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Trust funds: The Sharing Economy Driving Social and Business Innovation

Collaborative Economy

In our fast-growing sharing economy, collaboration is good business—and it might just save the world

The numbers are so stark they are impossible to ignore. For the first time, in 2010, more people lived in cities than in rural areas. There are about 7.1 billion people living on the planet today; by 2050 that number will have grown to 9.6 billion—and 75% of the population will live in cities.

If that doesn’t tilt our world toward collaboration, nothing will. The movement toward a sharing-based economy was the focus of a Social Media Week panel called “Meshing Our World: The Sharing Economy Driving Social and Business Innovation.”

The good news is that sharing is not a new concept: We have long used the same parks, infrastructure, libraries, and so forth—a clear case of assets trumping ownership. The even better news is that in terms of the economy, the 21st century so far has been about sharing, about building businesses around human engagement—two prime examples being Airbnb and peers.org.

After all, the collaborative economy is about the physical as well as the social and digital, said Lisa Gansky, founder of Mesh Labs. And physical issues—density, connectedness, global warming, and economic recession—are a major factor in accelerating the sharing economy.

In a sharing economy, buyers and the sellers are peers, and entrepreneurs are designing things that are more easily shared because we want them to go through many hands. Thus, things designed to be shared will have higher value. For example, people drive 80% less when they use Zipcar than if they owned their own vehicle—and 40% of users have never owned one, which has led to our streets being filled with 40,000 fewer cars.

It’s not just the start-ups, either. Mud Jeans is now doing jean rentals. Patagonia is all about resale of product now, the panelists pointed out. If companies begin to incorporate the ideas of collaboration and reuse then they’ll be forced to think of products’ entire lifespans, from cradle to grave. They would consider new metrics and measurements: Instead of how many jackets were sold, for example, they might tally how many adventures per jacket. This might foster more of a culture of generosity.

As Robin Chase, founder of Zipcar and Buzzcar noted: “You have to be building community in everything you’re doing.”

Seth Godin, founder of Squidoo, posited the idea that making stuff is no longer as important as making connections, and that the future belongs to those who do work that matters.

When businesses think of themselves as peer collaborators, they think not in terms of consumers but rather co-workers, and the social component is transformative. Social media has been a huge force: from YouTube to Flickr to Couchsurfing and Airbnb, whose room capacities now rival the Intercontinental Hotel Group, and which have driven tourism to places where it might not have otherwise existed.

 Trust is the most profound part of this collaborative economy. Companies are building their entire business on trust, the panel noted—which is more good news for a more densely populated planet.

 “In the future,” said Noah Karesh, cofounder of Feastly, “the collaborative economy will be known just as ‘the economy.’”