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19 May 2008updated 22 Oct 2020 3:55pm

The upside of the downturn

Chris Adams believes that economic jitters could provide a catalyst for social innovation

By Chris Adams

When you’re writing about social innovation and the web, and you work with the web daily, it’s very easy to get overexcited about the fact that there is now a regular stream of people who want to talk to you and work with you on Idealistic Worthy Projects That Will Save The World. And sometimes, you even get paid for them.

Outside the online echo-chamber though, things look less upbeat. Many of the pessimistic economic predictions for 2008 are coming true; house prices seem shaky, food prices are soaring and banks are announcing huge losses from global credit crunch. When belts tighten, discretionary spending is one of the first things to go, which is likely to make charities and social enterprises nervous.

But in the wider context, the last large economic downturn turned out to be pretty good for providing tools for social innovation. It was during the fallout from the dotcom boom that the tools of Web 2.0 were developed, and with relatively few resources available, they had to be built on cheap, commodity hardware, instead of the exotic, expensive servers that powered the rising stars of the boom times. This trend towards commodity hardware has taken us to the point where the hardware costs for powering your website are essentially zero – you can now use Google’s own infrastructure to power your website, at no cost, until your project is big enough to prove there’s a need it’s serving, and have a much stronger case for funding.

Also, downturns can lead to help from unexpected corners. This is the first year that Channel 4 has posted an operating loss since 1992, and its annual report describes a new direction for the organisation, moving away from being primarily a public service broadcaster supported by TV advertising, to a provider of digital public services, where it would be partly funded by the public, in a similar manner to the BBC.

As part of this renewed public service focus, Channel Four will be launching 4IP, a £50m creative fund later in July, to provide funding and support for just the kind of wonkish, clever projects that this blog covers, at the 2gether Festival; which is aimed primarily at bringing together social entrepreneurs, inventors, developers and designers in a similar fashion to social innovation camp, and seeing what happens.

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Of course, there’s more than just altruism at work here – It doesn’t take a genius to work out that a nice, predictable, steady flow of public funding seems more attractive than relying on advertising revenue, especially when ad budgets are one of the first things companies cut back on during a recession, but at this early stage, it looks like the coming economic downturn may end up providing would-be online social entrepreneurs with a very welcome source of new funding and support in the form of Channel 4.

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The 2together Festival is taking place on 2 and 3 July, at the Rochelle School in East London. Annoyingly, there’s no place online to sign up yet to find out more, but Social Reporter is probably your best bet for future Channel 4/2together related news.