abundant local resources if we apply our brains; my belief is that capital will then follow.

I think what matters to my community is a viable local economy. However, exploring how to create a local living economy means finding a space where that is the focus, as opposed to ideological discussions (left vs. right). Like you I think “a systematic, individual centered approach” will yield the best results.

Which is why I am investing my efforts in enabling a community space for local innovators and entrepreneurs. Unlike institutions entrepreneurs have a higher need to focus on what their product or service should really do in order to become viable a business. My hope is that in the future entrepreneurs will include in their planning how their business contributes to their local economy as much as other business factors.

By the way when I say entrepreneurs, I include all business models, profit, nonprofit, etc.

I choose this title for the discussion to provide a picture. Here is the skeleton of the idea. I hope you find it interesting.

Goal: New trade practices, products or services that contribute to a local living economy are launched.

Purpose: - New job opportunities with living wages are available to everyone; - Renewable domestic sources of energy are available to everyone; - Food security, healthy, diverse and affordable food is available to everyone; - Good stewardship of our natural resources to ensure a local living economy, healthy environment, healthy people;

Outputs to be achieved in five years: - Identify and launch one business model or trade practice that serves as a catalyst for a local living economy;

• Develop eight business models that contribute to a local living economy and can be propagated quickly in any of these areas, education, health, transportation, housing, energy and food security;

Activities: - Provide convenient, affordable and reliable enterprise education opportunities to anyone seeking to earn their living on their own terms (no enrollment requirements);

• Provide convenient, affordable and reliable education opportunities that improve individuals or families social and economic well-being (no enrollment requirements);
• Develop partnerships to leverage community-will, capital and resources that improve the success of our entrepreneurs and locally owned businesses.

Dr. David C. Korten web article on local living economies http://www.pcdf.org/Living_Economies/I_Intro.htm

People Centered Development forum http://www.pcdf.org/

Business Alliance for Local Living Economies http://www.livingeconomies.org/entrepreneurs/what-is-a-local-living-economy-1

A local living economy is an idea that most citizens could find desirable. However, we need to find business models and trade practices that demonstrate the value of the idea, if we wish to gain the community-will to make more significant gains towards a livable planet.

How should do we explore these business models? Influence government policy? Develop more charitable initiatives? Or should we look for viable economic and social transactions that can enable a local living economy?

Hi Carlos and everybody else!

thanks for the Links.

Are you in any of these initiatives personally involved? Or how could we collaborate on this?

I got a personally motivation and expertise in this: Because I am from a small village in Germany (800 inhabitants) and many villages, especially in East-Germany, have structural problems which results in negative social consequences: unemployment, racism (often a symptom just of unemployment), suicides, all especially among the young generation; loss of community, loss of income for the community, village DEBT in Germany is enormous, corruption, etc. …. However, I do not have hard figures for this, but I think the rural development in industrialized countries did not go very well in the last centuries. Some further information (if available) would yield interesting results. Regarding my expertise, I did some Rural marketing courses and field trips to villages in India. Would be interesting to apply this knowledge in developing AND developed countries. A thing which is in my mind today: To solve the problems of the cities, is to solve the problems of the villages.

Furthermore, the opportunities nowadays are enormous and growing: Renewable energy can be applied to villages from a certain size, using the collective investments of the community and strengthen community identification, ownership, relation human-nature, etc… For example, in France, I saw in a documentary, that a French village used wood (not the whole tree, but only parts of it, so its sustainable) to generate energy for a whole village. By this, they created jobs. They also had a weekly market bazaar with regional food. Another interesting idea would be to start something like a car pool and sharing concept to reduce CO2, provide mobility, foster communication (easy by SMS or internet), reduce capital commitment/lockup costs per household, etc. Moreover, people are feed up with bad and damaging product quality which sometimes threaten even their health, tax money used in some other parts or overseas without seeing development in front of their own house door, seeing that more and more community activities (theatre, kindergarten, schools, transportation) are scaled down because there is not enough money (? or entrepreneurial energy?), why to go far to work, eat etc. why not one central place, why separate work and home (friends, kids,) so much?, integration of elderly, immigrants, etc...

