We are in the midst of a revolution in ownership. People are telling governments and businesses, the prior masters of their destinies: we can get what we need from each other – we are no longer solely dependent on you.
This phenomena knows many names. I prefer the sharing economy. The sharing economy is a socio-economic system built around the sharing of human and physical assets. In this world, people formerly known as “customers” add take on roles as funders, producers, sellers and distributors. In other words, the crowd is acting as both sides of the supply chain, essentially becoming a company in and of itself.
When sharing, access trumps ownership. While traditional business models are predicated on the value of exclusive ownership, sharing economy systems enable people to access what they need, for as long as they need them, without the price and hassle of traditional ownership, essentially making individual ownership obsolete.
For instance, why buy a car when I can participate in a car sharing service like Zipcar or Lyft? Why buy a vacation home or pay for an expensive hotel when AirBnB provides me access to an unlimited variety of awesome digs at competitive prices anywhere around the world? And it goes way beyond the realms of accommodation and transportation; the sharing economy is emerging in sectors such as fundraising, travel advising, food preparation, office space, household products, professional services, and so on.
So where did this all come from? To be brief: we need it.
The financial crisis of ’08 has left its mark. Financial hardships and rising income inequality have prompted consumers to get creative, turning underutilized resources into income streams and valuable community networks. Monetizing previously idle resources can bring in some serious cash. They say the average car is unused over 90% of the time. Rent that bad boy out and buy yourself a smoothie (or like 100 smoothies)!
We recognize that we live in a world of finite resources, and in the face of such scarcity, one must innovate. By redefining what is waste (and what is not), we can more effectively redistribute what we already have. We have shifted from seeing unused things as waste to seeing them as an opportunity to create sustainable value.
Finally, the movement is being driven by a societal shift towards denser cities (re-urbanization) and general consumer disillusionment (f*ck the man!). By 2050, 7 out of 10 people will live in cities. This trend creates the ideal environment for the sharing economy’s continuing prosperity. Simultaneously, consumer disillusionment drives us to make more efficient use of existing resources instead of referring to our natural go-to behavior: constantly buying more.
And just what has catalyze this force of nature? Technology, duhz.
The collaborative economy is the highly ambitious firstborn child of our digital economy. The rise of smartphones, proliferation of social networks and effortless internet access enable individuals to share regardless of the time and place. Rather than rely on a third-party middle-man, technologically powered tools enable us to directly share existing resources amongst ourselves. Digital payment is simple and safe. Online reputation systems where people rank buyers and sellers keep the system running smoothly. We share because technology makes it easy to share.
In the technology-powered sharing economy, your reputation is everything. If you can’t be trusted, you don’t get to participate. Reputation capital is either your ticket to prosperity or your scarlet letter, forever blackballing you from the community.
Now lets imagine if tomorrow the economy starts booming, growth rates skyrocket. Everyone is literally dripping with money. Will we continue to share? If the sharing economy is predicated on a depressed labor market, will our newly enforced value system of sustainability, trust and human connection survive economic prosperity?
If we no longer need to share, will we still want to?
I say yes. A new economic system has emerged, and its here to stay. As governments continue to slim down and automation and data allow companies to work better with less people, we will continue to become a more entrepreneurial society. Leveraging digital platforms and markets, we have the freedom to invent our own jobs. So welcome, to the new economy of the millenniala.