The sharing economy is an interesting collision between megatrends How I like to describe it is ownership is old school. In other words, it’s all about consuming in a different way. It’s around sharing or renting rather than buying and owning things long-term. There are two key types of sharing economy solutions. The first one is when you have your major market players, your corporations already thinking about selling their goods in a different way.
The other example of the sharing economy is a more distributed one. It’s creating a marketplace of entrepreneurs out of any of us and that particular one is interesting. Examples there include rideshare schemes like Uber and Lift. It includes things like Airbnb with people renting out rooms in different ways, or parking spaces, and that’s a great example because what happens there is you have something that is high value that you don’t use very much and it’s relatively easy to share. Whether that’s a home, a or a car or something. The idea is you can make revenue out of it by hiring it out enabled through a technology platform
So, you can either compete with these new start-ups and try to work out your own way of accessing these consumers, or, in many cases what we’re seeing is the adaptation approach which is these large companies acquiring sometimes for deals in the volume of billions these smaller start-up companies because they’ve been able to access market share so quickly, so innovatively and so effectively.
So, one threat for these new companies in the sharing economy space potentially those driven up by people bottom up putting themselves on sharing platforms, is around regulation. So, a lot of traditional industries, for example, city cabs or hotels create fiscal revenue streams for local and state government. We’re bypassing that with these new models of consumption. So, what is happening at the moment is we’re having cities especially look at how they can create fiscal revenues streams out of these new industries.
So, I’ve spoken a bit about business to consumer, B2C sharing economy solutions. One opening for the future is around business to business sharing economy solutions and I think there are two main types of that. First of all, the kind of hard assets. So businesses, for example, renting and sharing out office space, parking space, operational facilities, that’s a new way for businesses to engage with each other and create new revenue streams.
The second one is more intangible. It’s about sharing those intangible assets of IP, of brainpower and maybe even a brand. So, for example, could you create a sharing economy where businesses are starting to create revenue streams out of those intangible assets.
So, in terms of the megatrends that have collided to create the opportunity of the sharing economy I can think of two key ones. First of all is technology. Technology is at the heart of the sharing economy. It’s those online platforms accessible from smartphones that enable us to create and access this marketplace, marketplace of sellers and marketplace of goods and services. Very much that’s also enabled, in many cases, by GPS technology. So, we’re able to see where our seller is, how far away we are from accessing the goods, how many minutes until it arrives and then rate that in terms of performance as well.
The other key megatrends that is impacting upon the sharing economy is around resource scarcity. So, in terms of the changes we’re seeing in our society with the demographic shift, the move towards nine billion in 2050 and the scarcity already of shortages in our world of six billion in the world, there is a key situation where we’re not going to have enough stuff for everyone to own in the future. So, our consumption model of today is going to have to change so that people can still have access to the things that they like to have in everyday life. That really is the social conscience behind the move towards a sharing economy.
The sharing economy poses big questions for established businesses trying to avoid disruption, new entrants looking to scale their offering and policy makers trying to regulate and manage the market.
We’re currently engaging a range of influencers to identify the steps organisations and policy makers need to take to succeed in the sharing economy. We’ll be launching more of our thinking about this over the summer but if you’d like to join the debate now, please get in touch with