Trying to answer your questions: I would start small (villages)! Small is beautiful, and is much easier to start, implement, and experiment. A grassroot movement will easier influence and put pressure on national government policies. It should be an down-Top, entrepreneurial and own-initiative movement! The only job of a “Living Economies Alliance” can only be to provide guidance, ask the right questions, provide some start up know-how, and then get out of the way and let them explore their endogenous potential! Later, of course, we must collect feedback, provide lessons learned, and diffuse these, etc. Maybe developing some kind Training-the Trainer-Manual, or 1-year learning program of village changemaker would be a good way. Anyway, to fight our way through national laws and bureaucracy would only lock-up our energy, slow down our idea refinement, put you in the defensive and making you passive and dependent on local money !

I don’t think charity is necessary: by focusing on renewable energy, mobility, cutting personal and community costs, job creation, the social business model can be viable, sustainable and probably give a positive (social) RoI. Again to measure this, some more research is needed! However charity is not sustainable and should only used as a start-up credit; if at all necessary.

Business models could be categorized by size and technology, maybe! The aim could be to come to some kind of Mutual-exclusive, collective-exhaustive typology of business models through allowing a high-kind of experiments. We should start by one village, making it self-sufficient, and others will follow!

I did some further research on my previous post (about the role of capital):

To define capital with money is idiotic (Of course many and me too, do!). Capital comes from the latin word caput = Meaning head! Following this logic, THINKING, not money, is the main point! You only create value by re-thinking (german: weiterdenken, thinking further) a thought of your fellow! This would be the intellectual interest! An interesting experiment was done by Daniel Häni in Basel Switzerland: he has a café where the customers do not have to consume and his employees all getting basic income! His thinking behind this: What will you work if you do NOT have to? (Who does not have to, can!) the café is more a place to think and experiment! Other advantages of this model is: he works without a budget, and can focus more on creativity; he cannot force/motivate his employees by money and must re-think his corporate culture and leadership. They do not work FOR him, but WITH him. Okay, I do not want to get into this to much. The point is just that money is not the main thing, and to explore innovations, we must allow experiments and look at things with different eyes!

Here’s the link: http://www.initiative-grundeinkommen.ch/content/home/

Another interesting site is the one about reclaiming a city quarter in Graz, Switzerland, to give them room to think. http://www.graz-reininghaus.com/ein-neuer-stadtteil-entsteht.php

Their initiative was locally embedded by involving many stakeholders (architects, creative class companies (Internet, designer), old-school industrialized organisations, church, social service organizations, many SMEs, etc.) to provide a good mix, tipping point, and critical mass.

So let me know, if you plan something and how we can collaborate on this. This is really interesting me!

Regards, Simon

Simon, I was thinking about the decreasing village tourism in Germany. Perhaps we could try local living economy trade mission to launch “local living economy tours and trade missions”. Give people a chance to see what other people in the world are doing to cope fickle global capital.

Maybe do a local living economy business makeover exchange? It may be good way to get press and the spread the idea. We could start with our town and your village? What is local living economy business makeover?

Simon, I would say there are many similarities between what is called the “Rust Belt” and East vs. West Germany. The area were the school is located is known as the Mon Valley and it was the heart of the steel industry. In our town population went from 45,000 to 5,000! There is a lot of underutilized real estate and excessive infrastructure to maintain.

“New eyes” for us could mean looking at our real estate and geography to find economic opportunity. For example I can imagine electricity generated using water turbines (we are blessed with three large rivers) to power our commercial district, which could keep utility costs low for small business owners. Then it may be more economically viable for local businesses to establish themselves in our community. This type of utility investment could be combination of public (the borough) and private (consumer cooperative).

Thinking of a local economy is multi-dimensional, so a space where various affinities, social networks and economic strata can interact is necessary. Since most solutions are likely to be in no-man’s land, a place where self-interest is not evident at first sight.

I am happy to collaborate!

Simon, thanks again for the thoughtful and provocative post.

Definitely focusing on making your local economy strong could develop the kind of community-will necessary to influence national policy. So in that sense the goal is to focus on what we can influence as opposed to what we are concerned about, but cannot influence. Hopefully, the process of seeking local policy that encourages a local living economy can teach us what could be effective national policy.

