I’d really like peoples help in starting this project. Its an experiment in open sourcing and whether it will work practically, as it is the Farmhack. If you can help get in touch, spread the word. I have the seed, the land, the time, the expertise to make this happen….. what I don’t have is collective intelligence to make this something better than I could ever envisage.
What forms can a bakery business take? Taking inspiration from panarchy, co-ops and the digital age:
We are currently in the middle of a paradigm shift that is simultaneously in decent and ascent, where old finance and business is on its way down and where new mass commons of the Internet is on its way up (Perez, 2010, Murray 2010). This period is personified by the conceptual framework of panarchy, a framework to account for the dual, and seemingly contradictory characteristics of all complex systems – stability and change (sustianablescale.org). Maybe the linear patterns we see in late modern western capitalism is the upward exploitation part of the cycle – see figure 1. If this is the case, we will experience revolt or mass institutional change that will see the cycle return to its natural pattern – see figure 2. In order to work our way out of this shifting paradigm (Perez, 2010) this paper argues that we need to combine the theory of panarchy with the mass commons of the Internet and use models of co-ops, both traditional, such as Emilia Romagna and Mondragon, and new, such as Wikipedia and Github.
There is no doubt that it will take some radical thinking in the UK to assist in the ascent of agriculture from its below 1% workforce, to move it away from the mass use of synthetic and man made products and to release some of the externality pressures that farmers currently face.
I assumed, before embarking on this project (of which this paper forms part of) that the framework for this bakery would be traditional, hierarchical, centralised and economically driven. However, after researching the specific subject of collaborative business models, this paper now seeks alternative thinking to the construct of a traditional bakery. The models that this paper takes inspiration from are; panarchy – as a model of incline and decline, Carlota Perez – and paradigm shifts, co-ops – as a model of togetherness, commons – as a model of joint ownership and finally, open source – as a model of construction and the basis of the platform for the bakery.
There are essential elements within the business that need to be well constructed whatever the model type:
- Your brand, or ‘awareness’ as Murray (2014) refers to it
- Your product – this is central to the success of the business, linking in very closely with the brand and is imbued by everything within the business – ethos, production and distribution
- The business mode – we will not debate the finances, but rather the model of construct.
Panarchy – as a model that guides every system
Panarchy is a conceptual framework to account for the dual, and seemingly contradictory, characteristics of all complex systems – stability and change, see figure 1. It is the study of how economic growth and human development depend on ecosystems and institutions, and how they interact. It is an integrative framework, bringing together ecological, economic and social models of change and stability to account for the complex interactions amongst both these different areas, and different scale levels.
Figure 1. Sustainable scale. Stages of the Adaptive Cycle: Basic Ecosystem Dynamics, 2014.
Figure 2. Sustainable scale. The interconnectedness of levels, 2014.
The fast levels invent and experiment – see figure 2, whilst the slower levels build on the tried and tested and build stability, but can be overwhelmed by faster more creative cycles. The framework feels like something the business should work within at every stage, but is the timing appropriate and will society be ready for it?
It might be said that the world has so far survived due to the resilience of its natural ecosystems and their ability to experience wide scale change and still maintain their integrity. Extreme transformations have been a part of human evolution too. It is people’s ability to adapt that has made it possible for them to persist. We need to ask; is it possible for this behavior to be imbued into a business using the co-op as a model and open source as a mode of transition?
Perez: techno-economical and socio-institutional paradigm shifts and how they influence business decisions for the bakery
Perez (2010) explains that we are in a period of mass technological change that has historical precedent in the textiles, steel and mass production industries, but this time the industry is all around us, at our finger tips, in our pockets and bags, permeating through our bodies. This renaissance is known as the Internet.
