Developing the Capacities of the Digital Social Economy (D I SE)

Leslie BuddOpen University Business School

Open University UK

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Centre for Public Leadership and Social Enterprise

• Context of re-structuring of Public Domain and re-inventing government discourses associated with New Public Management (NPM);

• Over-ambitious claims for utility of Information and Communications Technologies (ICT) in transforming the public domain and addressing the claimed inefficiencies of the public sector under guise of Digital Era Governance;

• Promise of Electronic Governance (eGovernance) and eGovernment opens up possibility of eParticipation and eDemocracy in combating social exclusion;

• Explore challenges in context of EC-funded eGovernment for You (EGOV4U) project

• Create and apply concept of Multi-Channel Governance as central to developing idea of a Digital Social Economy and its capacities.

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1. Apply research expertise on the role of eGovernment services in enabling social inclusion for digitally excluded communities in order to develop new social economy models based upon spillovers and externalities generated from these activities.

2. Develop a multi-channel network approach that combines ICT networks and eService networks as the conceptual foundations of the technical means and the intermediary organisations, respectively, to build and deliver these models based upon a identifying and developing their capabilities.

3. Draw on the internationally comparative experience of eGovernment for You (EGOV4U) projects in Reykjavik, Iceland, and Rijeka, Croatia, in levering new economic activities from these projects, so as benchmark best practice for UK contexts.

4. Identify and evaluate the scale and scope of transactional and transformational economies generated from ICT-mediated social inclusion projects that form the basis of new digital social economies.

5. Survey and evaluate the activities of UK-based social enterprises and other Third Sector organisations engaged in eServices activities and their integration with new economic activities.

6. Integrate research findings with work of other digital and social economy networks in UK and the rest of Europe as part of impact and dissemination strategy.

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Multi-channel ICT networks: These are the technical means by which

eGovernment services are enabled and include, inter alia, internet and web-

based ICT; mobile telephony; call centres etc.

Multi-Channel Electronic Service (eService) and User Networks: These

types of networks are the means by which citizens and communities are able

to access public services that they may have been excluded from because of

different forms of social exclusion. This exclusion may be characterised by

lack of, or poor, access to ICT-based and mediated services. The different

channels may be accessed directly or through intermediary groups, including

inter alia, Non-Governmental Organisations (NGOs), social enterprises and

community groups.

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• Combines one type of multi-level governance with concept of globalizing webs:

“a system of continuous negotiation among nested governments at several territorial tiers…. in which] “supranational, national, regional and local governments are enmeshed in territorially overarching policy networks” (Marks, 1993), of which there are two types:

1. Akin to federalism, this consists of limited and non-overlapping jurisdictions within a restricted number of territorial levels. The focus is on specific governmental purposes rather than a set of policies or issues;

2. Is a more complex and fluid type that consists of a larger number of overlapping and flexible jurisdictions with a focus that is much more on specific policy sectors and issues. Like most governance structures there is a tendency to instability as the policy environment alters, but it is designed to seek optimal decision-making (Hooge and Marks, 2004).

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The concept of ‘ globalising webs' has been used to investigate the increasing transnational narrative of eGovernment. In this regard it has been argued that globalising webs:

“can be seen as one organisational instantiation of how social processes are increasingly unhindered by territorial and jurisdictional barriers and

enhance the spread of trans-border practices in economic, political and social domains.” and,

“Globalising webs challenge conventional distinctions between the inside and outside of the nation-state … In fact, they connect state institutions

across this distinction, across local and national levels of the state and relate them to a host of different actors, including non-state actors and hybrids, indeterminable organizational forms that do not match conventional distinctions between public and private.” (Hansen and Salskov-Iversen, 2005)

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There are three approaches to governmental logic of ICT (Clarke, 2009)

• As the inheritor of government logics: ICT provides governments with enhanced information management capacity over services and about citizens.

• A paradigm shift from government to governance: the connectivity of digital technologies enables the multi-ness of governance relationships to be realised and conducted thus cross-cutting conventional boundaries.

• The re-configuration of managing multiple centres of power: it is increasingly averred that ICT enables greater interaction between the citizen and government and governance agencies thereby increasing empowerment.

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Rest on Habermas’s Theory of Communicative Action combined with Bourdieu’s theory of practice rooted in his different forms of capital in regard to his concepts of field and habitus to overcome lack of theory of power in Habermas’s theory

“a theory in which actors in society seek to reach common understanding and to coordinate actions by reasoned argument, consensus, and cooperation rather than strategic action strictly in pursuit of their own goals’ (Habermas, 1984)

Two societal spheres:

•the system: material production and reproduction. •The lifeworld’: symbolic space in which shared cultural traditions, values and norms are reproduced through an ongoing process of communicative action

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Capitals: the resources that comprise a field.

Field: “…a relatively autonomous structured domain or space, which has been socially instituted, thus having a definable but contingent history of development. One condition of the emergence of a field is that agents recognise and refer to its history. Some fields have more autonomy than others and some parts of fields more than other parts”. (Warde, 2004).

Habitus: a set of acquired patterns of thought, behaviour, and taste to constitute the link between social structures and social practice (or social action). In this sense, habitus relates to both social and geographical spaces that can be virtual and real.

