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The sharing economy (sometimes also referred to as the peer-to-peer economy, mesh, collaborative economy, collaborative consumption) is a socio-economic system built around the sharing of human and physical resources. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organisations. These systems take a variety of forms, often leveraging information technology to empower individuals, corporations, non-profits and government with information that enables distribution, sharing and reuse of excess capacity in goods and services. A common premise is that when information about goods is shared, the value of those goods may increase, for the business, for individuals, and for the community.
Collaborative consumption as a phenomenon is a class of economic arrangements in which participants share access to products or services, rather than having individual ownership. Often this model is enabled by technology and peer communities.
The collaborative consumption model is used in marketplaces such as eBay, Craigslist and Krrb, emerging sectors such as social lending, peer-to-peer accommodation, peer-to-peer travel experiences, peer-to-peer task assignments or travel advising, car sharing or commute-bus sharing.
The Mesh Economy is an economic model predicated on the sharing or meshing of talents, goods and services. This model is enabled by technology that makes connections between people, goods and services more efficient, resulting in new communities, organizations and business models for the public and private sector. Technologies such as mobile devices, social media, the Internet, networked communications, 3D printers and sensors allow individuals and organizations to directly share existing resources rather than wait for third-party businesses or governments to deliver the desired goods and services. These people-to-people or peer-to-peer models create a new opportunity for individuals, communities, governments and corporations to transact and collaborate. The Mesh economy was first articulated by Lisa Gansky in The Mesh: Why the Future of Business is Sharing.
- 1 Scope
- 2 Types of collaborative consumption
- 3 Origins
- 4 Structures
- 5 Guiding principles
- 6 Driving forces
- 7 Key organisations promoting the sharing economy
- 8 Category examples
- 9 Benefits of collaborative consumption
- 10 Criticism and controversies
- 11 See also
- 12 Notes and references
- 13 Further reading
- 14 External links
The sharing economy encompasses a wide range of structures including for-profit, non-profit, barter and co-operative structures. The sharing economy provides expanded access to products, services and talent beyond one to one or singular ownership, sometimes referred to as "disownership". Corporations, governments and individuals all actively participate as buyers, sellers, lenders or borrowers in these varied and evolving organizational structures. Share-based offerings are based on a set of values that often includes trust, transparency, economic empowerment, creative expression, authenticity, community resilience and human connection.
The Mesh economy encompasses public and private sector organizations and firms working within the various realms of the sharing economy, the peer economy, the collaborative economy and the circular economy. The shift from defining unused value as waste to defining it as an opportunity to create value from more efficient resource use is the common factor among all mesh economy organizations. This shift surfaces in two primary ways. First are new models for reusing the excess capacity of infrastructure, owned assets and talents available to the wider market through networks, community and technology-enabled platforms. The second approach seeks to redefine waste from something that we throw away to an opportunity for reuse and redistribution, which is a hallmark of the circular economy approach. These two approaches to unused value as a resource emerge in mesh economy models as a commitment to the design, development and distribution of products, services and information that supports sustainable resource use and strong, resilient communities.
Types of collaborative consumption
Product service systems
This system is based on users paying for the benefit of using a product without needing to own the product outright. Product service systems are disrupting traditional industries based on models of individual private ownership. Goods that are privately owned can be shared or rented peer-to-peer.
A system of collaborative consumption is based on used or pre-owned goods being passed on from someone who does not want them to someone who does want them. This is another alternative to the more common 'reduce, reuse, recycle, repair' methods of dealing with waste. In some markets, the goods may be free, as on Freecycle and Kashless. In others, the goods are swapped (as on thredUP and SwapTree) or sold for cash (as on eBay, craigslist, and uSell). There are a growing number of specialist marketplaces for preowned fashion items, including Copious, Vestiaire Collective, BuyMyWardrobe and Grand Circle
This system is based on people with similar needs or interests banding together to share and exchange less-tangible assets such as time, space, skills, and money.