Perez (2010) defines the period we are currently in as one of transition between two distinct technological styles‚ or techno-economic paradigms, and as a period of construction of a new mode of growth. This ‘second collapse’ period we are currently in is unprecedented. All other technological transformation has had a single collapse. A mass hysterical rush for money usually precedes the collapse, the finance markets are left to run themselves and the institutional bodies make themselves scarce (Perez, 2010), which is exactly what happened this time around. After the ‘crash’ typically, the institutional bodies rush back in proclaiming to know what to do and this period is when finance and production are recoupled, but not this time round. During this recoupling, finance powers design, research and innovation, which form the vanguard of the new period. This is when the foundations for the next fifty to sixty years of development are laid (Perez, 2010). We are currently in the second crash – the first was in 2000 when the ‘dotcom bubble’ burst – representing a paradigm in transformation. The finance industry, rather than recouple, has recoiled into its institutional club and refused to behave respectfully to consumers and small business alike. Until they start to recouple and connect with SME’s and invest in people rather than the institutions, the change will falter, as Perez (2010) has documented. It took 10 years and a world war to pull humanity out of the last global collapse, what will occur this time?
According to Perez (2010) the social conditions are aligned with this papers ideas on conceptual frameworks, but taking her view further, we cannot rely on institutions to help build this, we must turn to the community and to the internet for ideas, support, funding, human resource and more, as will be discussed later.
This section looks at co-ops and how they can offer inspiration for the bakery.
Emilia Romagna is one of the world’s leading entrepreneurial regions where 2.25% of the population is employed or runs a co-op, compared to New York where the equivalent is 0.16% (Restakis, 2007) serves as guiding principles for our venture.
Emilia Romagna sets out the following guiding principles that I believe serve as regulatory framework, alongside the panachy conceptual outline, for our bakery.
- Clustering -work together in every way possible by both type and locality.
- Structure(organizational, developmental, financial) – creating developmental and financing structures. Improve access to on-going financing, planning, and communication
- Solidarity – developing both a formal and informal infrastructure of support for achieving the goals of existing and new cooperatives, based upon solidarity
- Reciprocity – this terminology focuses on the reciprocity relationship between cooperatives and between the members of cooperatives.
(Adapted from Thompson, 2003)
Mondragon employs 80k people within 28k companies across northern Spain. Its ethos is based on all co-ops being supportive of each other – see figure 3 – and of the individuals in those companies. The finance structure is of interest to note, wages are 9:1 entry level to manager or director and capital is provided at two levels. The initial sum of funding is provided to enable the formation of the business plan whilst the second proportion of funding is for starting the business.
The business is also structured around other services, not just finance – see figure 3 – they are business development and sales, education and training and research and development. These areas stand as specialist hubs that service all the Mondragon co-op. I would add in to this central hub, communications and IT. The Arizmendi bakery and farmhack examples later in this paper have mixes of these functions at their core.
Figure 3. Mondragon co-op model
Co-op UK – Robin Murray
Robin Murray is a leading figure in UK business and constructed the fair trade industry, giving birth to Café Direct and Divine Chocolate. He recently wrote a report on the state of co-ops in the UK. Below are the parts that are poignant for this paper.
There are new ways of modeling businesses that differ from the traditional pillars of the 20th Century economy. Under the weight of technological change the old pillars creek and are trying, in vain, to integrate and remodel.
Murray (2010) refers to this as the second industrial divide. Information and its exchange have transformed the way business is conducted and moved the consumer to a more principal role. This has coincided with the return of the micro. Early industrialisation centers on small firms and homeworkers – great news for the co-op, for they have always flourished best in decentralized economies, Murray (2010).
The Internet as an embodiment of the co-op, the commons, and panarchy.
Commons include openness and feedback, shared decision making, diversity of perspectives, social equity among members of the commons, environmental sustainability, and community vitality (Bollier, 2001). There has never been a commons as big, robust and socially creative as the Internet. Since its emergence as a popular communications medium in the mid-1990s, the Internet has unleashed a remarkable explosion of knowledge, commerce and virtual community on a global scale. Much of this growth has stemmed from the astonishing commercial development of the Internet platform since 1994, particularly since the rise of the World Wide Web, Bollier, D, (2001).
