The Future is here – it’s just not very evenly distributed, William Gibson once wrote. Hence, you need to know where and when to look in order to connect the dots and see the broader futuristic-turned-realistic picture. There were a few such opportunities for me to look into over the past year.
I believe that 2017 will be the year of the Sharing Economy 2.0, the Internet of People (IoP). My personal experience over 2016 gave me a lot of reasons to believe that would be the case, and I would like to share just a couple of them. Follow me on Twitter to catch-up with the rest, i will gladly do the same.
1. It’s “sharing” as in sharing opportunities, not as in sharing beer
It’s claimed that the term Sharing Economy originates from the open source movement to refer to peer-to-peer based sharing of access to goods and services. Having said that, it might be good to look to the free & open source software (FOSS) as to how its concept is explained – “free” as in freedom, not as in free beer. The same with sharing. Collaborative consumption is driven by the demand and the strive to optimize the resources that are in your possession, any spare/productive capacity. It’s about the opportunities unveiling with the help of different intermediary platforms, which are basically IT enabled two-sided markets. Sorting out the core principles/drivers of the Sharing Economy, such as the tendency to decrease transaction costs in addition to generally democratizing the marketplace, is an important milestone, which opens up opportunities for multiplication of best practices/pilots far beyond the services, property, transportation industries with things like AirBNB, Lyft, etc.
Next logical step would be to pick virtually any sector and figure out how to re-invent it in a meaningful, 21st-century way. Take education, as an example – universities (either though private or public funding) invest hundreds of millions in content, yet tend to keep it exclusive. The core service they offer might be exclusive by choise, but living in the knowledge economy, we can safely assume that it’s only a matter of time for projects, such as the Open Source University, to leverage information technology and empower individuals, corporations, nonprofits and governments with the platform and the information needed to enable the distribution, sharing and reuse of the excess capacity of knowledge products and services, while the concept of ‘wholesale’ Academia start to loose its relevance. Such a setup in the spirit of the Sharing Economy does not directly translate into ‘free higher education for all’, however it does mean significantly lowering the social cost of education through reduced transaction costs and new value, originating as an outcome of more efficient use of untapped/spare productive capacity. Not to mention the common premise that the value of goods increases when the information about them is widely distributed (either though online platforms or other means).
I had the opportunity to speak more on the subject during the annual gathering of the students’ unions in March 2016, where I was invited as a former Secretary General to present the opportunities which the Sharing Economy 2.0 holds for all Universities. The bottom line – knowing the real drivers of the Sharing Economy, knowing it’s about the unutilized opportunities, will help us draft the right kind of transformation charter for every business, every sector, industry. Going forward, getting disrupted will be a matter of choise, not a destiny.
2. It’s no longer peer-to-peer, it’s everything-to-everything
Arguable as it is, peer-to-peer was the common perception of the Sharing Economy 1.0., despite the fact an intermediary is almost always involved with a fee, charged on the intermediation. However, we now know that when the boundaries between different markets start to vanish, and unexpected kinds of competition occur, everyone and everything can start entering in the business of challenging incumbents, forming a technologically-driven community grid where “The Grid”, rather than the Peer is what you are primary driven to connect to (e.g. the blockchain).
Basically, it’s about upscaling and humanizing the concept of distributed and/or grid computing – a service for sharing computer power and data storage capacity over the Internet. Thanks to the advancement of the Internet of Things (IoT), we can tune our fridge to order fresh milk around the date of expiration of the milk box we already have, but how many of us know that we can connect our smartphones to Berkeley’s Open Infrastructure for Network Computing (BOINC) software platform and help advance cancer research or other important global humanitarian causes? Only through one of the projects – The IBM-powered World Community Grid, 3 billion research results have been processed by volunteers all over the world who are supporting basic science by donating unused computing time. This is what I call the “Internet of People” (IoP) and if we go back to the core of the Sharing Economy principles, we’ll see that’s its application is indeed demand driven, and is about tapping into spare productive capacity.