The term "sharing economy" began to appear in the mid-2000s, as new business structures emerged inspired by enabling social technologies and an increasing sense of urgency around global population growth and resource depletion. One inspiration was the tragedy of the commons, which refers to the idea that when we all act solely in our self-interest, we deplete the shared resources we need for our own quality of life. The Harvard law professor, Yochai Benkler, one of the earliest proponents of open source software, posited that network technology could mitigate this issue through what he called 'commons-based peer production', a concept first articulated in 2002. Benkler then extended that analysis to "shareable goods" in Sharing Nicely: On Shareable goods and the emergence of sharing as a modality of economic production. Another thread of inspiration was the notion that linear systems of production and distribution are ultimately incompatible with the finite resources of our planet. Alternative approaches were becoming increasingly necessary, an issue voiced by Annie Leonard in her 2007 video The Story of Stuff. The power of shared social and economic activity to address worldwide resource depletion and create new models for the development of wealth and social value was popularized by Rachel Botsman and Roo Rogers in What’s Mine is Yours (2010), Lisa Gansky in The Mesh: Why the Future of Business is Sharing, in a global directory of sharing economy (mesh) businesses and organizations, the online magazine and community, Shareable.net., and The People Who Share  - the campaign to mainstream the Sharing Economy who run Global Sharing Day, reaching over 70 million people in 192 countries.
The term "collaborative consumption" was coined by Marcus Felson and Joe L. Spaeth in their paper “Community Structure and Collaborative Consumption: A routine activity approach" published in 1978 in the American Behavioral Scientist. The paper dealt with car-sharing. The term was used in more contemporary times by Ray Algar, a UK-based management consultant in an article entitled "Collaborative Consumption" in the Leisure Report Journal in 2007.
The concept has been championed by Rachel Botsman and Roo Rogers in their 2010 book What's Mine Is Yours: The Rise of Collaborative Consumption. In June 2010, ABC Television's Big Ideas programme included a segment showing Botsman's speech at the TEDx Sydney conference in 2010, describing collaborative consumption as "a new socio-economic 'big idea' promising a revolution in the way we consume". In 2011 Botsman described it as a social revolution that allows people to “create value out of shared and open resources in ways that balance personal self-interest with the good of the larger community.” At TEDGlobal2012 Botsman articulated that the concept of trust, across multiple platforms, would constitute the currency of a new collaborative economy, asserting that “reputation capital creates a massive positive disruption in who has power, influence and trust."
The realization that inefficient use of natural and human resources is creating environmental harms is a foundational inspiration for the mesh economy approach to resource redistribution. Within this larger insight, mesh economy influences are drawn from those thinkers who are seeking both to redefine waste and offer new approaches for resource use through product design and production and other market-based innovations. One important influence can be found in the work of William McDonough and Michael Braungart in their 2002 book Cradle to Cradle: Remaking the Way We Make Things. This holistic economic, industrial and social framework seeks to build efficient, waste-free systems that will enhance sustainability and reduce environmental harms. A second influence is found in work on biomimicry, an emerging discipline that seeks sustainable solutions by emulating nature’s designs and processes, as articulated by biologist Janine Baynus and her book Biomimicry: Innovation Inspired by Nature 
These approaches to sustainable design are supported by new approaches to economic systems as articulated by Paul Hawken, Hunter Lovins and Amory Lovins in their 1999 work Natural Capitalism: Creating the Next Industrial Revolution. In this work, the authors argue that we must create a clear link in our economic systems between the production and use of human-made capital and the maintenance and supply of natural capital. Information technology enabled systems and approaches form a final influence. Here the work of Manuel Castells and his seminal trilogy, The Information Age: Economy, Society and Culture is foundational. The understanding that information technology enables excess capacity in human capital to be more efficiently deployed to solve social and environmental challenges as articulated by Clay Shirky in his 2008 book, Here Comes Everybody: The Power of Organizing Without Organizations is also an important influence.
In 2011, collaborative consumption was named one of TIME Magazine's 10 ideas that will change the world. The financial crisis of 2007–2010 and subsequent housing bubbles have prompted consumers to reconnect through peer-to-peer marketplaces that turn underutilized assets and resources into new jobs, income streams and community networks. Napster pioneered peer-to-peer file sharing and subsequent platforms have emerged to facilitate the sharing of content, cars, bikes, tools and random household appliances.