The diversification and togetherness of the Internet has built its resilience and power, epitomised by the phenomenal growth of free open source software, particularly in the past five years. IBM and millions of other such companies have embraced the GNU/Linux operating system that has flourished in the hands of git and github. Businesses have had to recognise that their mode of work is outdated and that flexible, decentralised management practices made possible by an open Internet are the new modes. Closing it off, taking it out of the commons is no longer possible. Professor Lawrence Lessig warns that enclosing the information commons would change the character of our society, Bollier, D, (2001).
The Internet is clearly the best place to share an idea and to solicit participation and build something unique, but how do we ground this in reality?
One of the early celebrated cases of the power of Internet as commons was that of Goldcorp, a Canadian gold mining company. It was a faltering $100m company that was running out of its existing mineral reserves. A new chief executive who had heard about the innovations in the informational economy placed all its geological data on the web and invited ideas about potential new sources of gold. 50% of the ideas submitted were of places overlooked by the company geologists. 80% of them yielded significant quantities of gold. Goldcorp quickly grew into a $9 billion major. Though this is a commercial example the distributed principle is the same. There are two sites that jump out as being the blue print for this new commons cooperative approach, Wikipedia, which we all know about and github.
What is github?
Github is a 6.5m user site founded on the commons ethos. Github is a web-based platform for developers built by developers and open to anyone. At the heart of Github is git, an open source project started by Linux creator Linus Torvalds.
How does github work and what does it do?
Github works for developers and companies looking for coders to work on their code and as a place to acquire profile insight on coders. Coding as an industry lives on github, it’s a way of building your profile, acquiring work and obtaining praise.
As a platform it has three actions that make it unique, successful and appreciated. They are fork, pull, request and merge. The flagship functionality of Github is “forking” – copying a repository from one user’s account to another. This enables the user to access and modify a project that would not otherwise allow changes to be made access to and modify it under your own account. If changes are made that then need to be shared, a notification called a “pull request” can then be sent to the original owner. That user can then, at the click of a button, merge the changes found in the new version with the original.
The penultimate part of this paper gives examples of baking businesses that maybe of influence and guidance to the form of this business.
Co-op bakeries, sources of inspiration.
The Handmade Bakery:
The Handmade Bakery (based in West Yorkshire) pioneered the idea of the Community Supported Bakery. The support of local people committing to a regular HMB loaf on subscription was integral to the establishment of the business.
CSBs are similar to other community supported groups where the lines between the producer (baker) and the consumer are blurred, where there is an economic commitment on behalf of the consumer that helps the business move forward with production and distribution. The process starts with your idea and the promotion of your idea with sound business model, great products and strong brand.
Andrew Whitely bread matters:
Since 1975 Andrew has been making bread and running bread businesses. He is a skilled bread maker and is passionate about the nutritional value of bread and the vital connection it has to people and to the land. His latest campaign is focused on feeding people from their locality, growing grain and making the bread within the area of a village. Something this business, if not this paper, is also very passionate about. The question of bread ‘terrior’ is an intriguing one, which a few people across the globe are researching, according to the bread lab.
Andrew’s business was originally set up in the traditional hierarchical sense of miller to bakers to consumer however it has now developed into a much more complex entity and acts almost as an incubator for other potential bakeries, bakers and growers whose ethos is akin to his own. Andrew’s latest campaign is known as ‘Scotland the bread.’ Also worthy of note is Andrew’s ongoing campaign, known as The real bread campaign – a major long running campaign to encourage people to eat ‘real’ bread – bread without additives and bread that is baked slowly. Innovative ideas and promotions aimed at the general public run jointly by Andrew and the charity, Sustain.
All of Andrew’s ideas are underpinned with a sound product, sound science, a good brand and effective PR slant and practical solutions.
