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Tuesday 22 Aug 2017 | 05:36 | SYDNEY
Tuesday 22 Aug 2017 | 05:36 | SYDNEY

Here comes the sharing economy

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COMMENTS

6 May 2011 11:31

Remember when then Prime Minister Rudd justified his Government's financial support for Australian manufacturing (especially the car industry) on the grounds that he wanted Australia to be 'a country that actually makes things'?

Once these 'things' are made, they are then purchased and, finally, used. Or are they? Think about your car, for instance, probably your most or second-most valuable asset. Statistics collected in North America and Western Europe suggest cars are only used 8% of the time. The other 92%, they sit idle. The same is true for a lot of other stuff you own.

Now online social networking is allowing all that excess capacity to be used much more efficiently, which is good news overall, but another blow to the manufacturing economy and even the traditional consumer economy:

Now that the sharing economy is gaining the backing of the financial community, corporations from car manufacturers to big-box retailers better start paying attention. "This has the potential to be lethally disruptive," says Umair Haque, an economist who recently published The New Capitalist Manifesto with Harvard Business Press. Sharing platforms won't bankrupt a company like Home Depot, says Haque, but they could eat away at its business. "If the people formerly known as consumers begin consuming 10% less and peering 10% more, the effect on margins of traditional corporations is going to be disproportionately greater," says Haque. "Which means certain industries have to rewire themselves, or prepare to sink into the quicksand of the past."

Read more here.

Photo by Flickr user Duncan.

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