The failure to mention crowdfunding as a core component for the European Commission’s € 315 billion Investment plan is an oversight, but it can, and should be remedied, and here’s how.
On Tuesday Jean-Claude Junker President of the European Commission announced a € 315 billion Investment Plan to get Europe growing again and get more people back to work.
The plan includes a commitment of € 21 billion coming directly from the Commission and the European Investment bank, other flows from public and private sources which will be multiplied and leveraged to a target of € 315 billion over the course of 3 years.
It is fair to say that much of the comment, certainly the critical comment, is in large part aimed at what is seen as unrealistic multipliers to make a € 21 billion seeding become € 315 billion in three years, the General Secretary of the European Trade Union Confederation (ETUC) describing as a financial miracle comparable to “loaves and fishes” for example.
What strikes me as so astonishing is that in all of the fact sheets, press releases, documents and website I can find no mention whatsoever of crowdfunding being able to play a part in this. Not one mention.
Before anyone suggest that crowdfunding is much too small scale to significantly contribute I would point to World Bank estimates suggest that crowdfunding in the Developing World alone could be worth $90 Billion within 20 years. Think then what we might achieve in Europe?
Over and above the funding we also know that crowdfunding brings many additional benefits including speed to market, job creation, innovation, validation to attract other funding not to mention its democratic engagement and redistributive strengths. All of these things are to be welcomed in a severely damaged and unequal continent.
A key question is what might Mr Junker and his team do to nurture this?
Working with Dr Dan Marom, a leading and respected consultant author and researcher in crowdfunding and regular collaborator with twintangibles, we have developed a model for public bodies to design interventions to encourage crowdfunding.
The model describes 4 main groupings of interventions those being
- Infrastructure – Building an eco system and supportive environment to make the process of crowdfunding easier and more readily available
- Education – Building awareness and understanding and skills of all participants
- Matching – Collaboration to extend available funds, co investment, target resources, adding brand capital
- Leverage – Building on crowdfunding activities through additionality, scaling and other enhancing activities
These are all subject to ongoing innovation but together can be used to analyse, design and construct a sophisticated and nuanced set of approaches design to directly and indirectly encourage the growth of crowdfunding responsive to local needs and condition and in a public and civic context.
Building a pan European plan to help Europe to help itself through crowdfunding is perfectly possible. This model provides the mechanism to begin that process.