Operators' Funding Obligations
Amazon built the "everything store" for sale of barcoded items. A comprehensive system of online marketplaces across a region's economy does the same for the more complex world of services, labor, finance and content, as well as goods which can be rented or sold. It will cost billions, but expenditure could be phased.
1) Building a Budget
A consortium planning a bid to launch POEMs for any jurisdiction and obligated to fund the project if they won, will need to scope costs for (a) technology (b) interfacing into that territory's economy (c) activity to kickstart market activity.
We call a system of exchanges aiming to boost regional growth and initiated by official concession POEMs (Public Official E-Markets). Assuming the consortium winning a concession must fund the whole project, a high-level, budget line items will include:
Financing will be subject to a risk premium, which could be especially expensive if there is a completion bond payable by concession winners, to be forfeited in case of project failure.
2) Phasing of Costs
A concession could be structured to allow incremental investment by operators.
Operators may be explicitly permitted to focus on the deepest or most economically impactful market sectors at first. Further spending is then predicated on success. For example, the sole focus at launch could be the hours of a broad category of "service delivery workers" (janitors, wardens, landscapers, contact agents, home care aides, and so on).
Government is a huge buyer in this market; the workforce is used to interacting with digital platforms. Transferring activity out of proprietary employee scheduling tools to POEMs will be relatively easy. Additional hours when any of those people might want more work can then spillover into starting adjoining markets for the private sector.
Benchmarks which trigger further rounds of investment in POEMs' infrastructure might be based on (a) total market turnover (b) percentage of GDP going through POEMs (c) numbers of users (d) operators' income from their percentage of each transaction.
3) Non-costs
Managers with experience of launching vertical market platforms may anticipate other costs from which POEMs is largely exempt.
Backed by official facilities, and bound to neutral market operations, POEMs' operators should not expect to finance:
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Market subsidies: Vertical markets biggest line item can be artificially cheapening prices to attract buyers from existing channels. Public spending provides the catalytic demand for POEMs.
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Customer service: POEMs is forbidden to treat any one user favorably except through an objective, transparent, formula ("the 5 cheapest options for your need"). That means it can't publish subjective rankings, which can attract labor-intensive challenges. Nor can it assist a big seller in a way that it doesn't for their smaller competitors.
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Front-end operations: Even without subsidies or customer service staff, a new marketplace needs liaison with putative buyers and sellers. That could include research into user needs, representation at trade events and feedback to users, perhaps through newsletters. POEMs' federalized structure, pushes this responsibility and the associated costs to franchisees.
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AI: POEMs is compelled to be transparent in its code, processes and intentions. That makes potentially impenetrable AI a problem. It also largely lacks benefits; POEMs' markets have like-for-like structures, procedures and open data. There is little of the complexity found in vertical markets. External apps can of course offer any kind of AI-enhanced interaction to POEMs' users.
4) Scoping the Costs
A well-designed concession will help bidders build a robust model for their liabilities in the event of a win.
A concession should not stipulate the design, structures or even detailed scope of a POEMs system. Instead, it should give operators maximal freedom to shape a system that generates the best return for their investors. The concession uses constraints and obligations to ensure that objective aligns with growing the jurisdiction’s economy, inclusively and efficiently.
The award process for a concession should help bidders to probe costs of delivering the undertakings to which they commit if selected as winners. Some mY be spelt out as minimums in the concession (e.g. "Operators will provide one public-access kiosk for the markets for every 250 households with no publicly provided internet access within 5 miles.")
Other costs require under-the-hood investigation. As example, POEMs would have a right to integrate into an agriculture ministry's database of cattle certified as disease free. But that platform may be out-of-support, insecure or full of outdated records. If POEMs is to offer farmers a trustworthy market for sale of cows at various stages of their lifecycle, the registry may require remedial attention. A concession might stipulate that is at operators' expense.
Once a concession is announced, bidders should be given documentation for all platforms to which a winner will gain access. Subject to security clearances, experts for each consortium could be granted access to probe the inner workings and supervisory staff, to arrive at an estimate of the costs of integration into a modernized markets system. Anticipated costs could dictate phasing of rollout. If health checks on livestock are questionable, farmers may be among the last users to enjoy end-to-end markets on POEMs.