Is the Collaborative Economy the cure to the great recession?

By Lizzie

In 2011, The Time Magazine popularizes the collaborative economy as one of the ideas that will change the world. When I first heard about collaborative economy; I didn’t realize that I was already such a big user. As a young adult, those choices seemed obvious to me: cheaper and friendlier. Then, I have started to make an ideal of it. Finally, a world where it is not all about making money but making social bonding as well!!! Here are the questions I asked myself when I looked more into this new world.

What exactly is the collaborative economy? When did it start and what was the context? What are its values? What could be the future of collaborative economy? Eventually, is it an economic ideal?

Collaborative economy: what is that?

A wide definition of the collaborative economy would be as follows: « The result of transactions, sales deals or not, between providers and claimers; where all or part of the providers are individuals and not professionals’ contractors. Those transactions are made possible through an online technology; that we will call platforms. » (Translation of the article « Partager pour mieux consommer? », Valérie Peugeot, Jean-Samuel Beuscart, Anne-Sylvie Pharabod, Marie Trespeuch ; 2016)

I don’t know about you but for my part; I had a tendency to believe the same gimmick about collaborative economy. It is all about sharing, trusting each other and answering to social issues: the perfect exit door to Big Bad Capitalism. Well, in reality; I was mixing up 3 different concepts: the collaborative economy, the sharing economy (which is not the same thing) and the social and solidarity economy.

Let’s clarify this and find a proper definition to those models.

According to Rachel Botsman, noted author on the topic:

The collaborative economy is « an economic system that unlocks the value of underused assets through platforms that match ‘haves’ with ‘wants’ in ways that enable greater efficiency and access. » (Rachel Botsman, 2014)

Good examples :TaskRabbit, Bnbsitter

The sharing economy is « an economic system based on sharing underused assets or services, for free or for a fee, directly from individuals. » (Rachel Botsman, 2010–2012)

Good examples : Airbnb, BlablaCar

The Social and solidarity economy corresponds to any companies focusing their activities on the common good and an ethical distribution of the benefits. (Translation of the article « Partager pour mieux consommer? », Valérie Peugeot, Jean-Samuel Beuscart, Anne-Sylvie Pharabod, Marie Trespeuch ; 2016)

Good examples : TicketforChange, Emmaüs

The 3 elements that described the best the collaborative and sharing economy are: instantaneousness, massification and little expenses. The models became possible thanks to the technological and digital innovations.

Are the collaborative and sharing economies some natural answers to the technological and digital evolution? Or, is there a more precise context in which those economic systems became a necessity?

The collaborative economy: an answer to the recession?

Indeed, the technological and digital innovations contribute to the arising of a “We-culture”; where it is not only our consumption but how we consume it that changes. The first businesses in the collaborative economy appeared in 2000 in this same context. The current fear of the tragedy of the common goods (« economic problem in which every individual tries to reap the greatest benefit from a given resource ») due to the financial crisis and the increasing scarcity of resources explains also the emerging of initiatives in the collaborative and sharing economy. As a 2013 article from The Economist underlines it ; « it is not a coincidence that many peer-to-peer rental firms were founded between 2008 and 2010 ». The collaborative economy seems to be a perfect answer to a fair resources allocation and a sharing society.

What were the philosophy and ambitions of the first initiatives in the collaborative economy?

If the motivation came from the fear of « the tragedy of the commons »; it’s aim was to bring a proper answer to the worldwide demographic explosion and the increasing scarcity of resources. The hope for this new economy was to improve the « community life » by engaging citizens together as actors of the society transformation. Now, that we recognize that the collaborative economy is not just a trend; people start asking themselves if it could become a true alternative to capitalism.

The collaborative economy: an economic ideal?

Well; this is a big question that will require another article to answer it! There are people who believe that the collaborative economy could replace capitalism for the better and others who believe that it is just the result of crisis; which appeared to heal and bind up the wounds of capitalism rather than replacing it.

What about you? What do you think?