I love economics. It truly is a fascinating field of study.
But it does have a big knock against it: its terminology is, quite frankly, the worst.
Consider the names of some of my favorite economic theories: Something behavioral, the lump labor fallacy, sunk cost fallacy, creative destruction, skill-biased technological change, and, my favorite, the trilemma.
And then, of course, there is the “sharing economy,” of which we’ve been hearing so much about lately.
Fortunately, this term actually has a nice sound to it, and the concept is a rather easy one to understand. A nice way to think of it: If you’ve used any app or website that’s allowed you to consume something as a service, then you’ve engaged in the sharing economy.
Here’s how Rachel Botsman, an author on the subject, described the concept in an article in The Economist:
Broader definitions of the sharing economy include peer-to-peer lending (though cash is hardly a spare fixed asset) or putting a solar panel on your roof and selling power back to the grid (though that looks a bit like becoming a utility). And it is not just individuals: the web makes it easier for companies to rent out spare offices and idle machines, too. But the core of the sharing economy is people renting things from each other.
If not a new concept, the term seems to be one–certainly one that has grown in popularity and application due to technological advances–and there is no doubt that it will be become more ingrained in our daily lives. Especially as established companies being disrupted by this trend begin to find ways to make a business out of it, which they undoubtedly will.
To quote the same Economist article mentioned above:
In the past, new ways of doing things online have not displaced the old ways entirely. But they have often changed them. Just as internet shopping forced [others] to adapt, so online sharing will shake up transport, tourism, equipment-hire and more.
Adapt is probably the key word in the above quote. And how is it the saying goes: Adapt or be left behind? Not a nice ring to it, I know, but certainly something we should all keep in the back of our minds.