Practice = (habitus * capital) + field


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1. Financial capital (actual or potential): Direct or indirect control of financial resources through access to banks.

2. Cultural capital: Not human capital but capital drawn from cultural “habits and dispositions” comprise a resource capable of generating “profits”; they are potentially subject to monopolization by individuals and groups; and, under appropriate conditions, they can be transmitted from one generation to the next

3. Technological capital: Portfolio of technological and technical resources.4. Juridical and organisational capital: Access to regulation and rules

conditioning the management of resources.5. Commercial capital: sales power related to distribution networks; after-sales

services6. Social capital: Total resources including financial capital and information goods

activated through relatively mobile and extended networks to achieve some form of competitive advantage (higher returns on economic and social returns on investments)

7. Symbolic capital: Control of symbolic resources in the form of knowledge and recognition which bestow power through the medium of trust relations;


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HabitusDispositionsPrinciples of actionand classification

FieldPositions,Forces (relationsbetween)

CapitalEconomic, social, cultural. etc

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HabitusDispositionsPrinciples of actionand classification

FieldPositions,Forces (relationsbetween)

Multi-channel ICT networks

Multi-channel eService and user

networks

Multi-ness of Governance

Habermas System Lifeworld Communicative Action

Bourdieu Field Habitus Practice

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Transactional economies are associated with aligning internal operational decisions of multi-channel eService providers with service transactions. These economies relate to current or backward-looking perspectives of the organisations they occur in. They are set in relation to the costs of administering or running a provider organisation and are thus closely related to transactions costs.

Transformational economies are associated with strategic decisions over the outputs of the multi-channel eService and responding to and influencing the (democratic) governance and regulatory environment. They tend to be associated with forward-looking perspectives and are set in relation to external goals and transforming the performance and future of the community or society.

A transaction space is defined as:

‘an abstract n-dimensional space defining the institutional, legal, cultural and language differences that must be

accommodated if a given transaction between two or more agents is to take place’

(Wood & Parr, 2005; 4).

• The idea of a transaction space is one that is developed from the relationship between transactions costs and agglomeration economies.• In more homogeneous transaction spaces, transaction costs are lower;• In localities (real or virtual) with excluded eGovernmental communities the transaction costs of overcoming digital exclusion will be higher because of the heterodox nature of their transactions spaces.

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•Each EGOV4U locale has its own Socio-Economic Capacities and Capabilities (SECC) which will increase as a result of the development of eGovernment services;

• The EGOV4U programme creates a field of transactions in which the on-line public services generates Transactional Economies in the form of increased efficiency and equity in public services ;

•Intersection and alignment of EGOV4U Community Capitals (based on Bourdieu’s categories) create EGOV4U transactions space within each local Habitus

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Three types of agglomeration economy:

1. Localisation: take the form of pooled labour markets and shared market intelligence in the same activity in a particular locale

2. Urbanisation: For unlike activities in the same place, the provision of transport infrastructure, research and development facilities

3. Activity complex: they refer to economies that emerge from the joint location of unlike activities which have substantial trading links with one another’ (Parr and Budd, 2000; 603).

• Transactions costs are “the costs of doing business” (Arrow 1962). • Thus the digital and eGovernmental exclusion of communities can

be seen as a transactions cost to these communities. In developing networks that build on different forms of capital, transactions costs become an important consideration.

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• The creation of infrastructure and access to eGovernment services provides socially excluded communities with socio-economic capacities and capabilities (SECC) in each EGOV4U locale and habitus;

• The formation of SECCs permits be from access tobe generated eGovernment services for socially exclude groups in the form of new economic activities, income and employment;

• By gaining a range of capacities and capabilities from digital inclusion, these groups are being re-inserted into the socio-economic mainstream by developing them to create new economic activities.

• Social enterprises and other Third Sector organisations (charities, etc) have shown are important intermediaries in delivering the means for digital inclusion and the development of multi-channel eService networks.

• By combining these networks with ICT networks, the basis of new models of the digital social economy can be demonstrated.

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• Business Model Formulation and Adaptation: Business models can be thought of as the content, structure, and governance of transactions designed so as to create value through the exploitation of business opportunities.

• Creating and Sustaining Public Value: The rise of the digital economy and the appropriate use of ICT media can contribute to greater public value by exploring how competitiveness and cohesion may be integrated more effectively. By creating economic models in which collaboration between public domains is a central strategy, a more comprehensive virtual and real social economy can emerge.

• Societal economic impacts: The concept of transformational economies and their application are important outcomes of evaluating key issues and questions that arise from developing a digital social economy. They act as an important point of reference point in an impact evaluation framework that is central to the research narrative so that impacts and the spread of benefits is more widespread.

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• How are eService channel networks to be identified and what is role of intermediary organization in the delivery of transformational economies?

• How can best practice from cases the rest of Europe be contextualised as benchmarks for UK experience and elsewhere;

• How the rudiments of digital social inclusion projects as incipient business models be developed into more comprehensive models of the digital social economy?

Developing the Capacities of the Digital Social Economy (D I SE)

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