We live in the Age of Accelerations. This is clear from my 20 years' experience working with clients, colleagues and business partners from across the world. As Thomas Friedman wrote in his 2016 book “Thank You For Being Late”, technology accelerations are rapidly changing global environments from policy, economics, social and environmental perspectives, both in the developing and developed worlds. And they are enabling what we call the Sharing Economy. This has a profound impact on people’s lives.
Digital technologies are disrupting traditional business models across virtually all sectors. Billions of people generate new digital connections daily on social media. Countless devices are connected through the Internet of Things. These connections produce massive amounts of data, which are turned into actionable insights by increasingly powerful analytics.
Five billion people can access these insights on their mobile devices to make informed decisions. They can choose the quickest route to work on a rainy day or locate the best coffee in their neighbourhood. Cloud computing ensures the information is delivered. Innovative and more secure ways to pay and get paid across all digital channels are making it easier to turn insight into action, from ordering a pizza to buying a train ticket with a simple tap of the finger.
A new global trend is emerging that takes us beyond ownership into experience. It is based on the ability to share. It is accelerated by all of the above and confirmed by our own data analysis. From cars to homes, people around the world are gaining new experiences without being encumbered by ownership. This is the Sharing Economy.
More than 190 million citizens in Europe alone have already made at least one transaction involving digital payments. The scale of such technologies means the Sharing Economy can offer unparalleled opportunities to generate new efficiencies and broader economic value from the excess capacity available in our societies.
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However, as my colleague and friend Robin Chase wrote in her 2015 book Peers.inc: “we need to create new social mechanisms to spread out the gains of the new platform economics” to all parts of society. This means those who are often excluded from accessing excess capacity, in categories such as food and housing, when they truly need it.
This is particularly true in the urban space. Cities have always been the cradle of economic and social opportunities. But both urban infrastructure gaps in rapidly urbanizing economies and infrastructure obsolescence in developed economies slow down global progress. These obstacles mean we are failing not only to lift many urban citizens out of poverty, but also to prevent many others from falling into it. As Robin says, we need to make sure that the benefits generated by the sharing economy are equally accessed by everyone, in every local community across a city.
Two recent publications come to mind here. Firstly, the Mastercard Center for Inclusive Growth recently donated data from Mastercard Retail Location Insights to New York University’s Center for Urban Science and Progress (CUSP).
CUSP researchers used the data to understand overall spend behaviour on the food industry near bike-sharing stations and to estimate the growth of local commercial activity near the bikes. The hypothesis was that people dropping off a bike might also drop in for a bite to eat, often at local neighborhood merchants. This proved to be the case.
The team also found similar results for the free Wi-Fi kiosks scattered throughout the city. As with bike-sharing, the researchers suspected that Wi-Fi kiosks help people, especially visitors, find local businesses. They found that within six months after a free Wi-Fi kiosk was installed, local retailers in the immediate area saw an overall bump in sales of two to three percent.
Secondly - and at a more strategic level - the World Economic Forum recently published a paper on The Sharing Economy in Cities. It gives a crisp account of the sharing economy foundations in the city, from global trends to main actors, from different operational approaches to their respective benefits, from data protection challenges to needed regulations. More importantly, it also provides a very well-documented list of key initiatives in cities across the world.
One particularly interesting initiative is taking place in Amsterdam, my own city. In order to spread the advantages of the sharing economy to those likely to be excluded - particularly senior citizens in low-income households - the city government connected all its sharing platforms into a City Pass, which citizens can get for free.
A meal-sharing platform enables City Pass holders to get a free or highly discounted meal from home cooks in their neighbourhoods. The city government is also organizing local community meet-ups to demonstrate new city sharing platforms, increasing usage and stimulating new local initiatives.
The sharing economy is accelerating significantly, while contributing to some of the most profound innovations in recent times. In order for this to continue, focus must remain on guaranteeing a consistent user experience for all levels of society, on improving trust and transparency in regulation and technology, and especially on allowing equitable access to the massive economic and social value being produced.