Moves, a Toronto-based FinTech startup, has expedited the planned launch of its platform in order to offer loans to gig economy workers, such as ridesharing drivers and food couriers, during the COVID-19 pandemic.
“We hear the growing number of people working independently… are facing challenges resulting from COVID-19.”
– Matthew Spoke, CEO of Moves
The startup, which planned to launch in the Fall, is now offering $2,500 one-year loans, which are intended to be used as a “financial bridge to the post-COVID-19 economy” and support independent workers in Ontario that traditional banks and credit scores may disqualify from financial services.
Data from Statistics Canada indicates that in 2016, there were about 1.7 million workers in Canada’s gig economy. The estimated annual income of a typical gig worker was generally low, Statistics Canada found, with the median net gig income in 2016 totalling $4,300.
“We hear the growing number of people working independently for Uber, Lyft, and other app platforms are facing challenges resulting from COVID-19,” said Matthew Spoke, Moves’ CEO. “We know they work hard and face high barriers when trying to access credit from the traditional banks.”
“Moves wants to be their trusted partner to provide accessible and affordable credit to help them bridge to the post-COVID-19 economy and meet their financial goals,” Spoke added.
The $2,500 loans will not require any payments for 12 weeks, after which Moves will withdraw payments of $70 per week for 40 weeks as well as a $220 fee, for a total payback amount of $2,720. The startup said it does not rely on traditional credit checks and that loans will have no impact on credit scores.
The startup is currently accepting applications from Ontario workers that drive or deliver for DoorDash, Facedrive, Instacart, Hiride, Lyft, Skip The Dishes, Uber, Uber Eats, and Foodora. Applicants must have received income from a rideshare or food courier platform in the last 90 days to qualify for the loan, which means Foodora workers could still qualify for the loan, even though the company recently ceased operations in Canada.
Moves plans to introduce an app in the coming weeks and to expand its flexible cash borrowing solution across Canada. Moves is also planning to make a smaller loan option available. This $500 loan would be repaid either over a four-week period or a one-year period.
Image source Moves.
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Jonathan Haskel on fixing the intangible economy and restarting the future – The Hub
This episode of Hub Dialogues features host Sean Speer in conversation with British economist Jonathan Haskel about his influential new book (co-authored with Stian Westlake), Restarting the Future: How to Fix the Intangible Economy.
They discuss the differences between tangible and intangible assets, what has gone wrong with the intangible economy, and the institutional changes necessary for long-run economic growth.
Transcripts of our podcast episodes are not fully edited for grammar or spelling.
SEAN SPEER: Welcome to Hub Dialogues, I’m your host Sean Speer, editor-at-large at The Hub. I’m honoured to be joined today by Jonathan Haskel. Jonathan is a Professor of Economics at Imperial College Business School at Imperial College London, and an external member of the Monetary Policy Committee of the Bank of England. Along with his co-author Stian Westlake, his 2017 book Capitalism Without Capital: The Rise of the Intangible Economy was one of the most important on economic policy in recent years, and was rightly praised for its explanation of the growing importance of intangible assets in the modern economy.
They’ve recently co-authored a new book entitled, Restarting the Future: How to Fix the Intangible Economy. I was a huge fan of Capitalism Without Capital, and I’m grateful to speak with Jonathan about his latest book, and its key ideas and insights. Thank you so much for joining me.
JONATHAN HASKEL: Sean, thank you so much for having me on. Greetings to you and your listeners from London, England.
SEAN SPEER: Capitalism Without Capital brought mainstream expression to the idea of the intangible economy, and how it differed from our past understanding of physical assets, such as plants and machinery.
Let’s start with a scene-setting question: what are intangible assets? How do they differ from physical assets? And why have they become so increasingly important in the modern economy?
JONATHAN HASKEL: Thanks, Sean and that gets at exactly the nub of what it is we’re trying to observe here. Our observation is the economy has changed, and in the old days the economy was involved mostly in investing in and producing very tangible things; companies were investing in buildings and plants and equipment and machines and vehicles, and so on. What are they doing now? They’re investing much more in the intangible assets, which you kindly mentioned in the introduction.
