The Sharing Economy: Changing Business For The Better
The Sharing Economy isn’t just Airbnb and Uber. It’s a phenomenon that is saving lives
Saasha Celestial-One is the 42-year-old American co-founder of Olio, a food sharing app that connects neighbours with each other as well as with local businesses so that no edible food goes to waste. Through the Olio app, Saasha is starting what she calls, a “foodsharing revolution”.
“Our big vision is to connect everyone, so that we are all well fed,” she explains. “If we could displace 5-10 per cent of new purchases at supermarkets, the downstream impact of that would be phenomenal for the environment.”
“Our goal is to build an established secondary market for food. Currently, our consumption takes place in the primary market, in supermarkets. If there is a viable secondary market that eliminates food waste and starts to displace the purchasing of food from the primary market, the demand for food shrinks, less goes to landfill and it frees up a lot of resources that go into making the food.”
“A quarter of the world’s water supply is used for food that is never eaten,” she adds. “If we free these resources to do something productive for humanity, we could end world hunger.”
Saasha is one of 200 change-makers that I have interviewed for my book, Generation Share, published for this year’s Global Sharing Week (16-22 June). Three years ago, I set out on a journey around the world with book co-creator and photographer Sophie Sheinwald, to meet the people behind the phenomenon known as the Sharing Economy. Despite having worked as an expert in this field since its inception, nothing could have prepared me for what I discovered.
Much has already been written about the economic value of the Sharing Economy, which is estimated at over $2tn globally, with over $24bn invested since 2010. But as my decade-long voyage in this sector has taught me, the social and environmental value being created has far greater global significance.
What is the Sharing Economy?
The term itself emerged a decade ago from the global crisis of 2008-9 and the realisation that we all need to do more with less. Its birth demonstrated that necessity is often the best mother of invention. Fuelled by technology that was able to connect the people with spare or idle resources to those who needed them, the term became associated with new types of person-to-person online marketplaces like Airbnb.
In reality, the Sharing Economy is much more than a collection of new types of Silicon Valley-backed ventures. It is wide reaching and it’s changing society as we know it. It is both an economic system built around the sharing of human and physical resources as well as a mind-set. I define it:
A Sharing Economy is a system to live by where we care for people and the planet and we share available resources, however we can.
What does sharing mean?
The Sharing Economy is a hybrid economy with different forms of value exchange and does not mean that goods and services are necessarily free of charge. When we lend, borrow, swap, exchange, rent, collaborate, use peer-to-peer, co-create, recycle, buy vintage or reuse, these are all different types of sharing. In the case of renting, people are accessing a shared resource, rather than individually owning it.
There are a range of different terms used, such as collaborative economy, collective purchasing, circular economy, collaborative consumption, gig economy and peer-to-peer economy. All of these terms come under the broad umbrella of the Sharing Economy and are subsets of the wider Sharing Economy.
The five parts of the Sharing Economy
What we share. This incorporates both tangible and intangible assets, such as homes, goods, food, transport and jobs in addition to more abstract things like ingenuity, skills, time, power, knowledge, opportunities and responsibility.
These make up the broad spectrum of the Sharing Economy. This includes cooperatives, crowdfunding, social enterprise, volunteering, philanthropy, fair trade, micro finance, alternative currencies, gig economy, mentoring and citizen innovation.
How the sharing happens. Resources can be borrowed, swapped, exchanged, rented, repaired, recycled, collaborated on, shared peer-to-peer, co-created, co-operated and crowdsourced.
4) Characteristics and values
What are the main features, principles and qualities of the economy? Is it sustainable, transparent, inclusive, positive, circular, fair and compassionate?
Why we share. This is the social impact created by sharing the planet’s and humanity’s resources – poverty reduction, social mobility, environmental protection, equality, community, wellbeing, overall social cohesion and sustainability.
Principles of the Sharing Economy
Sharing promotes access over ownership, enabling people to access what they need, when they need it, rather than owning goods which are rarely used. Many businesses in the Sharing Economy operate service models, where users can rent or access goods on demand.
The Sharing Economy is also a mindset that promotes the principles of trust, transparency, community and collaboration, where the needs of people and planet are centre stage. Sharing Economy models deliver tri-part value – economic, social and environmental – creating world-changing social impact.
How does this affect business?
Clare Kandola is a Sharing Economy business expert and trustee of The People Who Share charity, which I founded. She says, “social businesses, crowdsourced, peer-to-peer production and a new type of conscious, caring consumption are on the rise. With these, the traditional approach to business-as-usual heralds the death knell for those unwilling to see the realities of the future.”
The Sharing Economy is one of history’s biggest business trends and has changed the way businesses work. It has spawned new business models, based on accessing shared goods, rather than owning them, but it has also created a new mindset.
By putting sharing and access at the centre of businesses, we can unlock value for the economy, people and planet. The Sharing Economy empowers people and communities to create, connect, collaborate, thrive, trade, swap, access and share goods, services, skills and knowledge between themselves. It recognises social, economic and environmental value, which are all costed and counted. People are no longer reliant on corporations for products and services, now they can trade peer-to-peer.
