Mesh economy

The Mesh Economy is an economic model predicated on the sharing or meshing of talents, goods and services. This model is enabled by technology that makes connections between people, goods and services more efficient, resulting in new communities, organizations and business models for the public and private sector. Technologies such as mobile devices, social media, the internet, networked communications, 3D printers and sensors allow individuals and organizations to directly share existing resources rather than wait for third-party businesses or governments to deliver the desired goods and services. These people-to-people or peer-to-peer models^[1] create a new opportunity for individuals, communities, governments and corporations to transact and collaborate. The Mesh economy was first articulated by Lisa Gansky in The Mesh: Why the Future of Business is Sharing.^[2]

The shared emphasis among these business models and strategies is that unused value is waste.^[3] Waste takes two principal forms: excess capacity (cars parked for hours unused) and physical usefulness (physical materials throw away before their full value has been utilized). Prior to the popularization of Mesh Economy models, unused vehicles, excess food, idle time in factories, old mobile phones and even unused intellectual property have been been wasted resources. Mesh economy businesses and organizations marry technology with a new cultural sensibility to enable the economic and social value of these resources to be leveraged. ^[4]

Mesh economy organizations are committed to transforming waste into value in the form of products, services and new approaches to the efficient use of resources. Examples can be found in organizations ranging from small community groups to large, industrial platforms. Urban density favors the Mesh economy and many of the benefits generated by these new offerings are derived by city dwellers.^[5] These benefits include greater efficiency, affordability and enhanced community resilience.

Scope

The Mesh economy encompasses public and private sector organizations and firms working within the various realms of the sharing economy,^[6] the peer economy, the collaborative economy and the circular economy. The shift from defining unused value as waste to defining it as an opportunity to create value from more efficient resource use is the common factor among all mesh economy organizations. This shift surfaces in two primary ways. First are new models for reusing the excess capacity of infrastructure, owned assets and talents available to the wider market through networks, community and technology-enabled platforms.^[7] The second approach seeks to redefine waste from something that we throw away to an opportunity for reuse and redistribution, which is a hallmark of the circular economy approach. These two approaches to unused value as a resource emerge in mesh economy models as a commitment to the design, development and distribution of products, services and information that supports sustainable resource use and strong, resilient communities.^[8]

Origins and Influences

The realization that inefficient use of natural and human resources is creating environmental harms is a foundational inspiration for the mesh economy approach to resource redistribution. Within this larger insight, mesh economy influences are drawn from those thinkers who are seeking both to redefine waste and offer new approaches for resource use through product design and production and other market-based innovations. One important influence can be found in the work of William McDonough and Michael Braungart in their 2002 book Cradle to Cradle: Remaking the Way We Make Things. This holistic economic, industrial and social framework seeks to build efficient, waste-free systems that will enhance sustainability and reduce environmental harms. A second influence is found in work on biomimicry, an emerging discipline that seeks sustainable solutions by emulating nature’s designs and processes, as articulated by biologist Janine Baynus^[9] and her book Biomimicry: Innovation Inspired by Nature ^[10] These approaches to sustainable design are supported by new approaches to economic systems as articulated by Paul Hawken, Hunter Lovins and Amory Lovins in their 1999 work Natural Capitalism: Creating the Next Industrial Revolution. In this work, the authors argue that we must create a clear link in our economic systems between the production and use of human-made capital and the maintenance and supply of natural capital. Information technology enabled systems and approaches form a final influence. Here the work of Manuel Castells and his seminal trilogy, The Information Age: Economy, Society and Culture is foundational. The understanding that information technology enables excess capacity in human capital to be more efficiently deployed to solve social and environmental challenges as articulated by Clay Shirky in his 2008 book, Here Comes Everybody: The Power of Organizing Without Organizations is also an important influence.

Guiding Principles

The guiding principles for mesh economy businesses and organizations revolve around efficient use of resources within communities of producers and consumers. In this context, mesh economy models are rethinking both cradle to grave production of goods and services as well as the social norms necessitated by shared and efficient resource utilization such as transparency, trust and open systems. The mesh economy shares many of these principles with other models and movements that seek to create more efficient and resilient communities and economies as we move into a period of increasing interconnectedness and global population growth.