Economically, one has to realize that wages are not growing due to a global labor market. The opportunity is for social enterprises that reduce costs for households, businesses and local governments. For example, Flexcar.org or zipcar.com reduces the costs of transportation, by making cars available by the hour. Households save insurance, parking and fuel costs.

In our case municipalities are under pressure due to population loss, which means a smaller tax base. Finding new sources of revenue that do not include property taxes is critical to the municipalities’ viability. By leveraging municipal capital with cooperative structures villages could set up Internet services, domestic generated energy and other community services. Example, http://magnoliaroad.net/aboutus/aboutmric.html or http://www.nreca.org/

Developing a local living economy is likely to require diverse sources of capital, which can include, government, philanthropic, for profit social investors and market capital. Think about it as a garden. A garden is healthier when there is diverse sources of nutrients in the soil.

For social entrepreneurs the challenge is to take charitable innovations to marketable products or services that contribute to community health. An interesting fact is that charity is often the source of innovation to meet community needs. However, nonprofits are not wired to take these innovations to market. Car sharing is good example. The idea of car sharing dates back to 1948 but failed to take off.

“Capital comes from the latin word caput = Meaning head! Following this logic, THINKING, not money, is the main point!” A good point on the value of money, however, money is also a means to convey ownership. One has to wonder if aboriginal cultures that do not have a concept of private property have a point when it comes ensuring livable planet.

My limited experience with creative endeavors tells me that it is good for the creative process to have parameters. It strengthens the creative mind and helps develop a higher level of skill. That is why it makes sense to provide a systemic approach to growing local social entrepreneurs working towards a local living economy. A completely free-form space would be most useful to skilled social entrepreneurs not beginners, unless learning by experience was the objective.

Interesting stuff from Carlos and Simon in particular - and thanks for the commercial, Jeff!

It's amazing how many people are catching on to alternatives of the type I've been working on, now that the inadequacy of conventional solutions is becoming daily more apparent.

I see both Money and Property - which gives us the property rights which underpin "Capital" - not as the conventional Objects we are used to, but as Relationships.

I believe that new generations of networked partnerships will evolve using LLC's and UK (also Dubai, Qatari, Japanese and yes - from two weeks ago, Indian) LLP's as frameworks. Within these frameworks it wil be possible to create simple but radical new "Peer to Peer" risk and revenue sharing mechanisms for both credit and investment.

So in your case, Carlos, I would see the requirement for an LLC as a revenue sharing "Capital Partnership" where some other entity (which could itself be an LLC) shares revenues or production - if there is any - with "Capital Partner" investors.

To Simon I would say, please contact me offline at cojockAThotmail.com since I have recently made several good contacts in Germany who really "get" the concepts I am outlining.

You can find more in this recent lecture

http://www.feasta-multimedia.org/2008/Chris_Cook.mov

and the associated presentation here

http://www.slideshare.net/ChrisJCook/equity-shares-a-solution-to-the-credit-crash-presentation

also re renewable energy, there's this.

http://www.slideshare.net/ChrisJCook/financing-energybeyond-peak-credit-presentation/

I believe that in partnership models like these, Labour works WITH not FOR Capital, and it is more "profitable" to cooperate than to compete.

In other words: Ethical just might be Optimal....

Chris, Kudos!

Thank you for taking an interest in our discussion. Your “Peer to Peer” risk and revenue sharing mechanism concept also lends itself to the idea of social capital. Typically we do community organizing to overcome a challenge. Envisioning community organizing as means to establish mutually beneficial “Peer to Peer” asset based enterprises could be a means to a local living economy.

I enjoyed the presentation and your sense of humor! Thank you! Carlos

Chris thank you for the capital partnership tip! It works quite well with the community organizing that I have done. In our case I started by wondering how we could turn one block in our town around? I developed a little bit of social capital with the property owner of a parish school on the block. It is my belief that the parish school needs to be fixed in order to bring the street back. Over time I have been able to develop sufficient trust for her to consider becoming part of capital partnership.

I was struggling with how to provide collateral, as the properties themselves do not have sufficient value and are in fact loosing value. A capital partnership would allow us to leverage the cooperative’s future revenues. The only way to fix the buildings is to set up a high cashflow business, as the cashflows possible through residential use would not pay rehabilitation costs. Even after rehabilitation the properties cannot achieve a market value that would offset the investment required.