Collaborative advantage and a sustainable future
One study found that 90 per cent of consumers want brands to share, yet according to Deloitte’s Meaningful Brands report, only 10 per cent of brands are seen as doing so. People want and expect to be part of the process and to create value for society. In the last three years, we’ve seen the rise of conscious consumption. People want to know who made their goods, where they came from and whether those who made them have been fairly paid. This ‘voting with your wallet’ approach means that sharing is now an expected mode of doing business.
Companies need what I call a ‘Collaborative Advantage’, since how much and how well they share will determine their businesses’ future success. As a 2016 Deloitte study showed, companies adopting the Sharing Economy can double their revenues in a year. This not only future-proofs their business, it also proves that the Sharing Economy isn’t simply some kind of ‘nice-to-have’ bolt-on or an opportunity to turn costs into revenue. It’s becoming essential for business survival.
As Claire Kandola explains, “We are at the end of cheap, easily available resources. The Sharing Economy is about sustainable futures and offers an opportunity for businesses and all organisations to rethink their structures as well as their relationships with their workers, investors, partners and competitors. Growing into the future means finding other definitions of value and business objectives.”
“I question any organisation that does not have some interest in sustainability and social impact in a world of diminishing resources and greater inequality. Organisations are increasingly impacted by the technological revolution, changing working practices and increased costs of core resources. It is no longer acceptable to create only economic value. They need to be creating social and environmental value to survive and the Sharing Economy is a way to do just that.”
Can big business save the world?
We are entering a new business era where 65 per cent of companies now rate ‘inclusive growth’ as one of their top three goals, and 77 per cent of businesses rate ‘citizenship and social impact’ critical or important.
Underlying this approach is the realisation that complex global problems need radical, systemic strategies, as well as a complete rethink of the top-down, winner-takes-all, profit-before-people tactics that have dominated until now. Given that the world’s largest companies make more money than most countries, it seems that if businesses can become what I call ‘change-maker brands’ and forces for good, they could change the world.
As my journey to meet social entrepreneurs and change-makers has shown me, these new businesses are applying innovations in sharing and ShareTech to help deal with pressing global problems such as world hunger and climate change.
Helping the homeless
Alex Stephany is the founder of Beam, the world’s first crowdfunding platform that helps to fund employment training opportunities for homeless people. “I met a homeless man on the steps of my local train station next to a stack of newspapers,” he recalls. “He told me what it felt like to be locked out of the world and not be able to read. I wanted to take a small amount of money and make a long-term investment in his future, but I needed an organisation that could combine my £2 with your £5, and help that individual thrive.”
“That organisation didn’t exist so we started it. Beam is about making it safe and easy to help homeless people. The big vision is to unleash the talents of the more than 300,000 homeless in the UK, empowering them to ‘be amazing’, to make the best contribution to society and the economy. It’s the collective responsibility of coming together to make a difference.”
“We’re not a typical crowdfunding platform, since we provide two sources of value: financial and social. Donations are divided equally between members on a one-off or monthly basis. We also build a support network of people who come to the website, read someone’s story and want to help. For people who have been homeless for decades, with chronic lack of self-esteem, this is transformative.”
How It Should Be
Ruth Anslow, her sister Amy, and Jack Simmonds are the Founders of HISBE, a social enterprise supermarket that’s based on sharing, community and sustainable principles. I spoke to Ruth for Generation Share about how HISBE came to be.
“We’ve built an alternative supermarket model through collaboration and caring,” she told me. “We got fed up with the way supermarkets do business. It has a negative effect on people, communities and local economies. It’s the opposite of sharing. We’re about keeping profits in communities and in the hands of the producers. Our big vision is to transform the food industry by reinventing the way supermarkets do business.”
“We are called HISBE, which stands for How It Should Be. We started with a set of values and a vision of how a supermarket should be. We created a sourcing policy that would contribute to a fairer, more ethical food industry. We consider sharing in many different aspects of what we do, from the way we source and present products, the range – which we build through collaboration with customers – and how we are funded through crowdfunding. This business only exists because hundreds of people have helped us build it.”
“We help a lot of small suppliers get going by sharing the profit with them, so for every pound that gets spent in HISBE, 68p goes to suppliers. The equivalent figure in supermarkets is 9p. If they’re given the right price and the right conditions, they can make the products that contribute to a better food system.”
“At the tills, you can see a pie chart breakdown of how much money has gone to the supplier, store, staff bills and how much profit we make. We deliberately undercharge on many areas of the shop because by testing an offer that hits the average income level, we are going to make stuff mainstream. So we collaborate with our customers because their purchasing power is what creates the industry. They’re voting for our sausages, not Sainsbury’s,” she adds.
A new concept of wealth
What’s clear from my journey around the world to meet the people behind the phenomenon that is causing the biggest shift in society since the Industrial Revolution is that all value – social, economic and environmental – is being recognised as the wealth underpinning our economy. These values need to be enshrined in the corporate culture of big business as the benefit is survival.
This is no longer about the future of work, it’s about the future of humanity and ensuring that in this increasingly populated world, there is space for all of us to thrive and succeed. Big businesses who can see the opportunity, who can embrace this brave new business world and share the effort to support more than just their company’s bottom line, will survive and thrive.
It’s an investment of hope and faith in the future. The payback of sharing and investing now is that you will not only survive in the future but you will also have helped to build a strong community and contributed to a healthier, more sustainable Sharing Economy as a whole.
Benita Matofska’s book, Generation Share, is available now.
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