collaboration: rise of the third wave

January 25, 2016 0 comments

The transformative power of collaborative consumption…

It changes the way we live by transforming our relationship to ownership. We do not have to individually own things such as cars that sit idle in our garage or specialized equipment that have limited use, but can pay for shared access. Indeed, an interesting question is emerging: what does it mean to own something in the digital age?

Our smartphones are like remote controls to the physical world, enabling us to unlock the ‘idling capacity’ of assets redistributing usage through networks and marketplaces, and getting what we need almost on demand. Secondly, it changes our relationship to trust. The rise of peer-to-peer lending platforms, such as Zopa or ridesharing platforms such as BlaBlaCar, signal a massive shift in how people view trust. The idea of lending money to someone you do not know or getting in a car with a total stranger seemed risky, even absurd a few years ago but they are quickly becoming mainstream behaviors.

Collaborative consumption amounts to a reverse journey of sorts, from hyper consumption to the primate instincts hard-wired
in us. Please elaborate.

515-2Sharing is a core part of human nature. Think back to villages and markets—sharing, bartering, swapping, renting, lending, and trading directly with one another is what we did for thousands of years. Back in the day, a neighbor used to be able to get a cup of sugar from another neighbor, or borrow the lawn mower. This kind of neighborly sharing faded out as a ‘me’ system of consumerism encouraged each and every one of us to own things. The irony is that technology is taking us back to old market behaviors that are innate to us but they are reinvented in ways relevant for the Facebook age.

New systems are rapidly emerging that are creating efficiency and trust to share and collaborate in ways and on a scale never possible before. In the first wave, we experienced how this interconnectivity made it easy to share information via email. We then entered the second wave whereby the emergence of social networks enabled the exchange of photos, video, and music. What is happening today is the rise of the third wave, where it is now possible to share everything—spaces, skills, stuff—with a wide network of people.

What are the drivers powering this collaborative revolution?

The evolution of collaborative consumption is the perfect storm of four key drivers: the global financial crisis, increasing pressures on the environment, resurgence in the need to be a part of community, which has largely been enabled through new technologies. While the combination of these drivers is critical to the sudden explosion of the movement, it is not reliant on any particular one, and even in more stable economic times, the motivation for being involved in collaborative consumption is still strong, albeit different.

How would you define reputation capital as the new social currency?

We are in the new era where our reputation is captured not just by traditional metrics such as marks on a report card, credit scores, or the absence of criminal records. Our reputation data comes from different sources, both offline and online, and this makes up our ‘reputation capital’. Whether it be what kind of passenger we are on an Uber ride or what kind of seller we are on Gumtree, information is captured and stored that will be used by other people to assess our identity and our capabilities. Reputation capital will not only transform how we trade but how we perceive our identity and our trustworthiness in the 21st century.

The power of technology in building trust between strangers…

Technology has enabled new kinds of accountability and trust. It not just changes the way we buy goods on marketplaces like Etsy and Ebay but also how we travel, bank, work, and even love. It makes ideas that might have seemed weird, risky, or even dangerous now normal to people, and this is largely because of new mechanisms for building trust. By the time we get into someone else’s car or lend them money, by the time we hire them to build our IKEA shelves, or go out with them for a drink, we have a real-time sense of who they are. With a click of a button, we have unveiled vital information about them which allows us to be more open to trying an activity we otherwise would not have considered.

Implications of a collaborative economy vis-à-vis the labor market…

515-1The collaborative economy is part of a reinvention of the notion of a ‘job’. Providers on platforms have the freedom to choose which kinds of jobs they do and in some instances who they work with. They also have the flexibility to choose how many hours to spend in a particular job. It is part of the rise of the ‘micro-entrepreneur’, the realisation that we can all in some way make money from the skills and time we have.

To give some examples, a person can have a full-time job at an accounting firm and also sell painted planter pots on Etsy. Or a former McKinsey employee who now stays-at-home with her kids can choose to do some freelance consulting through the platform Skillbridge. There are lots of stories like these I have encountered and the common reason I hear for them joining these platforms is ‘control’ and ‘choice’. On the other hand, employers can tap into a large pool of talent that goes beyond the walls of their offices when needed. For example, an IT company can hire a new fleet of freelancers to work on a big new project without having to hire new full-time employees.

For people who seek services of workers in the collaborative economy, they can expect more transparent services, and a closer and more collaborative relationship with whom they hire.

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