Sharing economy

The sharing economy (a.k.a. the share economy, the shared economy, the mesh or the collaborative economy) is a sustainable economic system built around the sharing of human and physical assets. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organisations. These systems take a variety of forms but all leverage information technology to empower individuals, corporations, non-profits and government with information that enables distribution, sharing and reuse of excess capacity in goods and services.^[1] A common premise is that when information about goods is shared, the value of those goods increases, for the business, for individuals, and for the community.^[2]

Scope

The sharing economy^[3] encompasses a wide range of structures including for-profit, non-profit, barter and co-operative structures.^[4] The sharing economy provides expanded access to products, services and talent beyond one to one or singular ownership, sometimes referred to as "disownership".^[5] Corporations, governments and individuals all actively participate as buyers, sellers, lenders or borrowers in these varied and evolving organizational structures.^[6] Share-based offerings are based on a set of values that often includes trust, transparency, economic empowerment, creative expression, authenticity, community resilience and human connection.

Origins

The term "sharing economy" began to appear in the mid-2000s, as new business structures emerged inspired by enabling social technologies and an increasing sense of urgency around global population growth and resource depletion. One inspiration was the tragedy of the commons, which refers to the idea that when we all act solely in our self-interest, we deplete the shared resources we need for our own quality of life. The Harvard law professor, Yochai Benkler, one of the earliest proponents of open source software, posited that network technology could mitigate this issue through what he called 'commons-based peer production', a concept first articulated in 2002.^[7] Another thread of inspiration was the notion that linear systems of production and distribution are ultimately incompatible with the finite resources of our planet. Alternative approaches were becoming increasingly necessary, an issue voiced by Annie Leonard in her 2007 video The Story of Stuff. The power of shared social and economic activity to address worldwide resource depletion and create new models for the development of wealth and social value was popularized by Rachel Botsman and Roo Rogers in What’s Mine is Yours (2010),^[8] Lisa Gansky in The Mesh: Why the Future of Business is Sharing,^[9] in a global directory of sharing economy (mesh) businesses and organizations,^[10] the online magazine and community, Shareable.net.,^[11] and The People Who Share ^[12] - the campaign to mainstream the Sharing Economy who run Global Sharing Day, reaching over 70 million people in 192 countries.^[13]

Structures

Sharing economy business models emerge from our oldest instincts as humans -– cooperation, sharing, generosity, individual choice and flexibility. Models include renting, bartering, loaning, gifting, swapping and forms of shared ownership such as cooperative structures. Many of the most popular models are based on what is called a "two-sided market" which is a market where an information technology-enabled platform is developed, built and maintained by a third party but the function of the platform is to enable sharing economy activities. Most sharing economy structures are enabled by new technologies of connection. The most popular structures include:

P2P marketplaces

In this model, individuals transact directly with other individuals on a two-sided marketplace platform maintained by a third party. In two-sided marketplaces, the development, maintenance and policies of the platform are maintained by the third party, which can be an organization, a business or a government. These are not strictly P2P systems in the technical sense as there is generally a central market platform that enables the transactions. Examples include Airbnb and Krrb.

Crowdfunding platforms

These models also use a two-sided marketplace to enable individuals to contribute funds to entrepreneurs, artists, civic programs and projects.^[14] Examples include Kickstarter and Indiegogo.

Innovation marketplaces

These marketplaces enable individuals and professionals to share their intellectual capital to solve problems. Examples include Architecture for Humanity and Innocentive.

Government to business platforms

The movement at all levels of government – state, local and federal – to release open, machine-readable data sets is encouraging significant innovation around shared data.

Government to citizen platforms

Increasing demands from citizens for government transparency and collaboration are creating new democratic sharing models and structures. Some examples include the White House initiative on Open Government and the city of Oakland's Open Budget Project.

Driving forces

There are driving forces behind the rise of sharing economy organizations and businesses.

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,^[15] the ubiquity and low-cost of mobile phones,^[16] and social media.^[17] These technologies dramatically reduce the friction of share-based business and organizational models.
2. Population Growth: 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.^[18] The denser living arrangements afforded by cities offer more opportunity for sharing resources and services.

Key organisations promoting the sharing economy

A number of organisations have emerged in recent years who seek to connect collaborators and mainstream sharing. Key among these are:

• The People Who Share:^[19] Founded by Benita Matofska in January 2011, The People Who Share is a UK-based non-for-profit whose mission is to mainstream the Sharing Economy. They run a global campaign to raise awareness and initiate action around the Sharing Economy: Global Sharing Day. In 2013 this campaign reached over 70 million people in 192 countries.^[20] In 2014 Global Sharing Day will be held on June 1.

• OuiShare:^[21] A French-based non-for-profit aiming to connect efforts within the Sharing or Collaborative Economy to create a global network of collaborators. Having started in France in 2012, they have spread to Europe, Latin America and the Middle East.

• Shareable:^[22] "Shareable is a nonprofit news, action and connection hub for the sharing transformation",^[23] and the primary global online magazine on the Sharing Economy.

• Collaborative Consumption.com:^[24] Founded by Rachel Botsman, after her book 'What's Mine is Yours' (2010),^[25] Collaborative Consumption.com has been growing as an online resource for collaborative consumption across the globe and as a network for the community within this space. They "curate news, content, events, jobs, studies and resources from key media outlets and industry blogs, as well as produce original content".^[26]

• The Mesh:^[27] Who hold a global directory of Sharing Economy Businesses and organised Mesh2013,^[28] a global gathering for the 'instigators' of the Sharing Economy.

The trust issue

The Sharing Economy relies on the will of the users to share, but in order to make an exchange, users have to be reliable and trustworthy. But how can you rely on people you don't know? How can you build a reputation when using different P2P marketplaces? This issue is central in the development of the collaborative consumption, and there are fresh new possibilities to tackle the problem. New start-ups are developing a solution such as Traity, TrustCloud in the US and Fidbacks in Europe.

See also

• Circular Economy
• Collaborative consumption
• Creative Commons
• Crowdsourcing
• Digital Collaboration
• Maker Faire
• Mesh economy
• Open Data
• Open Knowledge Foundation
• Open Source
• Participatory Democracy
• Social Peer-to-Peer Processes
• Time banking
• Two-sided market

Notes and references

Further reading

• From Mass to Mesh. Kevin Kelly, The Technium, April 8, 2011
• The Rise of Pre Commerce, Co-exist, Lisa Gansky
• A Policy Agenda for the Sharing Economy, The Urbanist, October 2012
• The Future is Sharing, Poptech, Lisa Gansky
• All Eyes on the Sharing Economy, The Economist, March 9, 2013
• The Twlight of the Sharing Economy—or the Dawn?, The Atlantic, May 7, 2013
• The New Sharing Economy, Survey
• The End of Ownership, Boston Magazine, May, 2013
• Share or Die: End of Ownership and Rise of the Sharing Economy, Weleet, December 2013

External links

• The Future of Business is the Mesh, TED Talk, 2010, Lisa Gansky
• The Ellen Macarthur Foundation
• Sharing Economy: 'Plan B' For Moving America Forward TED Talk, 2011, Randy White
• Shareable - a leading news, action, and policy resource for the sharing movement