March 5th, 2013
New technologies and innovative business models are changing the way people consume and invest. What’s driving the shift from ownership to sharing? And what are the implications for manufacturing and regulation?
According to Lisa Gansky, author of The Mesh: Why the Future of Business Is Sharing, we spent the second half of the last century buying a lot of stuff and now we’re suffering from a stuff hangover. “We have far more things than we actually use as a global community. Last century we didn’t have the technology to, for example, track things that we can right now track.” Where we might have earlier rented a floor of a building, we can now rent a conference room for a few hours. She views the mobile phone as “kind of our remote control for moving around the world so we can find each other and things much easier.” She added that ready access to goods, services, and talent will triumph over ownership.
Andy Ruben, co-founder of Yerdle, said that the distribution services of the future are found in garages. “That wealth of things that we’ve been amassing for years could be put to better use.” He used the example of his daughter starting soccer; instead of buying shin guards, he got used ones as a gift from a friend who no longer needed them. “While we know a lot about the people we hang out with and go to school with and work with, we don’t know who is in need of a keyboard for their son’s piano lessons.” Technology has changed the dynamics of sharing.
Billy Parish, founder & president of Solar Mosaic, has opened up the ability for individuals to invest directly in clean energy projects. “Energy is the largest market in the world,” he said. “To get to 100% clean energy we need a hundred trillion dollars. Over the last couple years, we’ve only channeled $250 billion into clean energy.” And that’s been almost entirely with banks. “We’re unlocking the ability for individuals to participate in that asset class, to be energy owners, energy producers, not just energy consumers.”
One of the things that excites Rubin is that better models are now available through technology. “When they’re better, they make economic sense, they make social sense, they make emotional sense. They provide community. And at that point, the better models of commerce, better models of transportation—whatever they are—you don’t have to convince people to move to them. People experience the better model and they don’t go back.”
According to Gansky, 2010 was the first time in the history of our planet, since people started keeping records, that more than 50% of people were living in urban environments than in rural ones, and more people in the physical space invites less stuff. “We don’t want to have a less exciting life, so we’re trading things for experiences.” She said that research shows that the first time an individual might share a car or share a room on Airbnb, for example, is for financial reasons. “The general feedback is they continue to do it because they met cool people or they had a really nice experience.” She added a note about the need for new policies and regulations. “Things are changing very rapidly and the regulators are having a real challenge keeping up with what is a significant challenge to old thinking.”
Regarding regulation, Parish said that the regulations in energy were designed for fossil fuel energy sources “so there are all sorts of tax incentives and benefits for people to invest in pipelines or oil rigs and things like that. And the regulation around our financial industry was designed for banks.” His company is at intersection of those two industries. “Our challenge was to show the regulators that these investments we’re putting together are the same types of investments that banks have been investing in for decades. We just want to allow individuals to participate in investing in them as well. It took over a year to get approval of our model and we were really the first in that space to do that, so we had to break a lot of new ground.”
Gansky spoke about redefining economic growth. “GDP in my mind is measuring what was very relevant last century, spurred by the industrial revolution. “We made lots of stuff and counted making stuff, buying stuff, throwing stuff away and buying new stuff. And that’s the model that we have been trained on. What this is saying essentially is there’s a re-commerce, there’s a remanufacturing, there’s a repurchasing, there’s a reverse value chain.” She said that in our current model, waste has been subsidized and not measured. “In the future, the cost of waste, water, and energy is what’s really going super high. And so you’re going to start to see the true cost of waste coming through.”