The Arizmendi Association of Cooperatives is a network, incubator, and technical assistance provider that is owned, governed and is funded by the member workplaces it creates and serves. Their primary activity is to replicate and offer continuing support to new retail bakeries based on a proven cooperative business model (Arizemendi coop, 2014)
When the Association is ready to develop a new bakery cooperative, they find a new site, draw new capitalization loans, recruit new worker-owners and face the risks that any new enterprise faces. However, these risks are reduced by what is not new – the enterprise adapts the same business plan that existing member bakeries have used, it offers a tested product line using the same recipes, it has a similar name and co-advertises to nearby markets, it uses proven governance structures, and it shares the cost of support services with other members. Development funding for the Association comes from member workplaces who contribute a percentage of their net income as membership fees.
The final part of this paper is a very brief overview of a living, breathing example of the type of solution I have talked about.
Farmhack is an exciting and pioneering business that is the closet example (maybe the only example) of the framework this report is debating – http://farmhack.net/home/ – an agricultural community framework built on open source software and developed through hacking days, an idea borrowed from the developer community. Success for farmhack is built on developing tools that meet the needs of its users. Every tool built is documented in detail and open sourced, leading to community development and adaptation. This is a practical example of the revolt stage that is part of panarchy theory, and represents the paradigm shift, from mass production to mass communication Perez (2010) talks of. Its ethos is mutual aid, appropriate technology and regional manufacturing reminiscent of the Emilia Romagna principles set out earlier. The Farmhack idea deserves more research time, as it feels like it has potential to influence the bakery model.
The bakery framework is a combination of new ‘open sourced’ technology, with co-op principles and diffusion through communities aided by technology. On this framework the bakery looks like the following:
- Variation of Co-ops and businesses within these co-ops – to build resilience
- Variety of size among the businesses – to enable fast and slow variations and interactions
- Overarching platforms that facilitate togetherness IT, awareness, research & design and finance,
(see figure 4 below)
The bakery form, with all its complementary elements showing their interactions and life cycles.
Figure 4. A chart showing the whole bakery and all its externalities. The square box is the bakery, that is the sum of the constantly evolving and interacting parts – farming, processing, retailing, and consuming – which all move around in their groups and within the bakery structure. All these parts have panarchy model built into them – see figure 1. Open source IT is a platform that supports all the parts, it too is evolving and dissolving over time, some projects will do this slowly others quickly. Awareness – communication, packaging and so on – is a two-way open discussion with clients and consumers. Finance wraps it all and completes the business, always changing, always evolving.
Perez (2010) is adamant that the new paradigm is “green technology underpinned by global ICT enabled infrastructure. Globalisation is about differentiating the whole globe. Making everything unique in some way”. This supports the ‘open source’ proposal which is supported up Ostrum (2002) views, openness is essential in the commons as it facilities togetherness and avoids the ‘defect’ strategy that sees both or all parties losing out. Going further and ‘open sourcing’ all your platforms and departments is an exciting proposition, in this generation of self-expressionists, authors, and innovators, it maybe the key to the success of the bakery. The framework is mass opinion and the flow of ideas around a small core strategy set out below.
Strategy for core framework to be built around:
- To make every detail of growing the grain good for Gaia
- To make bread that is good for humans
- To enthuse everybody in the business most of the time
- To dissolve disillusionment within the business
- To co-operate with others with similar ethos
- To reciprocate and to give back more than taken
- To make something that emerges and diverges as a constant behavior, that builds resilience, creates innovation and empowers people.
There is a predisposition of the South Hams area – Totnes, Dartington and Sharpham in particular – for community and togetherness. If the council and NGO’s can work together to make conditions favourable, with rents, rates, access, parking and so on, then this area, and the bakery co-op, might just flourish.
It is clear that what this paper has researched is something quite new. A new framework influenced by nature and in a time when paradigms are shifting and people are coming together to create places of work that are enjoyable, enlivening and co-operative. Baking needs to return to being strongly connected to the land and to our farmers. With an open sourced framework this most basic of tasks, feeding ourselves, is given to the whole world to influence and develop. What emerges will be exciting, resilient, and transformative.