Seven Challenges for the Collaborative Economy

What are the true spirit and values of the collaborative economy? If this does not become clear soon, then words like “collaborative” and “sharing” will lose their meaning, says Anne-Sophie Novel.

During Ouishare Fest I had the opportunity to give a talk on the words, meanings and issues of the collaborative economy. As you know, the right questions are more important than the right answers, and so I’d like to share my questions here on with you.

I’ve been following the development of the collaborative economy since 2009, and my feeling today is that we are entering an age of maturity. While increasing visibility is still a priority, the collaborative economy faces several challenges, and this raises some questions.

Understand your audience

To me, the first challenge is to understand the audience of the collaborative economy. Studies show that sharing is an emerging consumption habit, and that people who share are more driven by economic benefits than by collective motivations. This is not a trend against traditional consumption — most of these people are just looking for good deals and ways to earn money.

It has been proven that 52% of the population, in France and in the US, wants to change its consumption habits. A full 83% of the French population feels usage is more important than ownership, but only 19% of them have already tried to rent what they need (Obsoco, November 2012)

A study made by French survey institute IPSOS and the Government Agency ADEME recently showed that 60% of French people use second hand markets and 37% of them use group purchasing. Less than 10% of the population engages in bartering and ridesharing. Collaborative consumption is more developed among young people, but it also spans across other segments of the population.

This means collaborative consumption can suit everyone for various reasons, and the fact that we have no word to name the people who share just reflects the diversity of these emerging consumption habits.

So the question is: do we need a common name for these people to recognize each other? Or do we need to better define the collaborative economy in order to improve its promotion?

Try to solve a problem

I ask about defining who the sharing population is because of my second point: it’s necessary to promote this economy more largely. Except for Airbnb, Zipcar, Blablacar and some other success stories, many startup businesses are just fighting to survive and reach a critical mass of users.  Moreover, some ideas are really nice in theory, but not that useful in practice.

Adam Berk, who founded and recently put an end to neigh*borrow in the US, recently said on Pandodaily that sharing is not enough: he advises young entrepreneurs to try to solve a problem, to rapidly test their idea in their surroundings (“If you can’t find 10 persons to use your product, you can’t find 100” he says), not to reinvent the wheel, and admit that sometimes an idea simply does not work.

Neal Gorenflo, founder of Shareable, also explains that the money coming from venture capital simply changes the spirit of the collaborative economy. But what is the true spirit of the collaborative economy? And if people are willing to participate but do not actually do so, how can we find ways to convince people more broadly?

Define your values

And this leads me to the third challenge: values. The collaborative economy consists of different developments such as collaborative lifestyles, redistribution markets, barter, co-construction habits, crowdfunding, etc. Depending on your business model, you can make a profit or not – but does this movement have any clear claim or statement?

For some people, it’s a catch-all term and it’s perhaps risky for it not to be more specific.

Simplicity, transparency, community, and participation are often cited as being the foundation of the collaborative economy. Authenticity, sustainability, co-creation, and social efficiency are some of its core values. But are these terms specific enough for people to grasp what the collaborative economy is about?

What’s more, not all startup businesses share these values. So what are the TRUE values of this economy? If we don’t make this clear enough, then words like “collaborative” and “sharing” will soon lose their meaning.

Look at the giants

Fourth: let’s look to well-known speakers and analysts on the collaborative economy. Rachel Botsman and Lisa Gansky have clearly defined the main rules of the collaborative economy, but there are others. Jeremy Rikfin is known for his books on empathy and the third industrial revolution. Bernard Stiegler, French philosopher, prefers speaking about a contributive economy, while Chris Anderson and Joël de Rosnay underline the importance of the makers’ movement. And Yochai Benkler speaks about the “networked information economy” to describe a “system of production, distribution, and consumption” based on open source, decentralization, and non-market strategy.

In the end, the collaborative economy is in the middle of all these contributions, made up of thousands of innovations — some for profit, some non-profit — and some that thrive in the commons… Does this mean that the future of the economy will be collaborative?

Look to the cooperative economy

If we accept this idea, it’s important not to reinvent the wheel! At the end of the 1880s some workers had already built the foundations of a cooperative economy, and now we often forget that more than 800 million people worldwide are members of some form of cooperative. This economy is still causing debates over whether traditional approaches are better than the one offered by the American approach of social entrepreneurship. All in all, it is never easy, but I do believe that

the collaborative economy needs to learn from the history of cooperative systems to distinguish itself more clearly from the “mainstream” economy.

Help promote a greener economy

Have you seen how often ecological arguments are presented in the collaborative economy? My interest in these issues is directly linked to the capacity of the collaborative economy to build a better world for the next generations.

There are some figures to demonstrate the environmental impact of the collaborative economy. For example, every shared car replaces up to fifteen owned cars — sharing reduces waste, it counter acts planned obsolescence, it promotes local economies, and more.

But these are the consequences! What if these solutions were made to directly serve green purposes? What if the collaborative economy decided to more strongly defend a green economy? Wouldn’t that make the connection between sharing and the environment much clearer?

As Neal Gorenflo recently said in a OuiShare discussion group, “we expect that these tech driven solutions could become part of, if not lead, a larger movement of social and economic transformation.” It is necessary to always keep in mind this larger goal, and to include it in the vision of the collaborative economy.

Work together

Now that venture capitalists and other investors are beginning to invest their money in young start-ups, it is important to protect the movement’s core values — if we can define them. Should we defend the people’s benefits or the stakeholders’ benefits? Is there more collaboration than we would expect among collaborative economy startups?

If we are just focused on technological innovation, and suffer from the possible counterproductive influence of venture capital investment, I don’t give the future of the collaborative economy much of a chance.

All in all, you see, it’s the economy, stupid! But it can be much more than that, and I would be pleased to hear if you might have some answers to my questions!

Guest post written by Anne-Sophie Novel.

CoRévolutionnaire dans l’âme, je suis économiste de formation, écolo par conviction, blogueuse par passion et journaliste de profession. Je suis l’auteure de Vive la CoRévolution (mai 2012) et La Vie Share (mai 2013) paru chez Alternatives.

Picture credit: PaternitéPas d'utilisation commercialePartage selon les Conditions Initiales Gayané Adourian