Unused value is wasted value

Unused value refers to the time that products, services and talents lay idle. This idle time is wasted value that mesh models businesses and organizations utilize. The classic example is that the average car is unused 92% of the time.^[11] This wasted value has created a significant opportunity for share economy car solutions such as Zipcar, CityCarShare, and Relay Rides. There is also significant unused value in "wasted time" as articulated by Clay Shirky in his analysis of power of "crowds" connected by information technology. Many of us have unused capacity in the course of our day. With social media and information technology, we can easily donate small slivers of time to take care of simple tasks others need doing. Examples of these crowd sourced solutions^[12] include the for-profit Mechanical Turk and the non-profit Ushahidi.

Waste as food

We tend to think of waste as something we no longer want and need to discard. The challenge with this point of view is that much of what we define as waste still has value that, with proper design and distribution, can safely serve as "nutrients" for follow-on processes, unlocking new levels of value in increasingly scarce and expensive resources. One example is "heirloom design"^[13] as articulated by physicist and inventor Saul Griffith.^[14] Heirloom design refers to products designed to be repaired, upgraded, retooled and reused, potentially for generations. The notion of waste as "food" that can safely nurture natural and human-made processes is also foundational to the circular economy. This model focuses on cradle-to-grave design processes in the industrial economy that are restorative. In the circular economy, biological materials flow safely back into the biosphere while technical materials are designed to recirculate in the built ecosystem without reentering the biosphere.

Access not ownership

A key mesh model principle, attributed to Lisa Gansky,^[15][16] is that the value of a product or service can be uncoupled from its ownership.^[17] Many traditional business models are predicated on the growth of consumer markets through the selling of more products. In many cases, owning a product versus renting or borrowing it makes little difference to its value. Mesh model businesses and organizations build platforms and systems that enable people to access the goods and services they need, for the time period they need them, without requiring ownership.^[18] These models serve business to business, business to consumer, peer to peer and government to citizen communities and markets.

Transparent and open data

The mesh model is fundamentally based on network-enabled sharing of information. In some cases, this information is shared in order to enable access to shared and rented goods and services, such as AirBnB which enables people to share their homes for a fee, or Taskrabbit, which is a platform that enables people to rent their services directly to others in their community. In other cases, mesh model organizations are sharing information about product design, distribution, repair and re-purposing in order to unlock the unused value in a good or service. Many state, local and federal governments^[19] are also engaged in Open Data initiatives and projects such as data.gov^[20] and the London Data Store.^[21] In all cases, mesh model organizations and initiatives understand that the information they access and retain will be more valuable, and return more value to them, if it is transparently available to the larger community. Data shared in a network can over time become more valuable than the artifact it point to. Open and transparent access to information will enable greater innovation,^[22] more efficient use of products and services, and support resilient communities.^[23]

Trust

Mesh model organizations must be committed to building and validating trusted relationships between all members of their community, whether they be producers, suppliers, customers or participants. Many mesh economy organizations collect significant amounts of information about the participants in their systems.^[24] Many also intermediate shared access to items of value such as homes, cars, offices, equipment and tools. Sharing in these contexts contains some social risk that must be re-mediated through the development of trust. Many mesh organizations are working to develop reputation management systems, which serves as a means for building and maintaining trust within a community. Trust is established by mesh model organizations through a continual commitment to learning, testing and engaging with the community they serve.

Urban density favors the mesh

According to the World Health Organization for the first time ever, a majority of the earth’s inhabitants live in cities.^[25] This move away from agriculture-based economies to economies based on “mass industry, technology, and service” is predicted to continue. By 2030, 6 out of every 10 people will live in a city, and by 2050, this proportion will increase to 7 out of 10 people. In the US today, eight out of ten Americans live in cities.

Cities, with their densely connected populations, are generally agreed by most economists and urban planners to be more efficient and productive than sparsely occupied areas.^[26] This trend toward urban connectivity creates an optimal environment for mesh businesses and organizations. Cities as platforms for sharing is emerging as a powerful concept heralded by many observers of the sharing or collaborative economy.

Cities as platforms for sharing is gaining traction in part through the open data and open gov movements, which have encouraged many cities to share data sets in areas such as transportation, health and sanitation information, and infrastructure.^[27] These data sets have led to a number of entrepreneurs to form businesses that serve the public good, such as SeeClickFix and OpenCity. These early efforts have set the stage for a host of city-based sharing services to emerge. Bike Sharing is now in 500 cities around the world, for example.^[28] Lisa Gansky , author of The Mesh: Why the Future of Business is Sharing^[29] and founder of Mesh Ventures,^[30] states, “Data is the gateway drug to the sharing economy. The larger shift is about bringing commerce and community together using mesh concepts, converting waste to value.”