Sharing economy business models emerge from our oldest instincts as humans -– cooperation, sharing, generosity, individual choice and flexibility. Models include renting, bartering, loaning, gifting, swapping and forms of shared ownership such as cooperative structures. Many of the most popular models are based on what is called a "two-sided market" which is a market where an information technology-enabled platform is developed, built and maintained by a third party but the function of the platform is to enable sharing economy activities. Most sharing economy structures are enabled by new technologies of connection. The most popular structures include:
In this model, individuals transact directly with other individuals on a two-sided marketplace platform maintained by a third party. In two-sided marketplaces, the development, maintenance and policies of the platform are maintained by the third party, which can be an organization, a business or a government. These are not strictly P2P systems in the technical sense as there is generally a central market platform that enables the transactions. Examples include Airbnb, JustShareIt, and Krrb.
These platforms allow people to share their expertise while making money. This new model flips the old model of education on its head, where a certified teacher/faculty is the only approved individual to teach others. In this new model, anyone can be a "mini-expert" in a certain area and share their knowledge with others. This floods the market with new, highly capable educators and decreases the price of education for all. Examples include italki, StudySoup and Udemy.
Government to business platforms
The movement at all levels of government – state, local and federal – to release open, machine-readable data sets is encouraging significant innovation around shared data.
Government to citizen platforms
Increasing demands from citizens for government transparency and collaboration are creating new democratic sharing models and structures. Some examples include the White House initiative on Open Government and the city of Oakland's Open Budget Project.
The guiding principles for mesh economy businesses and organizations revolve around efficient use of resources within communities of producers and consumers. In this context, mesh economy models are rethinking both cradle to grave production of goods and services as well as the social norms necessitated by shared and efficient resource utilization such as transparency, trust and open systems. The mesh economy shares many of these principles with other models and movements that seek to create more efficient and resilient communities and economies as we move into a period of increasing interconnectedness and global population growth.
Unused value is wasted value
Unused value refers to the time that products, services and talents lay idle. This idle time is wasted value that mesh models businesses and organizations utilize. The classic example is that the average car is unused 92% of the time. This wasted value has created a significant opportunity for share economy car solutions. There is also significant unused value in "wasted time" as articulated by Clay Shirky in his analysis of power of "crowds" connected by information technology. Many of us have unused capacity in the course of our day. With social media and information technology, we can easily donate small slivers of time to take care of simple tasks others need doing. Examples of these crowd sourced solutions include the for-profit Mechanical Turk and the non-profit Ushahidi.
Waste as food
We tend to think of waste as something we no longer want and need to discard. The challenge with this point of view is that much of what we define as waste still has value that, with proper design and distribution, can safely serve as "nutrients" for follow-on processes, unlocking new levels of value in increasingly scarce and expensive resources. One example is "heirloom design" as articulated by physicist and inventor Saul Griffith. Heirloom design refers to products designed to be repaired, upgraded, retooled and reused, potentially for generations. The notion of waste as "food" that can safely nurture natural and human-made processes is also foundational to the circular economy. This model focuses on cradle-to-grave design processes in the industrial economy that are restorative. In the circular economy, biological materials flow safely back into the biosphere while technical materials are designed to recirculate in the built ecosystem without reentering the biosphere.
Access not ownership
A key mesh model principle, attributed to Lisa Gansky, is that the value of a product or service can be uncoupled from its ownership. Many traditional business models are predicated on the growth of consumer markets through the selling of more products. In many cases, owning a product versus renting or borrowing it makes little difference to its value. Mesh model businesses and organizations build platforms and systems that enable people to access the goods and services they need, for the time period they need them, without requiring ownership. These models serve business to business, business to consumer, peer to peer and government to citizen communities and markets.
