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This document was originally prepared as a submission to Barcelona Consensus grant for innovative Socio-economic models and updated for wider distribution. It provides an overview of the Collaborative Consumption movement that has been gaining traction for the last two years. Apart of describing the basic characteristics and enablers of Collaborative Consumption, the areas of improvement and ideas for more widespread implementation are briefly exposed.
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This document has been prepared by Albert Caigueral Bag The author can be contacted via e-mail at
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Contents
1 BACKGROUND.................................................................................................................................. 4 2 COLLABORATIVE CONSUMPTION.................................................................................................. 6 2.1What is Collaborative Consumption................................................................................................................6
2.1.1DEFINITION................................................................................................................................................................... 6 2.1.2THE THREE SYSTEMS ....................................................................................................................................................6 2.1.3BUSINESS MODELS.......................................................................................................................................................... 7
2.2Why Collaborative Consumption makes sense................................................................................................8 3 KEY ASPECTS................................................................................................................................... 9 3.1Enablers for Collaborative Consumption.........................................................................................................9
3.1.1THE COMMONS............................................................................................................................................................. 9 3.1.2IDLE CAPACITY.............................................................................................................................................................. 9 3.1.3TECHNOLOGY, COMMUNITIES AND REPUTATION..................................................................................................................10
5 BIBLIOGRAPHY AND REFERENCES ............................................................................................ 16 5.1Selected bibliography.....................................................................................................................................16 5.2The Collaborative Consumption buzz............................................................................................................16 5.3Websites.........................................................................................................................................................17
5.3.1COLLABORATIVE CONSUMPTION MOVEMENT......................................................................................................................17 5.3.2COLLABORATIVE CONSUMPTION PROJECTS DIRECTORIES.......................................................................................................17 5.3.3LEGAL ASPECTS OF SHARING .........................................................................................................................................17
5.4References......................................................................................................................................................17
Illustration Index
Illustration 1: Screenshot of the Story of Stuff / Electronics video.....................................................................................................5 Illustration 2: Header image taken from Collaborative Consumption website...................................................................................5 Illustration 3: Extracted from "The Rise of Social Media and The Sharing Economy"......................................................................6 llustration 4: Three systems table. Source: Harvard Business Review article on CC.......................................................................8 Illustration 5: My own Couchsurfing experience: social, fun and saves money................................................................................9 Illustration 6: Photo from Micki Krimmel under Creative Commons license....................................................................................10 Illustration 7 from Latitude Research under Creative Commons License.......................................................................................11 Illustration 8: Couchsurfing references and friends.........................................................................................................................11 Illustration 9: Modular refrigerator for shared flats and Sobi Bike System. Source: http://bit.ly/fvNxZP ......................................13 Illustration 10: Electronics Take Back Coalition website.................................................................................................................13 Illustration 11: Tro-tro in northern Ghana.........................................................................................................................................15 Illustration 12: Java enabled phones in Asia. Slide from Oracle Webminar....................................................................................15 Illustration 13: Low-tech solution for Collaborative Consumption (from Candy Chang)..................................................................16
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1 Background
Someday we'll look back on the 20th century and wonder why we owned so much stuff. Not that it wasn't great at first. After thousands of years during which most human beings lived hand to mouth, in the 20th century the industrial economies of the West and eventually much of the rest of the world began churning out consumer goods. George W. Bush won re-election as President in 2004 in part by proclaiming an "ownership society": "The more ownership there is in America, the more vitality there is in America" 1 Ownership society, hyper-consumption and the design for the dump is simply unsustainable. A good explanation of all the implications of the current approach to consumption are the videos and documentation from Story of Stuff2
Good news are that the ownership society is being challenged in many fronts nowadays. Digitalization of media assets (photos, music, video, books) allowed people to experience that in most of the cases you do not want the physical CD but the music that is contained on it. With services like Spotify3 people have also realized that you do not need to own the music track that you will only listen few times. As long as you have access to it, you will be satisfied. This owner-less trend has been catalyzed and has been extended into the physical goods with the recent economic crisis as people were more aware of where they are spending their money with and what kind of returns (in terms of happiness) they are getting. More stuff is not more happiness. Collaborative Consumption, Sharing Economy or Access Economy are various of the terms used to describe this movement. Collaborative Consumption (coined by Ray Algar 4) is the most widely accepted term (in English and translations to other languages). It is sometimes abbreviated as CC. I will use this abbreviation on this document.
