From Sharing Economy to Slack Economy
This post started off with discomfort surrounding the term ‘sharing economy’. This term strikes me as misleading. Rather than sharing freely, as might be implied – a comfortable social imperative – it is more about entrepreneurship and monetization of slack resources.
The business case for the monetization of slack resources is primarily for individuals, but with a small scrape of profit for those connecting sellers to buyers. The accumulating transactions scrape across many parties, amounting to large profits. Providers here include Airbnb (under used residential property) or Uber (under used personal transport capacity AND personal time.)
So, rather than a ‘sharing economy’, I think of it more as the ‘slack economy’. This is not intended to be a demeaning term – better utilization of resources is no bad thing in terms of environmental impact – but it is more realistic. The realistic term offers us a more useful lens to look at other pools of slack resources, which can be used more effectively to benefit the owners and, by accumulated effectiveness, society.
From Residential to Commercial
Let’s consider office space as an example. The traditional owned/leased office space has already had some novel entrants. The ‘third space’ concept developed by the US-headquartered, international café giant Starbucks was technologically enabled by advances of portable personal computers, wireless data networks and mobile telephones. Hot-desking (where employees rotate between desks as needed) and open plan layouts arrived in quick succession.
Less glamorous entrants are rented and partitioned serviced office spaces like those provided by the global chain Regus, the shared-seat-based offices such as Seats2Meet in the Netherlands, or many co-working spaces – open plan rather than partitioned. Could there be another level of ‘slack economy’ possible in this space? Could more micro-sized portions of slack office resources, for example desks, wireless network capacity and meeting room space be mediated as well? Could the accreted complications of legislation, security practices and insurance be overcome with a digital mediation platform and trust network? Quite probably they could. Are the barriers to entry technological (mechanistic and social), regulatory, incumbent practice or are they generational? For what reasons might they be generational?
Power of People
Demography is a strong indicator of potential success for innovation. In the developed world for example a large number of people are retiring or living on a pension. In their lifetime they accumulated assets, including property. Monetization of slack residential property resources though more granular transactions is a useful mechanism to release value as Airbnb has shown. A part-rental solution is a much more comfortable mechanism than a complete sale, particularly with its associated transactions costs and limited options for investment of slack funds. This same residential property asset-owning generation is less likely to have interests in commercial property, such as office space that they would seek to monetize.
The rising young generation who take advantage of the ‘slack economy’ as users are disadvantaged in not having property assets, particularly commercial space, to monetize themselves. This young generation faces more temporary work commitments, which do not give them long-term working space. They face barriers to entry of acquisition and management of commercial property. Where might solutions be found?
Potential for Slack Exploitation?
New solutions for office space could come from places including active owners of commercial properties who are struggling to find medium to large leasees, from younger people who are able to assume financing to build scalable businesses (Businesses that could provide more granular offices services and new ground-up developments of office space designed for this style of working) and are familiar with the needs of their generation and from existing offices with decreasing worker density releasing slack resources within them.. More importantly, they could all be enabled by new digital slack resource mediation platforms. Platforms akin to the aforementioned Airbnb and Uber.
Back to Sharing
So, if we understand what a ‘slack economy’ is, then what might a real ‘shared economy’ be? That might be more about communal asset-sharing without the exchange of money. Does it have a place? Not everyone who is retiring has developed a strong enough resource base for their extending lifespan. In these cases, trusted sharing might well be a useful mechanism for a source of resources. This ‘real’ shared economy might be able to take advantage of mechanisms developed for the ‘slack economy’, like mediation platforms, trust platforms and even digital currency systems that are separate from traditional financial systems.
By unpacking or challenging one label – the ‘shared economy’ – and rethinking it – ‘slack economy’ we start to visit some interesting places and ideas that foretell of further innovation.
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