I am not sure that underwriting based on future revenues will be a feasible position for local banks. The capital partnership form would allow us to combine private social investors, cooperative members, the property owner and possibly public capital. We can the raise sufficient cash and property to provide the necessary collateral for a commercial loan.

Happy New Year! Carlos

Jeff, Social enterprise should aim to create enterprises that lead to a local living economy. This a people centered approach to economics. Community organizing is essential to leveraging open capital, strategies could include a community investment strategy or Marshall Plan.

Simon, offered Prof. Faltin's new book which is titled: Kopf schlägt Kapital / Brain Beats Capital. Capital needs and seeks brain (idea + interest (commitment)) A “community brain” can be developed through an entrepreneur laboratory, open creative, individual centered approach to what matters to you and your community, “Not new lands, but seeing with new eyes, is real discovery!”

Chris, visualize both Money and Property not as the conventional Objects we are used to, but as Relationships. I believe that new generations of networked partnerships will evolve using LLC's and LLP's as frameworks. Within these frameworks it will be possible to create simple but radical new "Peer to Peer" risk and revenue sharing mechanisms for both credit and investment or Open Capital.

To establish an entrepreneurial laboratory, school, or guild that works towards a local living economy in your community consider the following:

Develop a systemic approach that helps entrepreneurs become proficient in these activities: Thinking together; Collaboration; Risk taking.

The following values guide our process of discovering trade practices and business models that contribute to a livable planet and a local living economy:

Thinking together Purpose: bringing knowledge and resources to develop business models and trade practices that lead to a strong local living economy and livable planet;

Collaboration Purpose: working together across sectors and cultures to establish mutually beneficial local living economy initiatives;

Risk taking Purpose: exploring community needs and creating social innovations or enterprises that improve our community and planet’s health;

Hi,

it took me a little bit longer, but here's my New Years resolution:

Specifically, I could think of the following areas to collaborate (Brainstorming to improve):

1) Building a global platform / alliance of interested people and communities to agree on certain points and maybe even a time frame (or parameters or systematic approach in your words, Carlos!). Something like: face and understand the problems of local communities, 10 these / assumption / aims of local community development/empowerment, .. More on a strategic, broad area, to give them a collaboration platform and an amplitude for their voice and raise awareness (Something like: We envision a future build on ...

Some strong words already mentioned in the discussion:

Living (Strong word, maybe good for a logo/brand of our initiative?) Local Initiative, entrepreneurial, ecological and financially self-sustainable Local equilibrium is pre-condition for social equilibrium. Empowerment Teach/Start Entrepreneurship or build on already established entrepreneurs ? Cooperatives, Renewable Energy Villages not only labour or consumer markets, but to develop them to entrepreneurial ProSumer Markets.

The Logical Chain of our Theory of Social Change could be something like this:

Raise Awareness of Problems and Opportunities (what is the endogenous potential, positive and negative, of the communities) (Information system needed, transparency) --> Reanimate them to Living communities / Empower the communities slowly and constantly Empowerment means in this context: Identification with THEIR community, ownership of change process and direction, provide entrepreneurial opportunity space or opportunity to create this e. space, ("window of opportunity" from Drucker), --> Impact Assessment (e.g.): - Income generation - Community Debt decreased - Village Happiness Scale - Ecological Benefits (animals, trees increase!) --> Go to the Meta-Level by developing the projects/ideas into national programs and paradigms.

In my opinion, the ONLY REAL bottleneck in our model are the: PEOPLE! The beauty of this is the following: If we can empower them to take ownership of their change, this bottleneck becomes a great amplitude to offer endless opportunities and becomes self-sustainable!

Carlos/Chris, the two links your provided, People Centered Development forum, Business Alliance for Local Living Economies, are there already going in this direction? Or Chris, maybe Feasta?

2) Start 2 or three projects in Europe, USA and developing countries (India, South America e.g.) in order to see what is possible ( and what not), come to some Business model typology.

