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SharingEconomy

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SharingEconomy

  1. 1. THE SHARING ECONOMY F R A N K G A B R I E L H O C E S W U L F F M . S C E C O N O M I C S A N D B U S I N E S S A D M I NI S T R A T I O N
  2. 2. AGENDA 1. Introduction 2. Background (origins, disintegration, and the rise) 3. Theories (key models) 4. A ”mesh” business (sharing company) 5. Factors for participating in the Sharing Economy
  3. 3. 1. INTRODUCTION “…COLLABORATION AND SHARING HAVE BEEN AROUND SINCE THE BEGINNING OF CIVILIZATION… A TRADITION THAT CONTINUES TODAY… ALONE OR TOGETHE R, WE ARE HARD-WIRED TO SHARE” - OWYANG (2014) • TIME magazine (2011) accredited the “Sharing Economy” to be one of ten ideas that will change the world! • Hard to define, not matured into an economic system. However, – Sharing resources (tangible and intagible), time, space, skills, money – ”sharing the economy” (deleøkonomi) – System that dictates access over ownership (contrary to our traditional economic system) – Based on two market players, the provider/supplier (of the products) and the user/consumer (of the products) – Seeks to optimize underutilized assets (e.g. guitar, camara, car, lawnmover, trailer, boat, expensive clother, machines, etc.) and redistribute it elsewhere • Would othwerwise just collect dust – idling capacity • It has been estimated that roughly 80% of the items people own are used less than once in a month! • Have you ever questioned yourself how many hours they are unused, or for that sake used? Was it worth the purchase? How would you feel if you could access them whenever needed
  4. 4. • PwC estimates the Sharing Economy will become a US$ 335 billion industry by 2025 on a global scale, compared with the 2013 US$ 15 billion industry, hence referring to this as a “megatrend”
  5. 5. 2. BACKGROUND • Ex. Paleolithic ancestors gathered into tribes of twenty-five to one hundred people to collect plants and hunt wild animals. Subsequent to a kill, the meat was shared with everyone. Land and other resources were, likewise, equally shared. This “cooperative principle” keeps repeating itself throughout history – Took a more sophisticated turn  Romans viewed sharing as res publica (things set aside for public use, e.g. roads, library, parks and public facilities) and res communis (things common to all, e.g. water, nature, wildlife, even language and public knowledge – considered common heritage to mankind) “Clearly, sharing is a primitive concept. We've been bartering and cooperating since the beginning of time. If we didn't have money, we have traded time, meals, favors, or personal belongings, and many cultures still do the same” – TechRepublic
  6. 6. BUT…IN THE 21ST CENTURY 4 dominant forces were responsible for disintigrating the ”sharing” mindset, pushing us to become a (hyper)consumer 1. Power of Persuasion (Edward Bernays – ”father of PR” – ”the inventor of modern consumerism”) – manipulated the consumers’ psychology and emotions (e.g. got women to smoke, taboo before in time, invest in stocks, eat the ”traditional” eggs and bacon breakfast) 2. The buy now, pay later (the unafforable became ”affordable”  fuelled unhealthy spending habits) 3. The law of lifecyles (planned obsolescence and perceived obsolescence) – ensures repetitive purchases 4. The ”Just One More” factor (idiom: ”Keep up with the Joneses” now ”Call and Raise the Joneses” i.e. be better than your neighbour, certain competitiveness)
  7. 7. TODAY… The Sharing Economy catalysts: 1. Financial recession (change in standard of living – new consumer habits were formed) – Re-evaluate their relationship with ownership! – No coincidence many mesh startups were founded between 2008-2010 e.g. Airbnb, Car2Go, TaskRabbit, etc. 2. Population growth and urban density (pressurizing cities infrastructure, changing how community members interact with each other) – fertile ground for mesh businesses (easy access to resources) 3. Climate change and sustainability (finite resources, infinite demand)  S.E. a system that advocates to use resources more efficiently 4. Consumer distrust (especially towards global institutes, means people are more open for new business models, systems, brands and lifestyles) 5. The Internet and mobile technologies (today we are connected to more people than ever before) – social media helped to ”re-discover” our love for ”sharing” (e.g. pictures, comments, experiences, videos, etc.) “Collaborative Consumption is based on natural behavioral instincts around sharing and exchanging that have in fact been suppressed by hyper-consumerism but are innate to us, it has the potential to grow notably fast” – Botsman & Rogers (2010; 213)
  8. 8. 3. THEORETICAL FRAMEWORK Collaborative Consumption focuses on consuming goods and services (i.e. resources) – collaboratively  shared resources/economy 1. Product Service System The product is “shared” (e.g. Netflix or Car2Go) – We don’t want the DVD, but rather the movie it carries ( access economy) 2. Redistribution Market Think eBay, pre-owned goods are redistributed (sold on) - secondhand store too 3. Collaborative Lifestyle Similar interests and/or needs meet to share less- tangible assets (time, space, skills, money)  GoMore (carpooling), Airbnb (space), Gym “The shared use of a good or service by a group. Collaborative consumption differs from standard commercial consumption in that the cost of purchasing the good or service is not borne by one individual, but instead is divided across a larger group as the purchase price is recouped through renting or exchanging”
  9. 9. Is ownership really that smart?
  10. 10. • The Sharing Economy is growing, expanding and evolving – all fast! • MEGA-trend (PwC) • March 2016 • 2014: only 6 industries!
  11. 11. MESH ”SWEET SPOT” NOT EVERYTHING CAN BE SHARED IN THE SHARING ECONOMY! e.g. flashlight e.g. toothbrush e.g. smartphones e.g. cars Can be used for marketing campaigns e.g. SEM, Content Marketing, display ads, etc.
  12. 12. NOTE! • Why some people are resistant to share (US data) • Nordea (2014) found that 7 out of 10 Danes do not participate in the S.E. as it has not been relevant for them personalizati on
  13. 13. ”…resources which been digitalized can be shared, and once they are shareable they become accessible” - Nielsen (2015) - Digitalization is favorable/vital for the Sharing Economy  optimizes the idling capacity! Ex. A carpool ride uploaded on GoMore’s website (carpooling site) makes it accessible for others DIGITALIZATION
  14. 14. 4. CHARACTERISTICS – ”MESH” BUSINESSES (B2C) 1. Offer something ”shareable” (and preferrable durable – many people) 2. Internet and mobile tech are used to track and access these shareable products (e.g. Apps showing car proximity) 3. Focus on physical goods and services (due to the trust barrier) 4. Rely heavily on WOM and social networks NOTE: Mesh businesses may not satisfy all elements  strive in that direction ”In the future, we’re not going to sell a thousand BMWs. We’re going to sell one BMW a thousand times”
  15. 15. 5. FACTORS FOR PARTICIPATING IN THE SHARING ECONOMYDependents on the type of sharing services! (e.g. Airbnb hosts tend to be female, while GoMore drivers tend to be male) However, the 5 sharing motives: 1. Curiousness (products available) 2. Practical (subscribe when they needed X product) 3. Social (enjoyment from sharing, helping or being helped) – ”human relatedness” 4. Environmental (ironically, is less dominant – though, showing consideration for the scarce resources and climate change) 5. Financial (one of the most dominant forces, according to more than 50% of the
  16. 16. THANK YOU!

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