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An introduction to the collaborative economy

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At a recent Nesta breakfast about the collaborative economy, we heard from representatives from AirBnB, Spice, Tooley Street Research and the University of Southampton about how to measure the impact of the collaborative economy at local and national levels.

It is not the first time we have heard the phrase ‘collaborative economy’ at conferences, during a pub chat or in the papers. But what is the collaborative economy? 

The collaborative economy focuses on cutting out the middle man and distributing power and trust at the source: the community, the buyer/user and the seller/provider. It aims to maximise utility from a surplus good or service, such as a car or time, by converting it to money or exchanging it for something useful to the buyer/end user. Individuals can sell time by the hour or rent a car for a run to the outlet mall or read to an after school group in exchange for a gym pass. Collaborative economies, so the theory goes, intend to move away from personally owned things to collectively owned or shared things, harking back to the days when land was laid aside for community grazing and use.

Technology’s changed the ‘I need/you have/I have/you need’ equation, by encouraging a space for shared values (humanness, collaboration, transparency)while recasting the way we live, work and consume. Technology abets the growth of these shifts by making it affordable and efficient to unlock access to goods and services of social, communal, economic and environmental value. Previously, these goods and services lay dormant or were too difficult to extract for exchange value. The collaborative economy* comes in many forms, including:

  • Selling or giving away unwanted goods (such as eBay or Freecycle)
  • ‘Paying as you use’ for labour or products (such as Task Rabbit or Zipcar)
  • Decentralising services such as moneylending and business investment through peer-to-peer lending (such as Zopa or Crowdcube)
  • Maximising utilisation by renting a discrete unit of a surplus good or service, such as car downtime (e.g. Uber)
  • Sharing a good or service locally for reciprocal access elsewhere, such as a wireless connection (e.g. fon.com or guifi.net).

So how does the collaborative economy play out in the community landscape? The emerging models for a 21st century exchange see public and private services running up against each other in areas such as transportation (public transport and licensed cabs versus Uber and Zipcar) and shelter (local housing and council housing versus AirBnB and OneFineStay). How does this play out between state and private business? This is the one of the big unknowns, one for which the breakfast panel stimulated a few questions.

  1. Who regulates?
  2. How do we ensure quality control and avoid a race to the bottom?
  3. How do we ensure public safety?
  4. What is the employment status of those working in the collaborative economy?
  5. Is the loss in taxable incomings from individuals and businesses offset by lower demand on local government services?

For us, this leads to the obvious question: what does this have to do with Serco? With the continual pressure on councils to deliver more for less (or at least the same for less), the need to explore other ways of providing and administering services to citizens becomes ever more pressing. The idea of using the wider community to participate in the delivery of these services is being explored by many local authorities. The concept of leveraging a collaborative economy model to achieve this presents an interesting opportunity. It raises some compelling questions, including:

  1. How to get to the fundamental building blocks of a collaborative economy in place in relation to government services?
  2. How can we apply the models of time credit to government services while ensuring quality and upholding the duty of care owed to citizens?
  3. How can we use collaborative economy models of maximised utilisation to help local governments deliver needs-based, cost-effective services of higher quality?
  4. Fundamentally, is it a model that can sensibly be applied in the space of government service delivery? 

For Serco, it’s important that we stay at the forefront of these emerging concepts and frameworks. We must continually challenge ourselves in relation to how they may benefit our customers, our customers’ customers and, ultimately, the communities we work within. If you would like to discuss any of the above, please feel free to email me at: Nancy.Perlman@serco.com, or my colleague: Gavin.Sambles@serco.com

For a concise definition of Collaborative Economy subsections, see: Ouishare http://ouishare.net/en/about/collaborative_economy

 

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