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Equity of value distribution: new frontier of activity acceptability

By Thomas Busuttil (founder of Imagin/able) - 03/02/2017

Faced with increasingly widening inequalities, new models of distribution of values are part of the collaborative society

Growing inequalities that question decision-makers

8 individuals today alone possess as much wealth as the 3.6 billion poorest people in the world. And this trend continues to grow, especially in OECD countries which see the share of labor compensation in national income declining year after year. From a more micro-economic point of view, and beyond the old problems of distribution of value in the supply chain (cf. annual negotiations of large retailers), we are witnessing major upheavals with the arrival of new economic models and the platform economy, gradually leading to the blurring of the boundaries between producers and consumers. This no doubt reflects an evolution in the very conception of value, the only transactional economic value being enriched by other constituent elements such as the creation of social ties or flexibility in the organization of working time.

This leads us to reflect on what a “fair” distribution of value can be in today's economy.

First observation, this principle of equity can result in different approaches depending on the actors involved (sector of activity, legal form, history, culture, etc.).


It also presupposes that there are differentiated “benefits for everyone”, in other words that go beyond a simple principle of equality to integrate the complexity of today's world (globalization, platform economy, etc.).

Finally, the apprehension of the fairness of the distribution of value must be done at several levels: at the level of the global perimeter of the company and at the level of the business model of each product and service (the two can be joined). It is undoubtedly the ability of the company to ensure the overall consistency of this distribution of value at all these levels which remains one of the major challenges to be met.


Variable business models but common distribution principles

In practice, it is very difficult to bring out guiding principles applicable to all economic actors because the practices differ very widely and are most of the time the result of a corporate culture crossed with variable market constraints. .

Thus, the analysis of cash value distributions presented in the latest financial and extra-financial reports reveals that between an agricultural cooperative, a family business and a listed group, the share of redistribution to employees, shareholders or suppliers varies significantly.

Careful observation of the operation of successful companies and of societal trends (horizontalization of society, search for meaning by consumers, etc.), nevertheless makes it possible to highlight key principles to be integrated in order to promote this equity:

•     Integrate an extra-financial dimension into the value: the diversity of expectations of the players in an ecosystem favors the emergence of extra-financial counterparties beyond the single transaction;

•     Moving from a "client/subcontractor" posture to a "partner" approach: the reduction of barriers to entry allows the appearance of new, more agile players who challenge the sometimes very "top down” historical players;

•     Correlate the redistribution of value to the durability of the relationship: faced with the complexity and acceleration of society, the durability of the link between the actors seems to be a central asset for promoting trust and ultimately the development of the activity;

•     Guaranteeing transparency on the value actually redistributed (in all its forms): with the development of immediacy and the gradual disappearance of secrecy, the lack of transparency is today one of the most frequent points of controversy.


The redistribution of value in the emerging collaborative society

For 10 years, the concept of collaborative economy has experienced real growth and its market should represent 335 billion dollars by 2025. And this in all economic areas.

When we observe the different actors more precisely, we realize that it is not in fact a question of a collaborative economy but of a multitude of collaborative models, with various dimensions and motivations but which are based on a community vision. and ecosystem and which capitalize on intermediation tools (platform type) facilitating the exchange and sharing of goods and services between peers.

It now seems simplistic to reduce the issue of the fairness of the distribution of value to the sole amount of the commission charged by the platforms (cf. controversy around the Uber commission). Indeed, as we have seen, for collaborative platforms as for other relational modes, the value is no longer to be considered as essentially financial but also extra-financial (cf. Uber drivers also appreciate the flexibility provided in the choice of their working hours).

Today, the novelty, complexity and speed of development of the collaborative economy represent a real challenge for legislators who tend to regulate this movement, without much success so far. It seems to us that the answers to be given to the problem of the equity of the distribution of value are rather on the side of the logic of the contract which is in the process of imposing itself on the market. As such, and even if the open source models are not new (cf. Linux), we are now witnessing the increasing use of different opening modes (cf. Creative Commons licenses or "reciprocal license enhanced” developed by Michel Bauwens and the Peer to Peer Foundation).

More than defining principles, this rather leads to identifying key points to bring out truly equitable approaches:

•     The justification of the amount of the commission charged: what are the arguments that explain the amount of the commission and are they legitimate for the different actors?

•     The bargaining power or dependence and subordination of contributors: does the platform impose decisions unilaterally and if so, how can this approach be justified?

•     The evaluation of the individual contribution when the contributors are numerous: are the contributors judged on an equal footing when their contribution can vary significantly?

•     The level of openness of the co-creation process and co-created solutions: what is the level of involvement of contributors in the creation and use of the proposed solutions?

•     The level of participation of contributors in governance: to what extent are contributors (and other stakeholders) involved in the governance of the platform?

•     Consistency in the economic model: is there consistency between the mode of involvement of contributors and that of access to the solution (cf. voluntary contribution on Wikipedia and free access)?

The subject of equity in the distribution of value therefore appears to be central today because it can call into question the license to operate of all players, regardless of the sector of activity. This problem is all the more complex to manage and integrate for organizations as it must be dealt with at the level of the company's strategy as well as at the level of its innovation processes.

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