Is the collaborative economy really the future or is the movement confined to particular demographic groups?

In the face of recent and successful clashes between established businesses and collaborative economy disrupters (for example Uber versus black cabs in London, or JustPark versus city councils), how much do we need to take notice of the collaborative economy? Is it really going to change the world we live in or is it just a phase? I attended a recent Nesta event ‘Making Sense of the UK Collaborative Economy’, which was based on their research with Collaborative Lab. The event was largely a snapshot of the current state of play, but it also gave rise to some interesting questions and challenges, which I thought might give you a little more insight into how the collaborative economy is taking shape and what it might mean for brands, both today and in the near future.

Nesta defines the collaborative economy as “a different way of meeting the needs we have”. The collaborative economy is young and tech-driven, but very varied in scale and sector. The bodies and organisations that operate in the collaborative economy can be grouped under four pillars: consumption, production, learning and finance – although Nesta acknowledged that other pillars may develop with time. Nesta also proposed a set of common identifying characteristics common to any collaborative economy operator:

  • Driven by Internet technologies
  • Has distributed networks (of people and goods)
  • Utilises idling capacities (tangible and intangible)
  • Develops meaningful interactions and trust
  • Fosters openness, inclusivity and the Commons

What is particularly interesting, however, is to look at who participates in the collaborative economy. According to Nesta and Collaborative Lab research, 25% of the UK population took part in the collaborative economy last year. Yet it is the managerial, professional and administrative workers in full or part-time employment who over index on likelihood of taking part in collaborative economy activities. Even more troubling is that 27% of white populations participated versus just 11% of black and minority populations. Is the collaborative economy exclusive to the middle classes? And why does there appear to be a lack of diversity within such a modern movement?

The answer to these questions may lie in the meaning individuals take from the collaborative economy. Much of the population participates in collaborative activities such as swapping clothes, car-pooling or house/pet sitting, but making the jump from private sharing to public sharing is key to participating in the collaborative economy. For many, making connections with strangers still doesn’t feel natural – and most people are unlikely to make the leap unless they can see tangible benefit to themselves. I think the majority of people would agree that collaborative economy ideas are good ones, but it seems that certain groups of people struggle to see beyond the ideological nicety to how the collaborative economy relates to them and their own lives.

Advocates of the collaborative economy argue that their organisations and enterprises, whether public or private, offer people more choice, greater convenience and higher levels of empowerment. And it’s the latter that should attract minority audiences in particular, as the collaborative economy has the potential to offer greater opportunities to otherwise marginalised populations. For example, Khan Academy offers people free education via an enormous library of online resources. Zopa enables people to get loans without having to go via banks or pay the crippling rates of loan sharks. TaskRabbit enables low-skilled workers to get regulated, insured and flexible work. Yet these opportunities only gather momentum when they are communicated well and when they outweigh the perceived risks of getting involved.

Common concerns relating to participation in the collaborative economy include safety, a mistrust of strangers, and regulation. It is also likely that these concerns are felt more heavily by those who are already disengaged or under educated. Brands that operate in the collaborative economy have a certain responsibility to address these issues, as do governments and authorities. Better insurance propositions, government legislation and big brand partnerships all go a long way to legitimising collaborative economy activities and building self-regulation among their participants. Perhaps measures like these will broaden participation in the collaborative economy and make it accessible to all. The good news is that there is evidence for transference of trust; once collaborative economy activities are normalised in one sector (for example via Uber in car transport or via Airbnb in travel accommodation), people are more likely to trust similar activities in other sectors.

Is the collaborative economy here to stay? A combination of some very impressive statistics attesting to its potential  and success stories of collaborative economy businesses are certainly compelling evidence for high-impact change. JustPark, which lets customers find and pay for unused parking spaces, has 500,000 registered users and will have its app integrated into all BMW car dashboards from the end of this year. LoveHomeSwap launched in 2011 with just 250 properties on its books. Now it has almost 60,000 homes across 150 countries and 35,000 members. Even big brands are getting involved. B&Q launched Streetclub, which is the first social network aimed at getting neighbours to talk, organise events and share DIY knowledge and tools to build a stronger sense of community spirit. There are now over 1700 clubs across the UK.

So if you’re a senior decision-maker within a successful brand today, what do you think? Will you let the collaborative economy pass you by and risk being overtaken, or will you get stuck in?