Sample projects could be: a) Village Democracy via IT Problems: Low election participation, no identification with Politics (starting in the villages' youth, evolving to national politics), established village elite in power for several years, low-range corruption and scandals, political frustration, etc. New Idea / Strategy of Change: Building on existing IT infrastructure ( Mobile Phones, Blogs, Homepages, Pics on Google Maps, Online/Mobile Surveys), to bring transparency, identification and ownership to local politics. This bottom-up approach can change national politics too. ...

b) Teaching Nature to the kids Problem: Quite a few German urban kids think that a cow looks like the Milka Cow (its purple!); or do not even know 2 or three trees/animals from the national nature. How can you protect the nature/go green, if you do not identify with it? On the other hand, there is minor and decreasing village tourism in Germany (means less income), but people fly to the Amazon to see the rain forest there. That's paradox! New Idea / Strategy of Change: I, personally, want to try something in my village. I travelled as a backpacker in South America, India, East Europe and Namibia, Africa. Now I want to give something back to my local community, especially the youth. Once a year, on a summer-weekend, there is an event called "Holidays in the village". In 3 days, the kids paint together, do some sports etc. organized by 2-3 volunteers, mostly women in their 40's and 50's. One night the kids are camping. However, they are camping near the forest but rarely go into it. They are AT the forest, but do not go into it. Some friends and I plan to take the kids on a half-day tour into the woods: show them how to make fire, do some nature games which build on their self-confidence, teaching them some natural secrets, etc. It's on a weekend, so we do not need to sacrifice any of our holidays and we have one day in the year where we all meet up with our buddies. Moreover, the event is connecting 3-4 generations (kids, us (20-30s), parents (40-50s), ...) and we are educating our future nature-teachers! The big vision I have here: Japanese/Chinese ()visiting ecotourism villages and local people seeing their garden and nature with different, entrepreneurial eyes and seizing their opportunities!

All these initiatives are low-tech, and low-monetary. They do not even need a lot of time or people (Guerrilla marketing techniques). I would put them into the business model field: Citizen-based, not for profit projects

Another field could be Chris' Partnership model and what Carlos and I discussed with the car sharing, Renewable Energy, Cooperatives etc. projects. These kind of projects need more people, technology, and capital (monetary primarily). However the key here is to make a quick/medium RoI (social and financially) but on a long-term partnership basis. A nice fit-in-between the first and second field, would be the re-establishing of local markets: Maybe not with a lot of pre-organizing and formal structure, but just giving them a place for their ideas/Products: See Scott Burnham's Post on Micro-Entrepreneurs and Endossa! (Like see said: Endossa is the non-digital, real life manifestation of blogger or digg!)

A potential third field could be ventures or initiatives from the first field growing into national initiatives/programmes.

Another possibility is to arrange the projects along the axes: Strategies and Constraints See: UN Growing Inclusive Markets or Changemakers.net Mosaics (However, I personally think, social solution matrices are much more than Rubik's Cube because of the multi-dimensional and connected nature!)

Moreover, in Germany, every village and city has multiple "village-partnerships" with other villages in France, USA, Africa, Asia, etc. So we can use this partnership channel to disseminate your projects and know-how. It's a good multiplicator effect (medium-strong)!

3) Do some academical back-up and find support in this area. Writing some academic papers, evaluation (Joint and independent) of output and impact, doing case studies with students, maybe even a course or certification in the long-term, etc. I do not know what exactly you guys are doing, but point 3 would easily fit into my normal work.

4) ...

5) ...

All this are just some thougths/impressions, merely first ideas. Some questions to think: - How can this first ideas transformed into real innovations, creative destruction style like Schumpeter? - How can a social business model be built on this? How to get revenue? - What will change in the future? What will not change? How to built on this?

Coming back to the original topic, Capital and community: I just read David C. McClellan "The Achieving Society", chapter 10 (p. 364/365) is especially interesting:Prof. McClelland investigates the relation between motivation/performance attitude and economic growth. The proxy or the missing link between the two is the Entrepreneur. However, he says that economic history/data showed that there is no connection between a high capital input (into a society) and growth in wages (although economic data is not very well provided for former centuries).

Yours sincerely,

Simon

Local living economies can serve to preserve and improve the health of our community and planet. For the people in our community a local living economy means access to jobs, health, education and opportunity for peace.

Every culture has values that drive affinities, social networks and economic interests. By encouraging entrepreneurs to develop enterprises that lead to a local living economy we can influence our cultures to move towards a positive future. Local living economy enterprises value community and sustainability in all aspects, social, economic and environmental.

