5 Things to Know: Networked Economy 101 (Collaborative, Circular or Sharing Economy)
We are facing a transition that many believe to be more impactful to our economy than the industrial revolution. It will transform the way we live and work, how business runs, and how society functions – and it will do this in a time frame that is radically shorter than any other major economic transition in history. This is the Networked Economy.
We are at the tip of the iceberg. So, what does it all mean?
1. Depending who you talk to, you might get a different answer. In very simple terms, the Networked Economy is the hyper connectivity between people, devices and business. Check out the world’s easiest-to-understand infographic for an illustration of the Networked Economy.
2. You don’t have to be a rocket scientist to understand it. Think of it in terms of five basic characteristics…
- Everything is digitized – like wearable’s, crops, and soccer balls where we monitor and track every move
- Everything is shared – think of how we book vacations, from cars to rooms to use only what we need and pay as we go for the time used and value received
- Everything is connected – it’s hard to imagine driver-less cars that are guided by connected devices. Every device, system and service we use is connected.
- Everything is direct – instead of having cable TV, we watch our favorite shows on Hulu or Netflix on demand to bypass the middle man
- Everything is personalized – getting tailored products or services when and where we want them
3. The proliferation of sensor technologies will lead to exponential growth in the Internet of Things (IoT), which is the foundation for the Networked Economy. Vala Afshar paints a grand picture of life with the Internet of Things. And, another view… Cisco’s Joseph Bradley defines the Internet of Everything slightly different as the intersection of people, processes and data. He talks about how Barcelona used it to do everything from reducing
traffic congestion to offering free Wi-Fi through street lights.
4. How do individuals prepare for the Networked Economy? Well, you are probably living it already. You play a role in the Networked Economy, even if your alarm clock isn’t connected to your refrigerator which isn’t connected to your house security system which isn’t connected to the local police department. Is this an exaggeration? Perhaps, but reality soon enough. You’re a contributor to the Networked Economy if you spend time on Facebook connecting with old friends. You’re a contributor if you use a fitbit or a Jawbone and share results with your trainer or doctor. You’re a contributor if you use a collaboration tool at work like I do or even one that you use for your child’s school. You’re a contributor if you use Waze or other interactive traffic applications.
5. How do you get your business prepared for the Networked Economy? In short, you need to do three things:
- Activate: Connect your people, business partners, and asset resources
- Optimize: Things like infrastructure, workforce, and services need to tie back to core processes and workflows that run your business
- Transform: Taking advantage of the network effect to reinvent and automate processes in real time, simplify infrastructure and unleash human potential
How do the technologies of the Networked Economy – cloud, sensors, networks, and Big Data – translate into business strategy? Author Joe Weinman offers four strategies for improving decision making, service offerings, customer recommendations, and collaborative innovation.
Hyper connectivity will drive the next phase of the world’s economy. Everyone from individuals to business and society to devices are becoming interconnected in real time, leading to a way of life that is more collaborative, responsive, and efficient. And hopefully, more fun.
Join us for more conversation on the Networked Economy at www.sap.com/networkedeconomy.