The Next Wave of the Sharing Economy

Say goodbye to your grandmother’s sharing economy: there’s a new kid on the block, and he’s got brains.

The first wave of the sharing economy — which I’m limiting to paid marketplaces for this post — relied on a network of employees to perform historically lower-wage jobs: driving, delivery, cleaning and furniture assembly. This wave also included a range of individuals looking to capitalize on existing assets, a home or car sitting unused. But as this economy has matured, we’re now moving from sharing basic skills and goods to sharing something else: expertise.

Marketplaces for highly skilled workers including Elance, oDesk and Udemy are ushering in a new wave of the sharing economy. How can we explain this new wave of growth? Technological evolution and underlying economic currents have shaped the entrance of skilled workers into the sharing economy fray.

Only a few years ago, streaming video online was a patchy and frustrating experience plagued by dreaded notifications of “buffering,” producing videos remained the domain of handheld cameras for most of America, and screen monitoring to effectively track hourly work was a dream. Udemy, eLance and oDesk’s expertise-sharing platforms depend on today’s bandwidth — with growth enabled by the rapid pace of technological change.

Additionally, this growth has been spurred by an increasing familiarity and comfort with the idea of peer-to-peer marketplaces. In 2006, the phrase “sharing economy” appeared four times in the New York Times. By 2013, the references grew by 500 percent, topping out a little over 2000 articles. Skilled workers who have had positive experience with Uber or Airbnb may well have started to ask, “how can I participate?”

At Udemy, for example, most instructors report the desire to share their knowledge is the chief motivator of teaching online, but the desire to make money is a very close second. In an economy in which, despite recent positive job growth, stagnant wages and high job insecurity persist, skilled workers, not unlike those driving Uber cabs at night, are asking — how can I get more career security? How can I take action to hedge my bets against uncertainty and make use of something I already have or know? In fact, more than one-third of the workforce, a number that’s doubled in the past five years, fear being laid off.

Those employed by large corporations have concurrently seen and been made aware of increased income inequality. Academics like Thomas Pikketty, activists with Occupy Wall Street and President Barack Obama, have pointed out the peril in an economy in which workers see a tiny fraction of profit relative to those on top. The sharing economy bucks this trend. As Arun Sundararajan, Professor of Information, Operations and Management Science at New York University, has pointed out, these privately owned marketplaces are sharing revenues between the customer and the worker much more equitably than major corporations. As such, this next wave of the sharing economy may be particularly attractive to those with the bug for entrepreneurship, but less of a stomach for the high risk that remains inherent in starting a business. According to Professor Sundararajan, entering the sharing economy offers similar autonomy with less risk.

This movement is just beginning. On Elance more than 3 million highly skilled freelancers — including web developers, software engineers, SEO experts — complete work for more than 1 million businesses around the world. Through TeachersPayTeachers, working classroom teachers are able to share their honed and effective lesson plans with peers, while getting compensated for their hard work. Twenty-one million lesson plans or products have been purchased by over 3 million users, netting teachers around the world $76 million. At Udemy over 10,000 individuals around the world are sharing their expertise with peers through self-paced online courses. Over four million students have enrolled in 10 million courses to learn practical and actionable skills from real-world practitioners.

The sharing economy enables us to rent houses from kind strangers and catch rides with fist-bumping new friends. We’ve seen the sharing economy upend traditional industries like transportation and hospitality and show strong signs of transforming others as well, including legal, medical and, yes, education. It’s time for the knowledge of skilled experts to be shared more broadly — the economic and social benefits of this next wave of sharing expertise will be immense.