Second site: Liberate your lawnmower

Marek Kohn
Sunday 07 March 1999 00:02 GMT

IF THE Internet could do for window cleaners what it has done for lovers of Old English poetry, we might have an industrial revolution on our hands. The Net has worked wonders for the mosaic of small and modest cultures that make for a happy civil society, but when money changes hands, it favours the mighty. Faced with bewildering choice, consumers make for the big brands; either ones that they already know from the real world or, if they're shopping for books, In time other Internet names will achieve Amazon's brand recognition, but they'll need vast amounts of money to do it, and they will want plenty from their customers in return.

Having drawn a consumer to its "portal" site, a big digital commerce enterprise secures its hold by taking the shopper's particulars and building up dossiers on the individual's shopping patterns. The goal is, in the sinister phrase noted by Wingham Rowan in his book Net Benefit (Macmillan, pounds 25), "owning the customer".

According to Rowan, though, there is an alternative. Rowan's big idea is Guaranteed Electronic Markets. A Gem is an automated trading system, guaranteed by bonds posted by traders as surety against failure to deliver their side of their bargain. Rowan envisages that the likelihood of a Gem service performing satisfactorily would be indicated not by its brand name, but by its track record of previous transactions.

Thus, window cleaners offering their services in the domestic cleaning Gem would indicate how many hours of work they had completed satisfactorily. There would also be a record of how many complaints had been made against a trader, and how many upheld. Gems, Rowan argues, would tap a vast reservoir of labour, skills, capital and material resources. Because the cost to both buyer and seller of using the system would be very low, and its communication efficiency very high, a Gem would act in just the opposite way to Internet commerce; there would be no great advantages to being big. Three independent coach drivers in Cardiff, for instance, could compete successfully with drivers at Stagecoach.

Because they match buyers and sellers so effectively, Gems would also offer unprecedented flexibility to those who want to ply several different trades. "It will encourage the blue-collar workforce to trade on its own terms," Rowan predicts. And at the other end of the scale, somebody with a few million pounds temporarily unassigned could use a Gem to invest it. Investors could decide the duration and level of their own risk; the Gem could divide the investment up and inject it into hundreds of tiny corners of the economy, releasing resources such as a lawnmower in somebody's garage that was only used at weekends. "Atomised capitalism," Rowan calls it.

You could access a Gem using personal computers, terminals in public places, or interactive television sets. But while the costs of user access would be low, establishing a GEM system itself would be immensely expensive. "A public electronic market is a natural monopoly," says Rowan, who recommends that governments award it to private consortia. These would shoulder the costs and risks of establishing the Gems, while franchising individual sectors. Media companies might take a leading role in these consortia.

Rowan has written about Gems under the auspices of Demos, the centrist think-tank. Like so many Third Way ideas, Gems prompt mixed feelings. Young people would be looking at 50 years of keeping their trading record figures up to scratch. And the political influence wielded by the chosen consortia would be immense, especially if something like News Corporation were in the driving seat.

But the idea is still tantalising. If Rowan is right, and the immediate impact of Gems would be to bring those marginalised by the current economy in from the cold, then this high price may be worth paying.

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