2015: The Sharing Economy Is a New Norm
As social networks rose to prominence in the last decade, the notion of sharing emerged on a scale never before available. We shared pictures, videos, jokes and news with our families and friends—along with potentially millions of others through electronic social networks. Underpinned by increasingly ubiquitous and available global communication networks and devices that provide needed access, social networking has continued to proliferate. These networks now are entrenched as part of the norm, providing a fabric for communication, commerce and sharing.
In addition to personal sharing, though, social networks also offered previously unavailable access to customers for businesses. The Internet allowed a single person with a computer to sell products and services worldwide, but social networks layered a filter of established relationships and data intelligence on top of the wide-open Internet. Powerful buying recommendations could be curated and likely consumers could now be targeted in a highly efficient manner. Social networks became massive global marketing and distribution channels for business and services. Little did we know it at the time, but social networking set the stage for the sharing economy, along with a global economic crisis.
Out of all economic crises come winners and losers; some industries collapse while others are born. 2007 was a pretty miserable year—businesses contracted and unemployment rose—and in 2008 everything imploded. The economy became everyone’s top concern, and for good reason. What was “bad” in 2007 quickly turned to “worse” in 2008.
Yet, the sharing economy was born out of The Great Recession as people sought to reinvent themselves, leverage the assets they found themselves still holding and exploit holes in the fabric of existing businesses created by the shifting economics. That same year, sharing economy companies such as Airbnb and TaskRabbit were founded. Entrepreneurs started companies on the basis of providing consumer value by leveraging personal assets and giving otherwise un- or underemployed people the opportunity for a new income stream—and possibly even a new career as a small business owner.
In the years since, peer-to-peer economy, also called collaborative consumption or sharing economy, companies have exploded as the economy has recovered, demonstrating that the fundamentals of sharing-economy businesses have staying power. Just as the Internet, wireless communications and social networking before it, the sharing economy is here to stay. The sharing economy will be part of the overall economy going forward. Some industries—like taxi services in transportation and B&B rentals in travel—will be completed transformed, while others, such as financial services, will be only peripherally impacted. This is part of the Technology Revolution, as well as a new norm.
While 2014 was a huge growth year for individual sharing-economy companies, 2015 will see major expansion of the industry as a whole. Better leveraging of existing assets will spawn the growth of sharing-economy ecosystems with new suppliers to the winners, as well as expand the services that build on the initial models, building upon one another in true sharing style.
The initial peer-to-peer consumer model has started to evolve to one embraced by businesses, although business-to-business services may not see real growth until 2016 due to longer sales cycles and process evolution needed to truly embrace this new supply chain on a broad scale. It is possible the B2B market will never be as large as the consumer market, simply due to the personal nature of the services.
While some of the U.S.-based brands have expanded globally, sharing economy startups are not unique to the U.S. They are popping up all over the world. And just as in the U.S., the sharing economy has generated international controversy along the way, particularly when startups disrupt existing players.
Some would argue that the jobs that come with the sharing economy are not solid middle class jobs; they’re part-time with no benefits. Others would argue that those employed are making a better income than they would in hourly, full-time positions with benefits, and that they have added flexibility and control over their own destinies. Regardless, it is too early in this evolution to have significant longitudinal data regarding the total economic impact of the sharing economy. Years from now there will be many case studies in universities and think tanks around the world reflecting on this new form of commerce that changed the way we do business. Right now, we’re just getting started.