So, what do I mean by that? Maybe the most immediate way is to think about the world’s leading companies. If you look at the league table of the world’s leading companies, company number two—this is in the PWAC league tables—is Saudi Aramco. That’s the Saudi state-owned oil and gas company. And their assets are assets that, you know, people who are interested in business and interested in that world would be very familiar with. They are enormous diggers, huge oil wells, vast oil tankers—everything that’s very tangible.
The other companies in that list of course are Apple, Google, Microsoft, Facebook, companies like that. And if you ask the question, how many diggers and how many oil rigs and how many oil tankers do Apple and Microsoft and Google and so forth own? The answer is they don’t own any at all. Their assets are entirely intangible. So what do we mean by that? They are things like the software would be an obvious one, the algorithm that Google owns, that tremendous knowledge that powers a lot of the search that we do. They’d also be intangible things like reputation as well; Apple’s design would be another intangible asset as well. And then one thing, which I think is rather understated, but very important, that’s the kind of the internal organization that companies have got. When Tim Cook took over from Steve Jobs, it wasn’t that Tim Cook was the main designer at Apple. He was the supply chain manager at Apple. That extraordinary knowledge which many companies have got of managing the supply chain and managing relationships within a company, we think that’s a really important intangible asset as well. So, it’s that synergy. It’s those groups of intangible assets, which we think are very symptomatic of the way that the economy has changed.
SEAN SPEER: Your new book’s subtitle suggests that something isn’t quite working in the new world of intangible capital. What is it? Why does the intangible economy need fixing?
JONATHAN HASKEL: So, what we’re worried about, Sean, is this: there’s been this trend towards intangible assets, and, as I say, people will be familiar with all the companies you know, who I just mentioned. So hopefully that kind of brings that a little bit to life. But right around the time of the turn of the century, maybe the financial crisis, there was a slowdown in the pace of intangible investment. There had been rapid intangible investment, especially over the internet age, as companies had invested in the software, changed their business processes, re-engineered what they were doing. And those companies like Google and so forth were emerging for the first time.
But around the financial crisis, as I say, there was a bit of a slowdown in that sort of pace of change. So, what we’re worried about is that at least for many countries, we need to fix our institutions to make sure that that change that we’ve seen doesn’t run into the ground. Essentially, we think that many of the institutions we’ve got are institutions which are fit for a tangible economy, and we need to reshape them to make them fit for the intangible economy.
SEAN SPEER: As you say, Jonathan, the book focuses on institutions, and we’ll come to that point. But let me ask you about the world of ideas. How much of the problem is intellectual? That is to say, so much of the intellectual underpinnings of economic policymaking were conceived in an era in which physical assets were so important.
Is there something of an incompatibility, or at least an incompleteness, between, say, the Washington Consensus and the intangible economy?
JONATHAN HASKEL: I think that’s a very nice way of putting it, Sean. I’ll say a couple of things. The first thing is, going back to the companies, is that of course company accounts are pretty uninformative when it comes to intangible assets. If you look up the company accounts of Saudi Aramco, it’s a pretty good enumeration of all the assets upon which that company is based. The company accounts of Apple and Microsoft have got their tangible assets; they’ve got some buildings, they’ve got a few computers, but they don’t really know how to count the value of those relationships, those supply chain relationships, and skills that they’ve built, and so forth. So that’s one aspect, which leaves policymakers kind of working in the dark. So, especially when it comes, for example, to competition policy, policymakers look at competition policy through a tangible lens and maybe I think in some ways aren’t quite seeing that. So that’s one aspect of it.