Driving Forces

There are five driving forces behind the emergence of the mesh economy.

1. Information Technology and Social Media: A host of enabling technologies has reached the mainstream, making it easy for networks of people and organizations to transact directly. These include open data,^[31] the ubiquity and low-cost of mobile phones,^[32] and social media.^[33] These technologies dramatically reduce the friction of mesh-based business and organizational models.
2. Population Growth and Urbanization: By 2050 there will be roughly 9.3 billion people in the world. According to the United Nations 64.1% and 85.9% of the developing and developed world respectively will be urbanized.^[34] The denser living arrangements afforded by cities offer more opportunity for sharing resources and services.
3. Increasing Global Crises (financial, environmental and social): The financial crisis of 2007- 2008 ^[35] meant that unemployment and income insecurity became widespread across the developed world, forcing many people, organizations and governments to make do with less. In this period many sharing economy businesses, such as Airbnb, Zipcar, Kickstarter and Taskrabbit began to thrive. In addition, recent natural disasters, such as the Japanese earthquake and tsunami,^[36] the Chilean earthquake,^[37] Hurricane Sandy,^[38] and the 2012 US drought,^[39] have demonstrated that local issues have clear global impact, creating an increasing interest in more resilient social and economic structures. Finally, widespread social unrest as evidenced by the Arab Spring, Arab Winter ^[40] and the Occupy movement further underscore a period of rapid dislocation and change.
4. Increasing Volatility in Cost of Natural Resources: Rising prosperity across the developing world coupled with population growth is putting greater strain on natural resources and has caused a spike in costs and market volatility. This has been increasing pressure on traditional manufactures to seek design, production and distribution alternatives that will stabilize costs and smooth projected expenditures. In this context, the circular economy approach has been gaining interest among many global corporate actors. While a handful of pioneering companies are leading the way, wider adoption will rely on mesh economy skills such as the collection and sharing of data, the spread of best practices and increased collaboration.^[41]
5. The Growth of the Sharing Economy: In the past several years, the sharing economy has been growing at a steady rate. There are thousands of companies and organizations^[42] in all parts of the world that enable people to share and or rent, lend or gift goods, services, skills and information. Forbes estimates the revenue flowing through the share economy will surpass $3.5 billion in 2013 with growth exceeding 25%.^[43] The sharing economy is starting to significantly disrupt a number of mainstream industries, creating greater interest in mesh model organizations from all sectors of the economy.

See also

• Circular economy
• Collaborative consumption
• Commons-based peer production
• Cooperative
• Creative Commons
• Crowd funding
• Crowd sourcing
• Internet of Things
• Internet of Services
• Life cycle assessment
• Open Data
• Peer-to-peer lending
• Radical transparency
• Regenerative design
• Reputation
• Sharing economy

References

Further reading

• Neal, Gorenflo. "Mesh2013: Socialstructing the Sharing Economy". Shareable. 
• Kelly, Kevin. "From Mass to Mesh". The Technium. 
• Leonard, Andrew (January 2012). "The Economy of Sharing". Sunset Magazine. 
• Nanos, Janelle (May 2013). "The End of Ownership". Boston Magazine. 
• Wang, Ray. "Monday’s Musings: Four Elements for A #SharingEconomy Biz Model In #MatrixCommerce". Software Insider. 
• Freidman, Thomas (20 July 2013). "Welcome to the Sharing Economy". The New York Times. 
• Rosenberg, Tina (5 June 2013). "It's Not Just Nice to Share, It's the Future". The New York Times. 

External links

• Gansky, Lisa. "The future of business is the "mesh"". TED talk. 
• Gansky, Lisa. "The Future is Sharing". PopTech. 
• Gansky, Lisa. "The Rise of Pre-Commerce". Fast Company/Co-exist. 
• Gansky, Lisa. "Is Your Business Meshy?". Rise to the Top; Podcast. 
• Gansky, Lisa (August 25, 2011). "Do More, Own Less: A Grand Theory of the Sharing Economy". The Atlantic. 
• Gansky, Lisa (September 9, 2010). "Consumers Will Share Everything". Forbes. 
• Gunther, Mark. "The sharing economy and me". Mark Gunther. 
• Leonard, Andrew; Jess Chamberlain (January 2013). "The Economy of Sharing". Sunset. 
• "Lisa Gansky, The Mesh". The Startup Success Podcast. 
• "Content Marketing Podcast Series: Interview with Lisa Gansky". Nimble.