Shifting the focus from those and other similar not-for-profit projects, such as the science crowdfunding platform Experiment.com or Zooniverse.org – people powered research platform, and we’ll see the vast potential for monetizing IoP-based opportunities, which are following a more commercially-oriented agenda, apart from the examples provided (check out the exponential growth of the blockchain-based Bitcoin cryptocurrency as an example). I had the opportunity to brain-storm around this with the attendees of 2016 Sofia Business School Master Classes, leveraging the business model canvas approach and the examples mentioned above in the context of the Sharing Economy 2.o. The workshop presentation is available for you to have a look:
Right after my workshop, it was time for Prof. Leandar Litov to take the stage – the Head of the Atomic Physics Department at the University of Sofia & Head of the Bulgarian team of scientists at CERN. With CERN as one of the largest users of grid technology, it might have been a surprise for prof. Litov to find out that he’s now in a room full of associates, working on projects, related to the Large Hadron Collider, such as the ATLAS project, available for you to join through BOINC.
3. Institutions are becoming Uber-aware, if not yet Uber-friendly
In December, I was invited to take part in “Bulgaria 2030 – Youth Vision for Development” initiative of the President of Republic of Bulgaria, having previously served as an intern to the Administration of the President. I had the opportunity to share my thought in the area of energy innovation, more especially around a potential “Uber of Energy” – a topic we’ve previously discussed at Sofia Business School along with Carlo Stagnaro from the Istituto Bruno Leoni as a keynote speaker, who’s presentation on the effects of the Sharing Economy on innovation and economic development, as well as the regulatory challenges ahead, you can find here.
Having the opportunity to interact at the forum with a lot of open-minded young professionals, I came to the conclusion that we all share the common understanding that as industrial organization and structures change, regulation should change as well to support growth, instead of deepening the transformation issues along the way. They need to leave behind many of their long-held truths, because of the fast-changing environment. According to expert predictions robots might take over 30% of the job market by 2025, while nowadays this timespan might not be enough for a regulator to bring forward a mutually beneficial legislation around a single innovation that have rolled-out a few years back… Like it or not, this kind of reactive, close-minded approach is simply not doing any good. Regulation is based upon a specific understanding of the market , but as markets are created, changed, and substituted with a single click of a mouse, this understanding is no longer relevant.. Good news is that experts, such as Carlo, are already working with the EU institutions to prepare the legislative bodies for the next “Uber” and save everyone the aftermath.
Now, you may ask how all this regulatory issues (and trends) interlink with the Sharing Economy 2.0 and the Internet of People concepts.Well, with the job pool shrinking and becoming almost unbearable to catch up with, the improved use of any existing productive capacity will be crucial for success, as previously emphasized . Imagine you’ve equipped your home with renewable electricity installation, you’re an owner of a small Tesla storage facility and would like to sell power to your neighbor’s electric vehicle in need for a charge. All you’ll need would be smart meters, smart grids, and a platform – things that are either already available in one form or another, or are in a rapid development stage (thanks to innovative acceleration hubs, such as Cleantech in Bulgaria), contrary to the state of regulation around them. Because according to Bulgarian legislature, you would also need to get licensed as an energy merchant to execute this simple transaction…
Below is a link to a talk at Bloomberg TV Bulgaria I took part in soon after the President’s forum, in which you can hear more on the subject, especially in the context of another paradigm we need and should be speaking more – the Fourth Industrial Revolution that is behind both the initial Sharing Economy phenomena, and its evolution in perspective.
4. Instead of a conclusion
“If you want to know how things really work, study them as they’re coming apart”, wrote William Gibson in his Zero History. We had a lot to study in 2016, I am sure we’ll all agree… What we learned will definitely help – in the context of the next, iteratively improved version of the Sharing Economy. 2017 will also have its winners and loosers, but those are the risks of living in the dawn of the Fourth Industrial Revolution. At least we now know more about the rules of the new game, which is the most important prerequisite for more fair and rewarding play, for a race towards the top of human capabilities and aspirations, not towards the bottom of disrupted industries. Due to the experience gained over the past couple of years, we can assess what’s getting rewarded, what’s getting penalized – we know not only how things really work, but how things should actually work. Knowing more about the patterns we observe, we can better manage the change, despite the volatility will only increase.