I think the other aspect of it is we think that the intangible economy has got quite different properties to the tangible economy. And if I may, Sean, let me just mention a couple. One is, if you think about I don’t know, Uber’s algorithm, the sort of brilliant computer program that matches you with a potential driver, that’s an algorithm which can be rolled out. I’m sitting here in London, before the pandemic when we all used to fly around a little bit, I could fly to San Francisco and go—in fact, we went to Uber in an Uber, we were absolutely delighted about all of that—and that same software that got us to the airport in London got us from the San Francisco airport to the Uber office there. So, one of the features of intangible assets is you can scale them up in a way that you can’t with tangible assets. If you’re a taxi company and you want to take some more people, you’ve got to order some more taxis. Whereas if you’ve got the software, you can scale that software across other places. That’s one aspect of the intangible economy which we think is different.
The other aspect which we think is different, of a similar essence, is around synergies. Namely, if you put these intangible assets together, you get something which is much more than the sum of the parts. And if you’ll forgive a very British example, Sean, but this was something hopefully the Canadian listeners will be super interested in and be familiar with. It is, of course, Britain’s greatest innovation, the one invention from Britain that everybody in the world knows about. And that, of course, is Harry Potter. If you think about what Harry Potter is, it’s an extraordinary bundle of, yup, intangible assets.
So, the book itself is an intangible asset, all the ideas enumerated on the page, put that together with these amazing software writers, another intangible asset, and then you have the movie with all the sort of special effects. Put that together with some designers for the theater, and then you’ve got the theatrical production, which is running all over the world. So again, if you add together all of those different intangible assets, the synergies between them get you something more than the sum of the parts.
So, to your Washington Consensus point, an economy with a lot of scaling up and a lot of synergies is going to behave quite differently to a tangible economy. We’re gonna get some pretty big companies, right? Like the Ubers and like the Microsoft, so we’re scaling up. We’re gonna get some very successful individuals like the people who own Harry Potter and the intellectual property rights and all that kind of thing, they’re going to become very wealthy, they’re going to earn very large returns. I think, looking through—understanding things like the scaling up of big firms, understanding things like some of the aspects of the concentration of wealth—looking through that with a sort of intangible lens, helps you think about some of the developments in our economy, which maybe if you didn’t have that intangible lens you would think about it in a different way.
SEAN SPEER: That’s terrific, Jonathan, let me pick up some of the threads in your answer. There’s a tendency to think and talk about the economy, at least in Canada, in a bifurcated way. We have traditional sectors, and we have high-tech ones.
First of all, is that a useful way to describe the economy in a world of intangible assets? And second, how can we further extend the productivity-enhancing benefits of the intangible economy to traditional sectors such as manufacturing, resource development, and agriculture?
JONATHAN HASKEL: Yeah, Sean, great question. And if I can just tell a little anecdote. Part of the reason I got into all of this is there was an initiative in the U.K., a public sector initiative about 15 years ago, to concentrate on creative industries. And we feel in the U.K. that we’re very good at creative industries, right? The Beatles and Monty Python and Harry Potter and all those things which Britain somehow feels we’re rather good at—we’re maybe less good at manufacturing, and soccer, and stuff like that, but we feel very good about that. I remember going to a meeting about the creative industries and they had a very long list at this meeting of the various industries.
Sean, you’ve just mentioned a few of the manufacturing services and all that kind of thing. We went through the list trying to figure out which was a creative industry and which wasn’t a creative industry. When we got, for example, to the automobile industry, that was decided that wasn’t a creative industry but the software industry was a creative industry. I remember the representative from the automobile industry said, “Wait a moment, we’re very creative in the automobile industry. We’re designing new cars, and we’re engineering new engines to use less fuel and go electric, and all those things.” I remember the atmosphere in the room, Sean, they were really genuinely offended that they were not labeled as a creative industry.
