Berggruen Institute Releases Blueprint for Cities to Challenge and Transform Digital Capitalism
After the pandemic exposed gig economy firms as exploitative of workers and unsustainable for consumers, the Berggruen Institute has released plans for creating sustainable gig economies that promote shared economic growth and well-being. In “Policies for Cooperative Ownership in the Digital Economy,” four leading scholars of worker-owned enterprises describe how governments can encourage the creation of platform cooperatives, digital on-demand service providers like Lyft and Instacart that are owned by their workers.
The paper was co-authored by Trebor Scholz, a Berggruen alumni Fellow, Director of the Institute for the Cooperative Digital Economy at The New School and Affiliate Faculty at the Berkman Klein Center for Internet and Society at Harvard University; Morshed Mannan of the European University Institute at Leiden University; Jonas Pentzien of the Institute for Ecological Economy Research; and Hal Plotkin, former Senior Policy Advisor at the United States Department of Education.
If you look around the world, you see many examples where cooperative ownership has been proven to work in providing consistent, high-quality services while generating substantial returns for workers.
“The gig economy epitomizes what’s gone wrong with our economic system in the last fifteen years, with a few investors earning massive returns while workers and consumers are left holding the bag” said Scholz. “We’re giving local governments the tools to cultivate a new kind of technology enterprise, and a new kind of capitalism.”
Among other policies, “Policies for Cooperative Ownership in the Digital Economy” calls for preferential tax and procurement treatment for cooperative enterprises, new mechanisms for non-equity finance, and “data commons,” repositories of data to be shared among platform cooperatives. These and other measures could help platform cooperatives compete more effectively with investor-owned firms in areas including transportation, food delivery, and professional services.
The paper’s findings are based on analyses of locations around the world where platform cooperatives have enjoyed success. One example is Barcelona, where city policies like procurement standards that enforce public ownership of data within private contracts have aided the emergence of worker-owned digital marketplaces like Katuma, which connects food ingredient buyers to local sources of produce, and Guifi.net, which helps provide internet access to rural areas. Other case studies outlined in the paper include California (US), Kerala (India), and Preston (UK). In recent years, interest in platform cooperatives has risen to the highest levels of government, with support from US Senator Kirstin Gillibrand and UK opposition leader Keir Starmer.
“If you look around the world, you see many examples where cooperative ownership has been proven to work in providing consistent, high-quality services while generating substantial returns for workers,” said Scholz. “We wrote this paper to show skeptical audiences that platform cooperatives can in fact work as a viable form of enterprise.”
Platform cooperatives fit within the Berggruen Institute’s vision for a new capitalism where broadly distributed wealth is more wisely invested, and where the public earns a large share of the return on its investment in new, disruptive technologies. Other projects include efforts to design and institute radically new public investment institutions to build wealth and plan for the needs of future growth, and taxation and public development policies to create public digital goods and enable a more dynamic, democratic ecosystem for digital entrepreneurship.
“Excessively concentrated wealth leads to extractive business models that deliver little long-term value to workers, consumers, and all but a few investors,” said Yakov Feygin, associate director of the Future of Capitalism program at the Berggruen Institute. “With the policies in this white paper, local governments can lay the foundation for a form of capitalism that is at once more dynamic and more inclusive.”
This white paper continues Scholz’s groundbreaking research and advocacy on behalf of cooperative ownership of digital networks. His 2016 book, Uberworked and Underpaid: How Workers are Disrupting the Digital Economy, explored how workers can take matters into their own hands to shape a secure and sustainable future in the digital world. This study also articulates longstanding Berggruen Institute thinking on the economy. These principles were outlined in Institute co-founders Nicolas Berggruen and Nathan Gardels’ 2019 book, Renovating Democracy: Governing in the Age of Globalization and Digital Capitalism.