Sharing economy refers to a common or communal economy that includes the production, consumption and use of commodities. Sharing economy is based on temporary access instead of ownership, by utilizing the development of technology and the popularity of social media, such as sharing platforms. Sharing space, goods and skills is guided by three principles of: 1) efficient use of resources, 2) crowdsourcing, and 3) communality.
Manufacturers, wholesalers and corporate suppliers consistently surprise the market when they enter industries and launch business ventures traditionally dominated by B2C. First, it was the concept of eCommerce, now expected to surpass the value of B2C online retail. Soon after, B2B began taking hold of social media, Big Data, wearable technology and, most recently, the on-demand mobile application market.
Now, experts say B2B is approaching its next frontier: the sharing economy.
At its core, the sharing economy is about a lack of true ownership, allowing goods, services and information to be shared between two or more individuals. It is fundamentally a P2P business model.
Today, however, the corporate advantages of the sharing economy are providing companies with resources that would have otherwise been far less accessible. From sharing data to sharing office space, the sharing economy is expanding as a B2B business model.
B2B sharing economy has grown from almost nothing to a pool of global businesses valued in the billions of dollars. The concept—people using technology to find and purchase one another’s extra resources—represents a triumph of trust and crowdsourcing. Peer-to-peer financial firms such as Lending Club, transportation services such as Uber, and lodging brokerages such as Airbnb have all rapidly taken off, using Internet-based platforms to connect people directly without highly paid intermediaries. It’s no wonder investors are so intrigued, and the rest of us are a little enervated by all the hype.
Sharing economy platforms and applications are already being used widely in the B2C markets, such as Über and Airbnb, but sharing economy solutions for the B2B markets still includes a lot of potential. The principles of sharing economy are being utilized in the B2B markets for instance by sharing machinery in agriculture and forestry. In addition, other tangible assets, such as equipment, raw materials, office space and warehouses can be shared between companies. Intangible shared assets include for instance companies’ brainpower, knowledge and intellectual capital.
The potential here is not just to garner ideas from outside inventors through open innovation. Nor is it to open up a platform for third-party developers to introduce ancillary products and software, as computer companies have done for decades. The real potential is for new platforms to evolve that offer a segment of a company’s intellectual property base to the world at large, so that others may do things with it, and the patent holder may profit.
In the current form of this relationship, the two parties collaborate to bring innovations to market. The Chinese appliance company Haier, for example, invites inventors from outside the company to propose innovations they could produce together. But collaboration might not always be necessary. A company with a patent for a new type of battery technology, for instance, might choose not to develop it, but by placing the battery technology on an exchange, the company could make a connection to another company with a complementary technology that would otherwise never have been made.
The sharing economy is built on a simple premise: People who have extra capacity can make money by selling it to other people who need it, without a middleman to siphon off much of the value. Within the past decade, several businesses based on this concept have sprouted up from nothing and turned into billion-dollar enterprises.