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The Rise of the Shared Economy

Our parents always told us to share. Now the concept is far more than just proper etiquette. It is the foundation of an economic movement that continues to gain rapid momentum in the aftermath of the recession.

The idea of a shared economy is a social and economic system that enables shared access to goods, services, data and talent.  The power of the shared economy lies in its ability to increase efficiency while capitalizing on the power of current and emerging technologies.

Dominic Basulto’s recent Washington Post article summarizes it best:  “These sharing economy companies are going places where Adam Smith’s ‘invisible hand’ cannot. They are re-calibrating supply and demand, giving consumers access to otherwise unused capacity or idle assets. Instead of representing an entirely new underground economy, the companies of the sharing economy represent more of a supplement, adding capacity while driving down prices in ways that help consumers.”

This has occurred most notably in three ways: shared goods, shared ownership and shared problem solving:

Shared Goods

Zipcar, a car-sharing service that acts as an alternative to car ownership or rental, is one of the best-known examples of shared goods. But the idea of shared goods has not stopped there. Shared goods are moving beyond just products into a shared purchasing power for specific goods. This is evident through the growth of Community Supported Agriculture (CSAs) in urban centers. These CSAs enable consumers to act as shareholders and invest in a local (or near-ish) farm. Members then receive a monthly share of fruits and vegetables. Yet even this model is evolving—in the last six months, this model has begun to be applied to goods as well as food. For example, Brooklyn’s new CSA+D, Community Supported Art + Design, makes collecting art and supporting emerging artists and designers accessible to its shareholders.

Shared Ownership

Shared ownership is taking hold quickly. With crowd-funding platforms like Kickstarter and Indiegogo, where everyone has the ability to be an investor in a new project or company, ownership is no longer limited to something tangible. Personally, I have used these platforms to not only support great projects but to also feel involved with projects I believe in. Shared ownership has enabled me to be a producer on a movie, “Lemonade: Detroit,” and an investor in an album for a cool band, Gravity A, out of New Orleans.

Shared Problem Solving

Another interesting aspect of the shared economy is the emergence of using technology for shared problem solving. Cameron Sinclair’s Architecture for Humanity and Open Architecture app, another project I backed on Kickstarter, both focus on proactive social innovation and ideation to improve the lives of people globally. No longer is the goal only about how we can benefit ourselves but rather on what we can do to benefit the entire community.

As our ideas around consumption change, so do our ideas around the importance of goods. However, a bigger question exists: In an economy of sharing, how do purchase and consumption needs change? And how do businesses themselves adapt to meet this model?

One company that has truly tapped into the power of the shared economy to support its brand mission is Patagonia. Its partnership with eBay, the Common Threads Initiative, aims to reduce consumption and resource depletion by allowing shoppers to buy what’s already made and letting Patagonia, as the producer, sell what it no longer uses. Through its Worn Wear™ program, Patagonia helps consumers find a new home for the Patagonia clothing they no longer wear. Additionally, the company now buys back used (but in good condition) Patagonia shells, fleece, down and synthetic insulation, and ski and alpine pants. All of this is done with the mission of reducing environmental impact.

As this trend of collaborative sharing continues to expand, brands (and the planet) can only benefit by following Patagonia’s example. By authentically tying its products and services into the shared economy, the company is sure to enhance its authenticity and create legions of brand advocates. And, after all, we know sharing is good manners.

Judy Abel is the planning director at gyro New York.

Follow Judy @tuffyabel

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