To be successful local living economy entrepreneurs we will work towards becoming proficient at, thinking together, collaboration and risk taking.

Example of metrics: Federation of Canadian Municipalities Quality of Life Indicators http://www.fcm.ca/English/View.asp?mp=477&x=1043

Simon, I like it!

It would probably help if I explained the project a little and my perspective. I am an entrepreneur. My particular interest is enterprises that lead to a local living economy; I have focused my energies in poverty reduction by looking at housing, access to credit, credit product development and self-employment, as well public policy to promote local investment.

I like the idea of organizing my efforts based on a community investment strategy. Part of my strategy is to inform the entrepreneurial spirit of my community about the opportunities a local living economy has to offer. That is why the business model we are developing is a cooperative enterprise school.

As a self-employed entrepreneur and father of a one year old I can contribute by sharing what we are learning and providing peer support where possible. The cooperative enterprise school is a for profit project, I have incorporated an LLC to facilitate it.

Maybe the idea is a community website where social entrepreneurs self-register their project, contribute to a reference library / on-line tools section and offer peer support. If we start with something very simple and with low entry barriers then maybe we can be encouraged by the number of people working towards a local living economies in their communities. If there is larger bigger need it will manifest itself and the resources will then come along.

Happy New Year! Carlos

By cultivating trust among community networks we can develop the community-will necessary to implement initiatives that lead to a local living economy. Our no enrollment requirements aim to bring together community intelligence that can help us develop social capital. To produce results a local living economy investment strategy needs social capital, it is just as important as good idea in attracting investment capital.

Creating and maintaining local living economy is a discovery process. The following principles guide our actions and interactions on our discovery path:

Community - We believe that the strength of a community is measured not by its buildings or location, but by the networks of relationship and trust that exist between its members.

Respect - We honor each other's gifts and differences, and value each other’s potential to contribute towards a livable planet.

Sustainability - We intend to demonstrate our respect for our planet and the greater community by making responsible trade and business choices.

Curiosity about your community and how it works can help you build social capital. I was curious about the St. Michael’s Parish School. I called the real estate agent and then met the owner, asked her what her plans were and found that she needed help. The buildings were zoned as single family residential. In reality their historic design would not make them a viable single family home. So we needed a zoning variance.

As we walked through the buildings she suggested that I come up with a school concept to use the buildings. We documented the problem and met with borough planning commission. I worked on school concepts, which lead me to the guild idea. The commission was happy to see the analysis and recommended our proposal.

Starting this project took one phone call.

When you begin to speak about starting your own business people will warn you about the high failure rate, “Half of the businesses fail in the first two years!” Your friends might warn you. What the statistics don’t show is that being an entrepreneur means you are willing to learn what works and what does not. I haven’t seen any statistics on how many “failed” entrepreneurs start another enterprise.

If you are an entrepreneur working towards contributing business models that lead to a local living economy, then you must be willing to learn. “We tried that and it did not work!” If you don’t know why it did not work, then you just wasted your time.

In our case we are about to learn if it is possible to structure a capital partnership and how. Is it possible to convert your market research efforts into community organizing and then turn it to a cooperative? If we fail we will know why and try again incorporating what we learned.

In our community needs that are not met by the “market” go to the underground economy. For example, tough neighborhoods have limited transportation access, don’t even try calling a taxi, it will never come! That is why the jitney came to existence. A jitney is an illegal taxi, usually driven by people that cannot easily obtain a job. Driving a jitney is just as dangerous as riding one. However, if it is your only transportation option, one takes that risk.

How do we develop an alternative business model that meets transportation needs of low-income communities in a safe and reliable way? Are there ways to structure a jitney like service that provides drivers independence and consumers safety? Those are the type of needs an entrepreneur working towards a local living economy can explore. Hopefully by engaging our entrepreneurs’ imaginations we can develop business models that can compete with the underground economy or market providers that discriminate.

To engage entrepreneurs’ imagination our school will provide education opportunities based on these themes; - Green business development - Community health business development - Social enterprise as small business development - Open source software for small business

Here is an example of a housing business idea that can be combined with Chris Cook's financing model. The goal is to produce more sustainable housing socially, economically and environmentally.