Transparent and open data
The mesh model is fundamentally based on network-enabled sharing of information. In some cases, this information is shared in order to enable access to shared and rented goods and services, such as AirBnB which enables people to share their homes for a fee, or Taskrabbit, which is a platform that enables people to rent their services directly to others in their community. In other cases, mesh model organizations are sharing information about product design, distribution, repair and re-purposing in order to unlock the unused value in a good or service. Many state, local and federal governments are also engaged in Open Data initiatives and projects such as data.gov and the London Data Store. In all cases, mesh model organizations and initiatives understand that the information they access and retain will be more valuable, and return more value to them, if it is transparently available to the larger community. Data shared in a network can over time become more valuable than the artifact it point to. Open and transparent access to information will enable greater innovation, more efficient use of products and services, and support resilient communities.
The Sharing Economy relies on the will of the users to share, but in order to make an exchange, users have to be trustworthy. Sharing economy organizations say they are committed to building and validating trusted relationships between members of their community, including producers, suppliers, customers or participants. Many mesh economy organizations collect significant amounts of information about the participants in their systems. Many also intermediate shared access to items of value such as homes, cars, offices, equipment and tools. Sharing in these contexts contains some social risk that must be re-mediated through the development of trust. Sharing economy organizations say they are working to develop reputation management systems as a means for building and maintaining trust within a community. Trust may be established by mesh model organizations through a continual commitment to learning, testing and engaging with the community they serve.
Urban density favors the mesh
According to the World Health Organization for the first time ever, a majority of the earth’s inhabitants live in cities. This move away from agriculture-based economies to economies based on “mass industry, technology, and service” is predicted to continue. By 2030, 6 out of every 10 people will live in a city, and by 2050, this proportion will increase to 7 out of 10 people. In the US today, eight out of ten Americans live in cities.
Cities, with their densely connected populations, are generally agreed by most economists and urban planners to be more efficient and productive than sparsely occupied areas. This trend toward urban connectivity creates an optimal environment for mesh businesses and organizations. Cities as platforms for sharing is emerging as a powerful concept heralded by many observers of the sharing or collaborative economy.
Cities as platforms for sharing is gaining traction in part through the open data and open gov movements, which have encouraged many cities to share data sets in areas such as transportation, health and sanitation information, and infrastructure. These data sets have led to a number of entrepreneurs to form businesses that serve the public good, such as SeeClickFix and OpenCity. These early efforts have set the stage for a host of city-based sharing services to emerge. Bike Sharing is now in 500 cities around the world, for example. Lisa Gansky, author of The Mesh: Why the Future of Business is Sharing and founder of Mesh Ventures, states, “Data is the gateway drug to the sharing economy. The larger shift is about bringing commerce and community together using mesh concepts, converting waste to value.”
The driving forces behind the rise of sharing economy organizations and businesses include:
- Information Technology and Social Media: A host of enabling technologies has reached the mainstream, making it easy for networks of people and organizations to transact directly. These include open data, the ubiquity and low-cost of mobile phones, and social media. These technologies dramatically reduce the friction of share-based business and organizational models.
- Population Growth: By 2050 there will be roughly 9.3 billion people in the world. According to the United Nations 64.1% and 85.9% of the developing and developed world respectively will be urbanized. The denser living arrangements afforded by cities offer more opportunity for sharing resources and services.
- Rising income inequality: Steven Strauss, a faculty member at Harvard University, has offered the hypothesis that rising income inequality is another driving force behind the growth of the sharing economy at least in the United States
- Increasing Global Crises (financial, environmental and social): The financial crisis of 2007- 2008  meant that unemployment and income insecurity became widespread across the developed world, forcing many people, organizations and governments to make do with less. In this period many sharing economy businesses, such as Airbnb, Zipcar, Kickstarter and Taskrabbit began to thrive. In addition, recent natural disasters, such as the Japanese earthquake and tsunami, the Chilean earthquake, Hurricane Sandy, and the 2012 US drought, have demonstrated that local issues have clear global impact, creating an increasing interest in more resilient social and economic structures. Finally, widespread social unrest as evidenced by the Arab Spring, Arab Winter  and the Occupy movement further underscore a period of rapid dislocation and change.