So, to your question, if you label these industries in a very sort of conventional kind of way, agriculture services, the financial services, and this that and the other, you’re gonna fall into this trap of deciding that some are creative and some are not. What’s much, much better, much more helpful, is to go inside the industries and ask what activities are taking place in those industries. So, in software, there’s loads of creative stuff going on in software as people are writing computer games and all that kind of thing. In automobiles, there’s loads of creative stuff going on in automobiles, because they’re writing a lot of software, actually. There’s so much software in automobiles now. But they’re doing R&D and they’re trying to develop new ways to have electric cars and all that sort of thing. So, I think the focus on the intangible activities in the industry is much more helpful in thinking about these different industries.
Where that takes me, Sean, I think, is that to talk, if you’ll forgive me, about traditional industries and non-traditional industries is to make a bit of a mistake actually. Because if you start looking at the activities, what you find is “the traditional industries”, well guess what, there’s loads of intangible activity going on there as well. Now, it’s true that in the—going back to what I was talking about—in the creative industries, possibly the less traditional industries, media, software, those kinds of things, there’s more creative activity as a proportion because that’s what people are doing. But the sort of bifurcation between the creative, non-creative, the traditional, non-traditional, thinking about intangibles, think of any tangible activities, kind of helps you think through all of that. So, that’s one thought on essentially trying to scrap this dreadful issue about the traditional and the non-traditional and so forth.
I think the other thing which you mentioned was rolling out the productivity benefits to the other industries. And that, in some sense, is why we’re worried about the wrong institutions that I was mentioning earlier on. If, for example, we’ve got a financial system which isn’t very good at lending against intangible assets, or if we’ve got a sort of government science policy system which isn’t flexible enough to help firms who are trying to develop things besides traditional R&D—they’re doing software and design and all that kind thing—if we’ve got those somewhat inflexible systems, then we’re not going to help the “traditional industries” expand as they now want to do into intangibles. That’s why as I say, we think we need a little bit of reform.
SEAN SPEER: In your observations about creativity and the role of creativity, it had me thinking about the issue of intellectual property which looms large in both your books. Why is IP so important in a world of intangible assets? And if you’ll forgive me, can you describe perhaps the broad contours of what an optimal IP policy framework might look like for the intangible economy?
JONATHAN HASKEL: IP is going to be incredibly important because of course when people invest in a more intangible activity, it’s much more likely that their IP can be used by others. So going back to Saudi Aramco, when they invest in an oil tanker, unless somebody hijacks the oil tanker it’s their oil tanker. On the other hand, if you think about Apple, the incredible designs that Apple do, within about 18 months of the issue of the iPhone basically every phone looked like the iPhone. So that was an example where the IP is going to be very important.
The trouble with IP is we need to reach a sweet spot between a sort of ghastly trade-off, really. If we say, “All right, there’s going to be no IP protection at all,” then people, as I say, like these designers, are going to be very reluctant to spend a lot of money on the design because everybody can copy the design. If on the other hand we say we’re gonna have a lot of protection on the IP, then you get yourself into another set of difficulties. There might be an incentive to invest a lot in design. But then potentially there’s lots of wasteful activity. Lots of lawyers start getting involved in defending patents and all of that. That’s one aspect of it. And the other aspect of it, whilst we’re on the sort of mobile phone analogy, is that many mobile phones, of course, require hundreds and hundreds and hundreds of patents to get them working. So, what you need is you need to combine all of those patents.
Now, there are lots and lots of rights holders. If we make IP protection incredibly tight, it’s just going to be really difficult to marshal the hundreds and hundreds of rights holders that way, and then the economy is just going to be completely held up. So, the IP is more important and it’s finding the sweet spot there which we think is a real big challenge. I think where we come to be a little bit more concrete, where we come down to is, we feel that increasingly a lot of intangible companies are using these IP rights in conjunction with each other—that’s back to the synergies thing that I was talking about earlier on. So, therefore, we feel that tightening IP is not going to help us because that’s going to take us on the wrong side. All that will happen is we’ll just be involved in endless legal arguments as to whether I’m allowed to use your IP and Sean’s allowed to use my IP and all that kind of thing. So, we feel, if anything, we want to go slightly looser on the IP side, so that we’re not mired in all of those difficulties.