Home Store Business Concept http://www.slideshare.net/cgasca/home-store-presentation

Chris Cook finance model http://www.slideshare.net/ChrisJCook/equity-shares-a-solution-to-the-credit-crash-presentation

Next Home McGill University by Avid Friedman, the website is not so good. Order the book it is better! http://homes.mcgill.ca/projects/next/next.htm

Resident driven housing development http://www.cohousing.org/

How to start an Inner City Housing Factory by Don O. Carlson, Editor & Publisher, Automated Builder http://www.automatedbuilder.com/products.htm

The Home Store business concept was developed to meet the demand for housing in a market where there was more jobs than housing. In our town there are more housing units available than jobs. Yet, with the abundant supply of housing, there is a shortage of appropriate housing solutions.

Our seniors are aging in their single-family homes, which is an un-tenable position due to maintenance, increased utility bills, while on a fixed income. A home store business model could be adapted to provide seniors a turnkey relocation method that takes into account their lifestyle, finances and health. Combined with financing alternatives such as cooperatives, trusts and capital partnerships it may be possible to establish a viable business model. Such business model would permit seniors to move from their single family residence to housing they can afford in their community and allows them maintain a high level of independence.

Providing a creative environment where entrepreneurs can explore markets like the one described above is part of the schools goals.

Meeting the housing needs of seniors in a way that they can remain in their community strengthens the local economy. By providing appropriate housing to seniors they can stabilize their housing expenses, which can improve their finances. Their local spending helps retain vital business districts that are a source of jobs. It is also possible that it would improve their health, reducing medical costs.

From CNN: "More people often become self-employed in tough times like this," said John Challenger, CEO of a top employment firm for executives and middle managers.

Between 5 percent and 7 percent of clients at Challenger, Gray & Christmas are choosing to start their own businesses, he said. Workers are more open to starting a small business in the dot-com era, Challenger said. "I think we're in a more entrepreneurial period than we were in the '80s and '90s," he said.

Recessions can be "crucibles" for at-home start-ups. "Some of the best new businesses start in recessions because what they have really makes a difference if the market is interested in it," Challenger said. "There's not a lot of easy money to go around, and they have to fight their way forward."

Full Article: http://www.cnn.com/2009/LIVING/worklife/01/12/entrepreneur.psychology/index.html?iref=mpstoryview#

Ideally, establishing the school in our town would result in more local jobs. An excellent result would be leasing our vacant commercial real estate to our new entrepreneurs. At the very minimum more people will create their own jobs or become employed as result.

Our previous experience running a micro enterprise program showed that entrepreneurs were willing to hire our graduates, even if they were not “certified”, because they understood small business.

From an economic development perspective the project seeks to contribute to our community’s tax base, rehabilitate three historic properties and attract more people to our town. Our school would be a destination business.

To learn more about destination businesses see: http://www.destinationuniversity.com/

So, how is our business model different? Our business model is multi-dimensional, it seeks to increase local economic opportunities, facilitates the flow of community intelligence “learn so you can do…” and focuses its efforts in encouraging a local living economy to grow.

Curriculum content is projected to be 35% computer classes (open source focus), 45% social enterprise & small business development, 20% culture and home life. In addition there will be a social enterprise apprenticeship in residence. Our hope is to collaborate with local entrepreneurs and education initiatives to form an apprenticeship curriculum advisory group. The advisory group would also select students for the apprenticeship based on their social enterprise proposals.

To provide instructors we are organizing an instructor cooperative. Our concept is based on providing affordable, convenient, high quality learning opportunities at a high volume, affordable price/high volume = profits. No loans would be required and a lay-away plan would be available to students. The instructor cooperative will partner with an LLC, which would provide management of facilities and assets. The LLC consists of social investors and capital partners.

As our school business model calls for a high volume of classes we need many instructors. The best way to facilitate instruction was forming a worker owned co-op. As the instructors co-op develops, membership dues help finance early stages of the venture.

“We think of what we want and why it doesn’t exist. That is where we begin.” Satoshi Yasui, Muji Design Team Leader.

That is the kind of curiosity that creates opportunity. Although the statement is an expression of Muji Design’s approach, it may also serve as a working premise for social entrepreneurs.

