Have you ever used Airbnb for accommodation whilst traveling?
Have you ever caught a ride with Uber?
Have you ever hired someone on Airtasker to help you complete a chore you just couldn’t (or didn’t want to) do yourself?
Whilst you may have appreciated the ease, affordability and uniqueness of these experiences, you probably didn’t appreciate the fact that you were actively participating in a huge market shift. A new economic model has arrived. It’s about a shift from ownership to access, and importantly, it’s not just another start-up trend, but transformative lens.
The above mentioned are just three particularly well known examples of what has been coined “the collaborative economy” (by our DSS speaker Rachel Botsman in her book ‘What’s Mine is Yours: the Rise of Collaborative Consumption), but there are hundreds more examples from all around the globe. TIME named the Collaborative Economy as one of the “10 Ideas That Will Change the World”, and here at the GLP, we have just been discovering the magnitude of its potential for consumer value and power ourselves.
The Collaborative Economy also has potential outside consumer value for things you may not have considered – such as hospital beds. A ‘patient hotel’ was trialled at Lund hospital in Sweden, which brought hospital bed expenses down from 3000 Swedish Kroner per night to 823 per night. Enabling patients to room-share with other family members helped patients with greater self-sufficiency and alleviated pressure on nurses who could share responsibility with family members. The result was more efficient shifts for nurses and a reduction in recovery time for patients – on top of the monetary savings for patients and for the government in nursing wages.
Explaining its three key benefits, Botsman says “Collaborative economy activates the untapped value of all kinds of assets through collaborative models and marketplaces that enable greater efficiency, empowerment and impact”.
It’s probably difficult for a lot of you to remember now, but back in the early 2000s Metallica sued the MP3-trading software company Napster and received what was probably, for them, unexpected back lash from their consumers. Fans and consumers were disappointed at the greed of the already incredibly successful band and the way they legally pursued Napster, which was at the time a pioneering online file-sharing service.
The highly publicised Napster ordeal could be seen as a signal of the beginning of the end; the end of the above-all importance of ownership. And in a world where consumption has seen consumers in the United Kingdom with an “estimated £30 billion ($46.7 billion) worth of unworn clothes lingering in their closets” and in 2010 alone “the textile industry ranked third for overall in Chinese industry for wastewater discharge amount at 2.5 billion tons of wastewater per year”, it’s a welcome deterioration – despite the panic it initially triggered. Could this be the end of the age of hyper-consumption?
In 2013, this “disruptive economic force” (Virgin.com) made the cover of The Economist, and the article suggested that “the big change is the availability of more data about people and things, which allows physical assets to be disaggregated and consumed as services.”
PWC estimates that by 2025 the collaborative economy sector will be worth $335 billion. And why?
Because like the two entrepreneurs who started the ride-sharing service Bla Bla Car noticed – 80% of all car trips are solo rides. With the environmental crisis our planet faces, this is a just one of thousands of examples of “idling capacity”, waiting to be noticed, and have technology applied to it to magnify its potential.
But what is particularly intriguing about this phenomenon is the way the enablers of this market are building trust – the oil that fuels the collaborative economy. And not just the trust you have with those familiar to you – but trust between strangers.
Being a Global Leader is about having a sense of community and global responsibility and understanding how you can be an innovator, actively contributing to building and leading sustainable, systemic change in your workplaces and in your lives, whether you are an actuary, an early education teacher, a lawyer or a journalist. Understanding the basis of the collaborative economy could help spark some entrepreneurial ideas of your own with regards to your community, work or social life.
Make sure you’ve marked the evening of Wednesday October 7th in your diary so you do not miss GLP’s 2015 Distinguished Speaker, Rachel Botsman, inspire you with her vision for Collaborative Consumption. Not only is the event compulsory, but it will be of great benefit to your development as a Global Leader.
Chloë Spackman, GLP Manager
In the weeks leading up to the main event I will be posting more information, websites and interviews about the Collaborative Economy to get you inspired and informed, so please check back!