Wayra, the Telefónica-backed accelerator, announced last month the launch of its Fair By Design fund. With an aim of raising £20 million, it will support seven startups each year to develop ways to tackle the poverty premium. Chiefly, these will be solutions to prevent low-income households paying more for services like energy, insurance, borrowing, transport and food.
The poverty premium is not a new concept. However, the sheer resilience of the challenge in the face of a number of well-intentioned public policies makes it all the more urgent. A 2016 report by the University of Bristol revealed that the poverty premium paid by low-income families is, on average, £490 per year. According to Joseph Rowntree Foundation research, one-fifth of the UK’s population is living in poverty.
So – can tech be used to solve intractable social problems like this? Clearly, the challenge requires political attention and regulation as much as any other component. However, there can be no doubt: in the 2020s, technology and innovation will have to form part of the solution.
There are three reasons. First, many of these problems are exacerbated by technology itself. While greater connectivity has enabled money-saving innovations like price-comparison websites, it has also bolstered the reach and ease of payday lenders.
Second is the creativity such a fund allows. Unlike the rigorous political magnifying glass of Westminster – where politicians quite rightly want to know policies will work at scale – Fair By Design creates a fertile space for experimentation which others can build on.
Third, initiatives like this actually create solutions that can be deployed instantly. This is a sustainable way to act against social problems, no matter which party is in government or which policy is being pursued.
Not-for-profit and public sector focused accelerators are a welcome innovation. We should do all we can to support them.
How far should we turn to tech in times of disaster?
The contributor is a Labour Party member
- ‘The Poverty Premium,’ University of Bristol, 2016
- ‘Monitoring poverty and social exclusion 2016,’ Adam Tinson, Carla Ayrton, Karen Barker, Theo Barry Born, Hannah Aldridge, Peter Kenway, Joseph Rowntree Foundation, 7th December 2016