SEAN SPEER: It’s a great example, Jonathan, of how the rise of the intangible economy is going to require some adjustments in conventional thinking about economic policymaking and the incentives inherent in an IP model.
Another issue that you’ve raised in the book is that the rise of income inequality has broadly correlated with the rise of intangible assets. Is there something inherent to the intangible economy, including, for instance, its winner-take-all quality, that makes it more prone to unequal distribution? And if so, Jonathan, what can policymakers do about that?
JONATHAN HASKEL: I think it is exactly that. In a sense, it goes back to the JK Rowling example I was having earlier on. If you ask the question, why is JK Rowling so wealthy? Why is Bill Gates so wealthy? It’s not like the Rockefellers and the Vanderbilts and so on from the old days. It’s not that they own a lot of oil wells, or they own a lot of coal mines, or they own a lot of steelworks, or they own a lot of railroads. They own these very valuable intangible assets. And again, if you combine them together, you scale them all over the world, you can potentially become very wealthy. So indeed, it is precisely a winner-take-all-style economy. I think one understands it by explaining about the growth of these intangible assets and the way that they can be combined together.
That then raises this tricky issue, as you say, about what does policy do? Do we just say “Well, hats off to them, they had a series of really good ideas, and good for them, this is terrific?” in the same way that Hollywood movie stars look great and they’re blessed by God with good looks and the ability to act and all that kind of thing. Do we say good for them that they can do that? I think that’s quite difficult actually. I think the one thing is, it changes one’s mind, to a certain extent, when one looks at the income inequality. I’m not going to defend income inequality; very few economists do.
But going back to your Washington consensus view, I think in the old days people looked at, as I say, the Rockefellers and the Vanderbilts and all that and felt that they were just doing something deeply wrong, abusing their monopoly position—that is some sort of entrenched monopoly and market dominance that was going against the interests of consumers. I think in the intangible world, it’s much harder to say that actually. There may be some abusive monopoly position going on. But given the properties of the types of assets upon which this wealth is now founded, that becomes a much more nuanced question, actually. So, I think what we’re calling for in the book is a sort of more nuanced approach to the inequalities that we see in modern societies.
SEAN SPEER: Jonathan, let me ask a related question. Canada, Britain, and other advanced economies have experienced job polarization over the last quarter-century or so whereby the relative share of mid-skilled jobs has declined.
What are the labour market consequences of an economy of thoughts rather than an economy of things? Is there a risk that it further erodes the middle class in our societies?
JONATHAN HASKEL: Yeah, so I think it’s helpful to think about jobs in the following way. Everybody both here and in Canada and in North America in general worries about good quality jobs. But I think we think that the job is the wrong unit of analysis. Actually, jobs are a whole bundle of different tasks. So, some jobs, like for example being an economist, involve the task of thinking hard. Which, frankly, is not all that difficult relative to really difficult jobs, which are waiting on tables, being nice to aggressive customers, cleaning up the mess from not nice people who come into your restaurant, and all that kind of thing. That’s a job which requires a lot of quite difficult tasks, and lots of people management, and so forth. We haven’t yet managed to find a machine which is going to wait on tables and be nice to people and all that kind of thing. We still need people to do that. What we have done is we’ve managed to find machines which will do very routine types of tasks. So, the massive displacement of essentially routine factory workers from the factory is an element of all of that.
So where do intangibles come in? Well, again, I think thinking about the synergies is quite helpful here. We’re probably going to be able to develop machines, especially in an era of artificial intelligence, who can think their way through a number of tasks and help us shuffle around items on a spreadsheet and all that kind of thing. All of that stuff can probably be automated, but putting together different thoughts, in other words, the combination of tasks, that may be too difficult for machines, right? So, coming up with smart ideas to serve customers better, coming up with ideas that will manage the supply chain, that will inspire employees within an organization and all of that, that we can’t do with machines it seems to me.