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Introduction to Collaborative Consumption Critics argue that CC movement based on sharing/lending/renting is not new at all and mostly a marketing buzz. Previous generations used to behave in more cooperative ways and had a stronger sense of community. Current generation of adults seem to have forgotten those values and society has adopted individual ownership as main purpose in life. For a lot of people you are what you own. We do care very deeply about our possessions and some people give their very lives to defend their possessions. The change is happening as the society embraces a culture of less compromise (as described by Zygmunt Bauman on his series of Liquid books 5). The stigma associated to words renting or sharing is quickly fading away. It is the young who are leading the way toward a different form of consumption, a Collaborative Consumption: renting, lending and even sharing goods instead of buying them.
Illustration 3: Extracted from "The Rise of Social Media and The Sharing Economy"
The rest of this document will provide details on how CC ideas are being organized and implemented in developed economies in relation to physical goods I (identifying the key factors and obstacles). I also try to provide a glimpse on how these concepts could be adapted to developing economies.
The trend is clear: access trumps possession. Access is better than ownership
(Kevin Kelly)6
I Part of this socio-economic and cultural change started with the digital assets but I consciously decided not
cover this area where companies such as Spotify (for music) or Netflix (video-on-demand) already provide very valid models.
Work licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.
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2 Collaborative Consumption
2.1 What is Collaborative Consumption
2.1.1 Definition
As a quick introduction to Collaborative Consumption (CC) check the videos available at Spreadables section of Collaborative Consumption Hub7 website. CC is defined as Traditional sharing, bartering, lending, trading, renting, gifting, and swapping redefined through technology and peer communities
In the words of Rachel Botsman and Roo Roger 8: We now live in a global village where we can mimic the exchanges that used to take place face-to-face but on a scale and in ways that never been possible before. The inherent efficiency of the Internet, combined with its ability to create trust between strangers, has created an unbound marketplace for efficient exchanges between producer and consumer, lender and borrower, and neighbor and neighbor, with no middlemen in between.
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Introduction to Collaborative Consumption 3) COLLABORATIVE LIFESTYLES It's not just physical goods that can be shared, swapped or bartered. People with similar interests are banding together to share and exchange less tangible assets such as time, space, skills, and money (e.g. social lending & person to person travel). These exchanges happen mostly on a local or neighborhood level, as people share working spaces (Citizen Space), gardens (Landshare), or parking spots (ParkatmyHouse). Collaborative lifestyle sharing happens on a global scale too, with P2P lending (Lending Club) and the rapidly growing P2P travel (Airbnb).
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Introduction to Collaborative Consumption There are additional source of revenue for the CC pioneers: to rent their technical solutions to smaller groups that can create closed networks. Zimride (share car rides) allows companies and universities to create their own closed networks by paying a subscription to use the platform. Neighborgoods groups allow to create your own group for US$6 a month. Therefore you can rent the solution to create your own CC project (allowing the movement to grow faster).
CC is social. The advent of social networking and the ease of sharing through online sites (eBay, Freecycle, etc.) have come together to make it simple and sensible to share ownership of items in todays society. We want to share with others in the 21st century. Additionally, we are increasingly defining ourselves by our social profiles and what we share rather than what we own. Its green. We save the earth by sharing our resources. Re-duce, Re-cycle, Re-use, Re-pair & Re-distribute are at the core of CC. Based on my personal experience, sharing is fun and feels good which explains why it is being so successful.
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3 Key aspects
3.1 Enablers for Collaborative Consumption
3.1.1 The Commons
The foundation of CC starts with the experience that people already have with The Commons 15 16. The use of the commons (streets, oceans, radio electric spectrum, etc.) tend to be a controversial subject. Garrett Hardin (1968) wrote that resources held in common would inevitably be ruined by individual self-interest and therefore needed forceful regulation. Humanity has begun to think differently about its commons and I can use a lot of resources under Creative Commons license to create this article. Once again, the digital experience has lead the way for people to understand how the community is enhanced when pictures (Flickr), knowledge (Wikipedia) or just ideas are shared. In return our own social value is increased. When these sharing experiences are transposed into other areas of our life we are creating the base for CC. If you are already sharing online you are more likely to share offline. From my personal experience (Spain/Taiwan and traveling to other regions) the sociocultural background has a huge impact on how people behave with the commons.
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Introduction to Collaborative Consumption According to a study on sharing 13 the items with more demand to be shared are transportation, infrequent-use items (specially the ones with a high barrier to ownership or a high burden of ownership) and physical spaces.
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Introduction to Collaborative Consumption Few quotes from The reputation economy18 article: A positive rating becomes equivalent to a first hand reference from someone weve never actually met, helping us make better decisions about whom to exchange or interact with Users will often go to great lengths to build and protect their reputations Users know people will see feedback left about them and that their behaviour will affect their ability to transact. Its the ancient power of word-of-mouth meeting the modern forces of the networked world. The first and most important reputation mechanism on Zimride is closed networks, which enable ride-sharing within specific communities, such as universities and companies Reputation capital is becoming so important that it will act as a secondary currency, one that claims you can trust me.