Let’s try the above premise, with transportation in mind. In my community I notice that people have limited transportation options and public transit is a substantial investment of time. Ideally, it would be a priority investment for our community. Unfortunately, it is not likely to get better any time soon as population is not growing.

How about selling Green Custom Cars? These would fuel-efficient cars, 35 mpg plus, and reliable performance (Reuse). They could be older cars, lower price and more affordable (Recycle). Used fuel-efficient cars converted to run on lower emission fuels such as, natural gas and biodiesel (Reduce). The candy wrapper is that you can customize them to suit your personality, you can afford too, if you want too!

How and what would you sell them for? Could you buy them on a fixed payment no interest? Could you sell them on short lease terms, less than two years? Could sell them using a community network approach?

There are many community health business opportunities in the preventative health care realm. These business opportunities can range from helping people eat right, exercise, adapting homes for seniors or disabled individuals or setting up a Wii gym for kids.

A preventative health care clinic could be a worker owned cooperative; in this case a group of nurses would own the business. It could make a lot of sense for them; typically nurses are underpaid, overworked and have little say on patient health care. Or it can be set up by a community (consumer owned cooperative) to meet preventative health care needs in their area.

Community health business opportunities can be big or small for example, Group Health Cooperative, based in Seattle with nearly 600,000 members. Or they can be small and worker owned for example, Cooperative Care, Wautoma, Wis., is an employee-owned cooperative of caregivers providing personal and home care services in Central Wisconsin.

If a need in your community is not being met, don’t assume it is not possible to meet it.

In a resident driven development would be homeowners form their own development company to create their own housing development. Yes, they want a product that works for them so much that they are willing to take the risk of being their own developer. A risk that is mitigated as the cohousing community has developed a robust knowledge base to encourage success. www.cohousing.org

What we can learn from the cooperative and cohousing movements is that you can organize your own resources to meet your community’s needs. Government, private sector, charity or faith groups may not be addressing the needs of your community. Perhaps because it is not clearly in anyone groups territory. Today, you have a lot of corporate forms to choose from. Taking the time too understand the problem you are seeking to address, then selecting the corporate form to organize your community resources could be beneficial.

Adult Education Trends and Issues in Europe is a very thoughtful analysis. Clearly adult education opportunities can leverage social capital, strengthen community networks and provide new sources of economic value. In this paper “locally determined adult learning opportunities” are seen as a vital part of the strategy. (See executive summary part 2.)

http://ec.europa.eu/education/pdf/doc268_en.pdf

The Globalization and Europe section describes the impact of our new trade patterns. “Individualisation goes hand in hand with globalisation; self-identity has to be created and recreated more actively than before. There is rising conflict between cosmopolitanism (the acceptance of variety and differences) and fundamentalism.”

“National, regional and local economies depend on the dynamics of the global economy to which they are connected through networks and markets.” The paper goes on to describe the value that of “locally determined adult education opportunities”. It seeks to establish the economic and social benefits of investing in adult learning opportunities.

Developing a sustainable business model for self-determined local learning opportunities is the purpose of this venture.

In discussing this venture with potential investors I have been asked, are you competing with community based learning opportunities? Maybe in the sense that all schools appeal to people who want to learn. However, one also needs to keep in mind that people who want to learn is a large market and there are many different type of customers.

A self-sustaining democratic business model ensures access to learning opportunities for all. In this case we are introducing a new approach to providing learning opportunities. An instructor cooperative invests in creating the learning facility and marketing support to promote their learning opportunities. The viability of the business model is a transaction of equals between students and instructors. The cooperative is not viable if students are not willing to pay for courses. The instructors are motivated to provide classes that the community wants.

It has taken sometime to understand the nature of this business model. Here are the highlights. Is it possible that something like this could work in other parts of the world?

Startup! Is an entrepreneurial arts & culture school, entrepreneurial courses include; green businesses, community health businesses, social enterprise, open source business systems and small business development.

Classes are affordable because the school is owned operated by the instructors.

Our instructors are committed to exploring and discovering business models that contribute towards a local living economy and livable planet.

The cooperative will establish a fund to capitalize local living economy business startups. Instructors will allocate a percentage of patronage returns to capitalize the fund.

Our goal is to establish a consistent, community focused and sustainable source of innovation working towards a local living economy.