Economic systems, while certainly a “system” are rooted in humans – as the behavior of people within the system(s) are necessary components needed in order to initiate and actually make the system a living/breathing organism or “thing”.
In our work with favornomics – a human-centered, human-powered marketplace/eco-system concept, we will explore the dynamic transactional relations among participants in various systems of currency and exchange so that we can better understand the roles of behavior, and the socio-economic and cultural context of those exchanges.
Here, we will start our journey with the share economy.
As a caveat much of the content below is from the share economy wiki page so as to provide standard, accepted definitions.
The share economy (sometimes referred to as the peer-to-peer, mesh, or collaborative economy; also collaborative consumption) is a socio-economic system built around the sharing of human and physical resources. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations.
These systems take a variety of forms, often leveraging 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. A common premise is that when information about goods is shared, the value of those goods may increase, for the business, for individuals, and for the community.
“The more we share the more we have.”
– Leonard Nimoy
An important element of the share economy, collaborative consumption – is a class of economic arrangements in which participants share access to products or services, rather than having individual ownership. Often this model is enabled by technology and peer communities.
The collaborative consumption model is used in marketplaces such as eBay, Craigslist, and Tradepal, as well as emerging sectors such as social lending, peer-to-peer accommodation, peer-to-peer travel experiences, peer-to-peer task assignments or travel advising, car sharing or commute-bus sharing.
How far does the share economy reach?
The share economy encompasses a wide range of structures including for-profit, non-profit, barter and co-operative structures. It provides expanded access to products, services and talent beyond one to one or singular ownership, sometimes referred to as “disownership”.
Corporations, governments and individuals all actively participate as buyers, sellers, lenders or borrowers in these varied and evolving organizational structures.
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.
Looking at the list of values above, we can see that they are not new concepts or characteristics. Many of those same characteristics of the share economy would find their place as necessary component-characteristics for any of the ancient gift-giving, hunter/gatherer, or other barter-based societies.
We’ll discuss those in more depth in the coming weeks, but, for the purposes of this post now – let’s take a look back at how the term and ‘share economy’ came to be.
Origin of the Share Economy
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. Benkler then extended that analysis to “shareable goods” in Sharing Nicely: On Shareable goods and the emergence of sharing as a modality of economic production.
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), Lisa Gansky in The Mesh: Why the Future of Business is Sharing, in a global directory of sharing economy (mesh) businesses and organizations, the online magazine and community, Shareable.net., and The People Who Share – the campaign to mainstream the Sharing Economy who run Global Sharing Day, reaching over 70 million people in 192 countries.
The term “collaborative consumption” was coined by Marcus Felson and Joe L. Spaeth in their paper “Community Structure and Collaborative Consumption: A routine activity approach” published in 1978 in the American Behavioral Scientist. The term was used in more contemporary times by Ray Algar, a UK-based management consultant in an article entitled “Collaborative Consumption” in the Leisure Report Journal in 2007.
The concept has also been championed by Rachel Botsman and Roo Rogers in their 2010 book What’s Mine Is Yours: The Rise of Collaborative Consumption. In June 2010,ABC Television’s Big Ideas programme included a segment showing Botsman’s speech at the TEDx Sydney conference in 2010, describing collaborative consumption as “a new socio-economic ‘big idea’ promising a revolution in the way we consume”. In 2011 Botsman described it as a social revolution that allows people to “create value out of shared and open resources in ways that balance personal self-interest with the good of the larger community.” At TEDGlobal2012 Botsman articulated that the concept of trust, across multiple platforms, would constitute the currency of a new collaborative economy, asserting that “reputation capital creates a massive positive disruption in who has power, influence and trust.”
The realization that inefficient use of natural and human resources is creating environmental harms is a foundational inspiration for the mesh economy approach to resource redistribution. Within this larger insight, mesh economy influences are drawn from those thinkers who are seeking both to redefine waste and offer new approaches for resource use through product design and production and other market-based innovations. One important influence can be found in the work of William McDonough and Michael Braungartin their 2002 book Cradle to Cradle: Remaking the Way We Make Things. This holistic economic, industrial and social framework seeks to build efficient, waste-free systems that will enhance sustainability and reduce environmental harms. A second influence is found in work on biomimicry, an emerging discipline that seeks sustainable solutions by emulating nature’s designs and processes, as articulated by biologist Janine Baynus and her book Biomimicry: Innovation Inspired by Nature.
These approaches to sustainable design are supported by new approaches to economic systems as articulated by Paul Hawken, Hunter Lovins and Amory Lovins in their 1999 work Natural Capitalism: Creating the Next Industrial Revolution. In this work, the authors argue that we must create a clear link in our economic systems between the production and use of human-made capital and the maintenance and supply of natural capital. Information technology enabled systems and approaches form a final influence. Here the work of Manuel Castells and his seminal trilogy, The Information Age: Economy, Society and Culture is foundational. The understanding that information technology enables excess capacity in human capital to be more efficiently deployed to solve social and environmental challenges as articulated by Clay Shirky in his 2008 book, Here Comes Everybody: The Power of Organizing Without Organizations is also an important influence.
In 2011, collaborative consumption was named one of TIME Magazine’s 10 ideas that will change the world. The financial crisis of 2007–2010 and subsequent housing bubbles have prompted consumers to reconnect through peer-to-peer marketplaces that turn underutilized assets and resources into new jobs, income streams and community networks. Napster pioneered peer-to-peer file sharing and subsequent platforms have emerged to facilitate the sharing of content, cars, bikes, tools and random household appliances.
At the end of the day, the share economy is about people and their behavior. It’s about their relationships with each other and using “appropriate technology” to help facilitate those connections in order to create more meaningful and resource-efficient ‘transactions’.
We will continue our conversation on the share economy and extend it to cover all of its underlying elements, while juxtaposing them with related topics, economic models and systems of production or exchange.
And as favornomics continues to evolve as an idea and body of work/thought, we are always looking for others to collaborate with us by sharing their wisdom, experiences and thoughts to help broaden and reinforce our thinking.
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