Apart from ownership, other legal aspects to consider are liability issues, insurance, property tax and products disposal, etc.
3.2.2 Critics
So far the CC movement is full of early adopters who are mostly unconditional supporters. In order to mature and refine, CC will benefit from the existence of serious critics to the thesis being proposed. Critics so far do not go deeply into the ideas confrontation. As Rachel Botsman mentions 20: Conservatives have mocked the book as a communist manifesto while liberals have ridiculed the book as a cynical sop to capitalism Critiquing an idea for not going far enough/too far that seems to me to be unhelpful because it serves only to consolidate the views of the converted and antagonize ideological adversaries
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Illustration 9: Modular refrigerator for shared flats and Sobi Bike System. Source: http://bit.ly/fvNxZP
Products also need to be ready to be taken back to their original manufacturer and to be repaired. Initiatives like Electronics Take Back Coalition21 or ISE22 exist. Business men like Ray Anderson 23 are giving examples on how this is actually a good business practice.
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4 Implementation strategies
4.1 Advanced economies
CC has been originated in and caters mostly advanced economies. Collaborative Consumption projects directories are growing fast and all these initiatives provide a lot of data to be researched on what are the keys for failure and success. Important aspects for any CC initiative include: Cultural aspects such as the trust in the commons can differ greatly among countries. CC involving people from different cultural backgrounds can be challenging, but multicultural cities are becoming the norm. The idle capacity that can be suitable for CC will also differ. In Europe there are initiatives around food sharing24 that are less likely to have the same success in USA. Start with a small group of highly engaged users that help to grown the community and to fine tune the operational and business model aspects, but initiatives like Couchsurfing only make sense at global scale. Local initiatives allow people to experience that regular people like them are active on CC. Support from local and regional institutions is highly desirable but not essential. Legal aspects might be the not easy to fix at small scale.
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It is important to identify which items, knowledge and services have idle capacity and can be shared: bicycles, photo cameras, pots&pans or even some of the teaching materials. Population density in cities can actually be a positive factor for some CC projects as long as it is balanced with idle capacity. Mobile phones are becoming affordable and widely deployed. MobileActive 26 or IEEE Webminars on Mobile Technology for the Developing World27 are great sources of examples on this field. CC projects can go hand by hand with some of these developments and use the idle capacity of the networks and terminals being put in place for other purposes.
Illustration 12: Java enabled phones in Asia. Slide from Oracle Webminar.
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Introduction to Collaborative Consumption On the other hand, technology might not be that crucial in small communities. Technology is a facilitator to meet demand/supply and to keep a reputation system. This is easily managed by low technology solutions in small communities. If you rent a bike from the church and you take it back broken, the whole community will know.
Illustration 13: Low-tech solution for Collaborative Consumption (from Candy Chang)
In any case is not technology or idle capacity that will allow CC to take off. Few key individuals committed to CC and the local community involvement are the most important factors for success.
4.2.3 Examples
CC can easily fall into the trap of sending all the stuff that developed economies do not use anymore to developing economies. This does not tackle the problems of hyper-consumption. News reported 28 that containers with computers often labeled as second hand goods (to bypass international laws) in reality carry as much as 80% of the equipment obsolete or broken. When carefully implemented a similar approach can won several awards, as Baisikeli 29 has done.
Baisikeli runs a bike rental business in Copenhagen that is promoted to tourists and local companies. In parallel, Baisikeli ships used bicycles (400,000 bikes are scraped annually in Denmark) to Africa where they are repaired or rebuilt and sold, and where the profit forms the foundation for the creation of a sustainable bicycle industry in Africa. I am sure that they will start a bike rental business in Africa pretty soon too.
