Why the Digital Society empowered the Sharing Economy
Guest blog by Linda Malmgren.
With the evolution of Internet came a transformation of society. The internet allowed us to create a world where technology is affecting our everyday lives and where our digital tools became an important part of who we are: The Digital Society.
With the digital society came the power for people to create new communities, engage across boundaries, and change the way we do business. The global economy has undergone some dramatic changes as a result of modern technologies. Multiple industries have faced new competitors that use these technologies to reshape the manner in which goods and services are delivered to end users. New business models based on old knowledge appear and leads to a boom in the concept we know as ”the Sharing Economy”.
”The “Sharing Economy” describes a type of business built on the sharing of resources – allowing customers to access goods when needed.” (Triple Pundit)
Some say that the sharing economy came with the digitalization, others say that it´s as old as humanity. I would agree with both. We have shared tangible things among us since the birth of humanity, but along with the digitalization came collaborative consumption and the ”sharing economy” phenomena.
The digitalization has given a rise to business models that gradually chip away revenues from the traditional companies – disrupting industries. The internet simply facilitated sharing of not just digital things, but also non-digital tangible things. Today we have companies such as AirBnB and Uber who are already bigger than several of their established competitors such as traditional cab services and hotel chains.
As pointed out in Inquentia’s Megatrend report on the digital society we live in a world where almost everything will be connected. As we moved into the digital society we also moved into a world where modern technologies gets integrated to our everyday lives. Social media and mobile technologies have enabled the latest expansion of the sharing economy and turned it into big business.
Airbnb allows individuals to share their homes, while Lyft and Zipcar transform private cars into common resources. All these are profit making corporations, but they only take a fraction of the fees levied, passing the rest on to the owners/lenders.
However, the shared economy phenomena is not limited to peer-to-peer transactions. Corporations have been opening up to assets sharing in order to increase revenue, customer experience or push the industry forward. Tesla has since its beginning installed their power charges on others land in order to increase their customer experience and access to power stations. In return, the roadside restaurants has found an increase in their revenues as it takes about 30 minutes to charge the car and the Tesla owners have time over where they can spend money in their shops or restaurants. This is a way of sharing assets.
These new services of peer-to-peer, and business-to-business activities are potentially powerful tools for building an economy centered on practices of sharing. But achieving that potential will require more than access to the internet.
The sharing economy is based on more than what the eye can see. Behind the apps and services, that we use, are complicated platforms who, in order to reach their full potential, need to be democratized through ownership and governance. Technologies are only as good as the political and social context in which they are employed. As the sharing economy expands, its practices has to be embedded in political and regulatory contexts.
Furthermore due to several experts the sharing economy would not have succeeded simply by the digitalization. It is also dependent upon other factors such as demographics and environment.
We see a generation of young people who are open to the idea of sharing their personal things, such as homes, cars etc. This generation has been proven to drive the majority of sharing that takes place today.
People also face news about environmental issues on a global level everyday. They realize that through sharing we can limit the worlds overconsumption, and prevent the negative environmental impact.
So what happens when the younger generation grows up and have a family, will they continue to share? Or will they change their consumption habits? Will the environmental issues continue to be as important in a peer-to-peer situation?
Lets take a step back and look at it again.
The younger generation have been exposed to the digitalization since they where born. They have gradually been brought up with the openness that the Internet has brought us. They are used to, and rely on, the internet as they see it as something normal in their daily life. A tool they have never lacked and therefore trust.
The same goes for the environment. Would we have been as exposed to the impact on our environment without access to the internet? We use digital platforms, and social media, to raise global awareness for climate actions, energy consumption, refugee questions and so on. Through modern technologies we build an awareness, but also change daily habits, among the world population. We would not be as eager to limit our consumption and transit into a sharing economy without the knowledge of environmental factors, which we face due to the digitalization.
So in the end. Although all factors and drivers for the shared economy are equally important, we can derive them back to one thing: the creation of the digital society.
The sharing economy, facilitated by the increased digitalization of the world, is predicted a tremendous growth. Some even say that will be bigger than the Industrial Revolution.
About Linda Malmgren
Linda has several years of experience from the mobile and IT business, most recently as Head of Communications at Mobile Heights. Linda was involved in several projects involving community engagement, conferences, hackathons, besides her key role as nurturing innovation and promoting companies from Skåne Region in south of Sweden.