What is Mine is Yours: Millennials and the Sharing Economy

By
Hernaldo Turrillo
Millennials and the Dawn of the Crowd-based Capitalism

The disruption brought by new digital-based platforms has redesigned the long-run balance between the different agents and assets that take part in economic transactions of all types. Welcome to the collaborative economy,  where sharing, trusting and producing are key factors!

As a matter of fact, the new economic paradigm is simply evolution. New technology developments are opening up spaces and opportunities that were unreachable before. And while communication channels start to become uncontrolled,  more people are making use of them, allowing them to expand both their personal interests along with their professional careers and money opportunities.

The technology breakthrough of recent times, is what explains the change of the economic paradigm, and the beginning of the dawn of the previous one. To question the status quo is thus inevitable and blindly following a very unfair business system has become a sort of no no for Millennials, who see the world as a big and open playground.

The breeding ground for a new economic alternative also implies how the future looks like. Robotisation and high AI development along with ever growing levels of university graduates are also challenging millions of jobs in the upcoming times. Collectively, there are real concerns about professional careers. It seems likely that being in a company for dozens of years isn’t an option any more, while fragmentation and entrepreneurship would be the best shot for newly graduate generations.

All of this leaves us  leads us to a present where attritional battles between the old and the new occur everywhere. Anyway, what is coming seems strong enough to be able to step onto the established model, since it has the crowd support,  which is a key attribute, of this new economic paradigm based on people and new business models.

Arun Sundararajan is an author and academic studying the Sharing Economy and a Professor of Information, Operations and Management Sciences at the NYU Stern School of Busines  who has researched , the collaborative economy and how crowd-based capitalism is changing the Economy: He says:

“Unlike 19th and early 20th century evolutions, today’s technological shifts are steering us away from managerial capitalism and towards what many see as a more crowd-based iteration. Traditional hierarchical organisations and large, well-staffed companies that create goods and services are in decline.

An alternative model is ascendant, one in which products are distributed not by a firm, but by a heterogeneous crowd. This economic structure blurs the lines between the personal and professional and between casual labour and full-time work.”

This allows the crowd, or peers as it is more accurate in digital terms, to be at the very centre of the economic power, and to generate richness and opportunities in different manners. This sharing economy also provides users – both consumers and workers – to create communal value through capitalising on their individual assets or resource, typically through using online platforms to enable access to goods or services.

The platforms within the Sharing Economy will indeed revolutionise the economic system as these models lead to higher economic growth and more variety in products and services, which in turn spur greater consumption… of what is out there to be used, which promotes sustainability. The sharing economy constitutes a new way of organising economic activity, and the model has expanded over the last five years and will continue to do so.

The Trust within the Sharing Economy

In this new crowd-based economy, trust is at the centre of all assets. Whether if it is sharing a room in your own house to unknown guests through Airbnb or a seat in your car in BlaBlaCar, the common denominator is trust. Though the sharing economy evolved out of the digital revolution, trust lies at the heart of the model. And the concept of trust is evolving with the technology, according to Sundararajan.

“When we understand the evolution of trust we understand the evolution of business. Rather than conventional handshakes and signatures, today trust develops from ‘digital cues’ — online information about individuals and organisations that we process and interpret to determine with whom to associate.”

Sundararajan then identifies several digital cues that help us gather enough online information to inform our decisions on who to trust. These include government, third-party, or brand certification; reviews of Facebook and LinkedIn profiles; and digital peer feedback through sites like Yelp, among others.

For this crowd-based economy to be fully operative, it will need the government involvement. Without a regulatory framework that protects new workers and users out of these platforms, unfair will rise and compromise the whole thing. And for that, Sundararajan expects more regulation rather than less, and recommends that governments partners with the new sharing companies whenever possible.

We are not just sharing in a new way, we are reshaping the very pillars of the economic system and society itself. We are, and quoting Mr. Sundararajan, funding a new social contract, a fairer and more inclusive one, where we all can be part of it and, more importantly, share it.

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