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5.3 Websites
5.3.1 Collaborative Consumption movement
Collaborative Consumption Hub http://collaborativeconsumption.com/ including Shareable online magazine http://www.shareable.net/ . Non-profit online magazine which
explores how to design life, work, and community so that people can better share resources
Apply P2P concepts in various areas. http://www.openp2pdesign.org Access Trumps Ownership blog http://accesstrumpsownership.blogspot.com/ Reference blog in France http://consocollaborative.com/ Blog in Catalan http://www.consumcollaboratiu.com
5.4 References
1. Walsh, Bryan (2011, March) Time Magazine Special 10 Ideas That Will Change the World. Today's Smart Choice: Don't Own. Share available at March 2011 from http://www.time.com/time/specials/packages/article/0,28804,2059521_2059717_2059710,00.html 2. Leonard, Annie; Sachs, Joan, Fox, Louis (2010, November) Why 'designed for the dump' is toxic for the people and the planet available at March 2011 from http://storyofstuff.org/electronics/ 3. Visit http://www.spotify.com/int/about/what/ 4. Algar, Ray (2007, April). Leisure Report Journal. Collaborative Consumption available at March 2011 from http://www.oxygen-consulting.co.uk/docs/collaborative-consumption.pdf 5. Zygmunt Bauman books are listed at March 2011 from http://www.amazon.com/ZygmuntBauman/e/B000APS9V2 6. Kelly , Kevin (2009, January). Better Than Owning available at March 2011 from http://www.kk.org/thetechnium/archives/2009/01/better_than_own.php
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Introduction to Collaborative Consumption 7. Visit http://collaborativeconsumption.com/ 8. Botsman, Rachel; Rogers, Roo (2010, September). The Huffington Post. Goodbye HyperConsumption, Hello Collaborative Consumption available at March 2011 from http://www.huffingtonpost.com/rachel-botsman/goodbye-hyperconsumption-_b_716107.html 9. Botsman, Rachel (2010, September). Swiss-Miss. Collaborative Consumption: Reinventing not just what we consume but how we consume available at March 2011 from http://www.swissmiss.com/2010/09/guest-post-by-rachel-botsman.html 10. Botsman, Rachel; Rogers,Roo (2010, October). Hardvard Business Review. Beyond Zipcar: Collaborative Consumption available at March 2011 from http://hbr.org/2010/10/beyond-zipcarcollaborative-consumption/ar/1 11. Tunguz, Tomasz (2011, March). MIT Entrepreneurship Review. The New Market Places - Peer to Peer Collaborative Consumption available at March 2011 from http://miter.mit.edu/article/newmarket-places-peer-peer-collaborative-consumption 12. Drew (2011, March). Despite Improved Fleet Operations, Zipcar Reports Loss of $14.1M in 2010 available at March 2011 from http://accesstrumpsownership.blogspot.com/2011/03/despiteimproved-fleet-operations.html 13. Latitude Research in Collaboration with Shareable Magazine. The New Sharing Economy report summary available at March 2011 from http://latdsurvey.net/pdf/Sharing.pdf 14. Vercillo, Kathrynv (2010, December). 2011 Trend: Collaborative Consumption (Whats Mine is Yours) available at March 2011 from http://financialhighway.com/collaborative-consumption/ 15. Visit http://p2pfoundation.net/Commons_FAQ 16. Visit http://www.onthecommons.org/commons-101 17. Lapsley, John (2011, March). The future of (un)consumption available at March 2011 from http://www.mcgilldaily.com/2011/03/the-future-of-unconsumption-2/ 18. Botsman, Rachel (2010, November) The reputation economy available at March 2011 from http://www.collaborativeconsumption.com/blog-and-writings/Reputation%20Economy %20BOSS.pdf 19. Orsi , Janelle (2011, March) Shareable online magazine. Car Sharing Laws for Everyone available at March 2011 from http://www.shareable.net/blog/car-sharing-laws-for-everyone 20. Horning, Rob (2010, October) Flea-Market Ideology: A Review of Whats Mine Is Yours: The Rise of Collaborative Consumption available at March 2011 from http://www.generationbubble.com/2010/10/26/flea-market-ideology-a-review-of-whats-mine-isyours-the-rise-of-collaborative-consumption/ 21. Visit http://www.electronicstakeback.com 22. Visit http://www.iseappliances.co.uk 23.Anderson, Ray (2009, February). TED 2009. Ray Anderson on the business logic of sustainability available since April 2009 from http://www.ted.com/talks/ray_anderson_on_the_business_logic_of_sustainability.html 24. Visit http://www.super-marmite.com/ 25. Clinton, Lindsay (2010, November). Why the American Dream Doesn't Work in Developing Countries available at March 2011 from http://www.good.is/post/forget-the-american-dreamPage 18 of 19
Introduction to Collaborative Consumption collaborative-consumption-is-a-better-path-for-developing-countries/ 26. Visit http://www.mobileactive.org/ 27. Visit https://www.engineeringforchange.org/news/2011/03/18/ieee_humanitarian_technology_webinars_ now_on_youtube.html 28. Anonymous (2008, August). Poisoning the poor Electronic Waste in Ghana available at March 2011 from http://www.greenpeace.org/international/en/news/features/poisoning-the-poor-electroni/ 29. Visit http://www.baisikeli.dk/ // http://www.ideascompass.dk/en/howothersdoit/baisikeli // http://www.celebrateafrica.dk/index.php?cID=135
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