In fact if anything, the machines that we do have, like computers and so forth, are going to help us do that because we’ve got access to more information, we’ve got the access to how other people do it, and so on. I think we think that this is going to be a difficult adjustment as all these labour market adjustments are. But in many ways, the machines taking over the routine labour, especially for developed countries, that’s more or less done. So, we’ve got to think about the next stage of getting people, as I say, to be able to use the machines in a way that helps them combine these ideas in a good way.
SEAN SPEER: Looking to the future, the book makes the case that higher rates of growth aren’t just good for the economy, but that they can contribute to a positive-sum politics and greater social cohesion. Let me ask you a two-part question, Jonathan.
First, what’s the key insight here? What’s the link between growth and a healthier political culture? And second, do you ultimately think that we can aspire to getting beyond one and a half percent or two percent growth? Or is there something deeper and more structural holding us back?
JONATHAN HASKEL: I think the growth and culture question is a really interesting question which we sort of feel in our bones somehow that a stagnant economy is a zero-sum economy essentially, right? A stagnant economy is going to be that if I manage to get a subsidy for my university, unfortunately, you’re going to get less money for your hospital, and vice versa. I think when it comes to public spending, for example, which is a lot of the arguments that we make about how to divide up the cake, a stagnant economy gives it that zero-sum element and makes that very, very difficult. And from that, I think lots of very difficult issues follow: nationalism and all those kinds of uncomfortable and non-growth enhancing cultural issues around there. That’s one set of thoughts.
A second set of thoughts on the beyond one and a half or two percent growth: we think that one of the things that intangibles do, is, as I was mentioning earlier on, I come up with a good design, and everybody else copies it, that makes money for Apple, it makes money for everybody else, actually, as well, as it turns out. So, if we can generate more of these intangible ideas, and more of them can diffuse through the economy, then we’ve got a chance of breaking out of this very low growth at the moment. So, part of what we’re saying, Sean, in the book is because the transition to the intangible economy has been held up, we’ve got say the wrong institutions, especially for example around financing, then growth is going to be held up because we’re not going to get the full benefits of growth that the intangible economy can bring.
SEAN SPEER: Let me just wrap up with a final question. You’ve been so generous with your time. Do you want to just elaborate, Jonathan, on some of the institutional changes that you think are necessary to achieve that boost in long-run economic growth for Canada, Britain, and other advanced economies?
JONATHAN HASKEL: I’ll mention a couple, Sean, if I may. One is around science policy. Very difficult issue, certainly in the U.K. What do you do about funding universities, funding research, and so on? Do you fund very broadly on big moonshot programs and hope that good things will happen? Or do you find more nimbly, and try to get those synergies going in a way which needs a little bit of flexibility, and so forth, which bureaucracies maybe aren’t so good at?
We think we need a little bit more on the nimble side. We think that science funding—and forgive me, this is a comment about the U.K., I should know more about Canada—science funding in the U.K. is a little bit regimented. There are lots of metrics and forms you’ve got to fill out and all that kind of thing. And therefore, the chance of achieving those synergies of, as I say, bumping into a theatrical designer, or bumping into a scriptwriter who’s going to use your software and all that kind of thing, is less. So that’s one set of issues.
The other set of issues, and I’ll just mention these, is around financing, which was mentioned a little bit earlier on. One of the difficulties in the intangible economy is that if I go to a bank with a building or with a vehicle, I can often secure a loan against that. If I go to a bank with a movie script, or an idea for a marketing campaign, or a design, banks aren’t going to lend me against any of that. So, we think we need some reforms in the financial system to make it easier for firms to go to the financial sector and raise the money that they need to start up the intangible businesses who are going to be the next Google, the next Apple, the next Facebook, and take all of those products to a new level.
SEAN SPEER: For policymakers thinking about navigating this new world, they’d be wise to read Restarting the Future: How to Fix the Intangible Economy. Jonathan Haskel, thank you so much for taking the time to speak with us today at Hub Dialogues.
JONATHAN HASKEL: Absolute pleasure Sean, thank you.
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