- Increasing Volatility in Cost of Natural Resources: Rising prosperity across the developing world coupled with population growth is putting greater strain on natural resources and has caused a spike in costs and market volatility. This has been increasing pressure on traditional manufactures to seek design, production and distribution alternatives that will stabilize costs and smooth projected expenditures. In this context, the circular economy approach has been gaining interest among many global corporate actors. While a handful of pioneering companies are leading the way, wider adoption will rely on mesh economy skills such as the collection and sharing of data, the spread of best practices and increased collaboration.
- The Growth of the Sharing Economy: In the past several years, the sharing economy has been growing at a steady rate. There are thousands of companies and organizations in all parts of the world that enable people to share and or rent, lend or gift goods, services, skills and information. Forbes estimates the revenue flowing through the share economy will surpass $3.5 billion in 2013 with growth exceeding 25%. The sharing economy is starting to significantly disrupt a number of mainstream industries, creating greater interest in mesh model organizations from all sectors of the economy.
Key organisations promoting the sharing economy
A number of organisations have emerged in recent years who seek to connect collaborators and mainstream sharing. Key among these are:
- The People Who Share: Founded by Benita Matofska in January 2011, The People Who Share is a UK-based non-for-profit whose mission is to mainstream the Sharing Economy. They run a global campaign to raise awareness and initiate action around the Sharing Economy: Global Sharing Day. In 2013 this campaign reached over 70 million people in 192 countries. In 2014 Global Sharing Day will be held on June 1.
- OuiShare: A French-based non-for-profit aiming to connect efforts within the Sharing or Collaborative Economy to create a global network of collaborators. Having started in France in 2012, they have spread to Europe, Latin America and the Middle East.
- Shareable: "Shareable is a nonprofit news, action and connection hub for the sharing transformation", and the primary global online magazine on the Sharing Economy.
- Collaborative Consumption.com: Founded by Rachel Botsman, after her book 'What's Mine is Yours' (2010), Collaborative Consumption.com has been growing as an online resource for collaborative consumption across the globe and as a network for the community within this space. They "curate news, content, events, jobs, studies and resources from key media outlets and industry blogs, as well as produce original content".
- The Mesh: Who hold a global directory of Sharing Economy Businesses and organised Mesh2013, a global gathering for the 'instigators' of the Sharing Economy.
- Echo (Economy of Hours): A UK based non-profit providing infrastructure to, and lobbying at national level on behalf of, local time banking projects. Echo develops systems for local projects to become part of national networks, aggregating offers and requests, and a commercial B2B model to provide long term sustainability to time banks. Echo has introduced non-profits, businesses and corporates to time banking as a legitimate way of doing business, with the aim of dissolving the distinction between the personal and the professional, resulting in a comprehensive marketplace without money.
- ProveTrust: A user reputation and trust scoring platform, facilitating the peer-to-peer interactions in the sharing economy.
- Real estate
- Algorithmic Regulation
- Book swapping
- Clothes swapping
- Club theory
- Gun sharing
- Fractional ownership
- Peer-to-peer renting
- Product service system
- Seed swap
- Time banks
- Virtual currency
Benefits of collaborative consumption
The benefits of collaborative consumption may include reducing carbon foot print by sharing transportation and assets, and saving costs by borrowing and recycling items.
Criticism and controversies
Salon and CounterPunch criticized the for-profit sector of the sharing economy, writing that sharing economy businesses "extract" profits from their given sector by "successfully [making] an end run around the existing costs of doing business" - taxes, regulations, and insurance. Salon further writes that "the sharing economy ... [is] not the Internet 'gift economy' as originally conceived, a utopia in which we all benefit from our voluntary contributions. It’s something quite different — the relentless co-optation of the gift economy by market capitalism. The sharing economy, as practiced by Silicon Valley, is a betrayal of the gift economy. The potlatch has been paved over, and replaced with a digital shopping mall." Susie Cagle wrote that the benefits big disruptive sharing economy players might be making for themselves are "not exactly" trickling down, and that the sharing economy "doesn’t build trust" because where it builds new connections, it often "replicates old patterns of privileged access for some, and denial for others."
New York Magazine wrote that sharing economy innovations such as bidirectional rating systems, background checks, frictionless payment systems, and platforms that encourage buyers and sellers to get to know each other face-to-face have made a difference, but that the for-profit sector of the sharing economy has succeeded in large part because the real economy has been struggling. Specifically, in the magazine's view, the sharing economy succeeds because of a depressed labor market, in which "lots of people are trying to fill holes in their income by monetizing their stuff and their labor in creative ways," and that in many cases, people join the sharing economy because they've recently lost a full-time job, including a few cases where the pricing structure of the sharing economy may have made their old jobs less profitable (e.g. full-time taxi drivers who may have switched to Lyft or Uber). The magazine writes that "In almost every case, what compels people to open up their homes and cars to complete strangers is money, not trust. ... Tools that help people trust in the kindness of strangers might be pushing hesitant sharing-economy participants over the threshold to adoption. But what's getting them to the threshold in the first place is a damaged economy, and harmful public policy that has forced millions of people to look to odd jobs for sustenance."
- Circular Economy
- Collaborative finance
- Collaborative innovation network
- Commons-based peer production
- Creative Commons
- Crowd funding
- Digital Collaboration
- Internet of Things
- Internet of Services
- Libertarian socialism
- Life cycle assessment
- Maker Faire
- Open Data
- Open Knowledge Foundation
- Open Source
- Participatory Democracy
- Peer-to-peer (meme)
- Peer-to-peer lending
- Radical transparency
- Regenerative design
- Reputation capital
- Reputation systems
- Social collaboration
- Social commerce
- Social dining
- Social Peer-to-Peer Processes
- Time banking
- Tragedy of the commons
- Two-sided market
Notes and references
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- From Mass to Mesh. Kevin Kelly, The Technium, April 8, 2011
- The Rise of Pre Commerce, Co-exist, Lisa Gansky
- A Policy Agenda for the Sharing Economy, The Urbanist, October 2012
- The Future is Sharing, Poptech, Lisa Gansky
- All Eyes on the Sharing Economy, The Economist, March 9, 2013
- The Twlight of the Sharing Economy—or the Dawn?, The Atlantic, May 7, 2013
- The New Sharing Economy, Survey
- The End of Ownership, Boston Magazine, May, 2013
- Share or Die: End of Ownership and Rise of the Sharing Economy, Weleet, December 2013
- Neal, Gorenflo. "Mesh2013: Socialstructing the Sharing Economy". Shareable.
- Kelly, Kevin. "From Mass to Mesh". The Technium.
- Leonard, Andrew (January 2012). "The Economy of Sharing". Sunset Magazine.
- Nanos, Janelle (May 2013). "The End of Ownership". Boston Magazine.
- Wang, Ray. "Monday’s Musings: Four Elements for A #SharingEconomy Biz Model In #MatrixCommerce". Software Insider.
- Freidman, Thomas (20 July 2013). "Welcome to the Sharing Economy". The New York Times.
- Rosenberg, Tina (5 June 2013). "It's Not Just Nice to Share, It's the Future". The New York Times.
|Look up sharing economy in Wiktionary, the free dictionary.|
- The Ellen Macarthur Foundation
- Sharing Economy: 'Plan B' For Moving America Forward TED Talk, 2011, Randy White
- Shareable - a leading news, action, and policy resource for the sharing movement
- Gansky, Lisa. "The future of business is the "mesh"". TED talk.
- Gansky, Lisa. "The Future is Sharing". PopTech.
- Gansky, Lisa. "The Rise of Pre-Commerce". Fast Company/Co-exist.
- Gansky, Lisa. "Is Your Business Meshy?". Rise to the Top; Podcast.
- Gansky, Lisa (August 25, 2011). "Do More, Own Less: A Grand Theory of the Sharing Economy". The Atlantic.
- Gansky, Lisa (September 9, 2010). "Consumers Will Share Everything". Forbes.
- Gunther, Mark. "The sharing economy and me". Mark Gunther.
- Leonard, Andrew; Jess Chamberlain (January 2013). "The Economy of Sharing". Sunset.
- "Lisa Gansky, The Mesh". The Startup Success Podcast.
- "Content Marketing Podcast Series: Interview with Lisa Gansky". Nimble.