The sharing economy is the future.  That matters.

Author:  Josef Correia Herbert

I'm a Millennial. That title means different things depending on who you ask. For me, it says I've grown up in a rapidly changing world, one where I started my education with a blackboard and ended it with an iPad. Unlike my younger cousins, I know what the 'save icon' actually is because I used floppy disks. Amongst all of these changes, one of the more recent ones is the emergence of the 'gig' or 'sharing economy'. I believe that the spread of the sharing economy will be the single most significant driver of change in how we live our lives since the smartphone.

The consumerism that has become so ingrained in our society since the mid 20th century has started to lose its shine for the majority of people in recent years. Yet, many see consumerism as a kind of patriotic duty to support the local economy. But recently, we've been seeing a shift away from the rampant consumerism of past decades; partially due to reduced purchasing power because of economic crises and partly because people are just over having so much 'stuff'. It's just not as fulfilling as it once was. In fact, according to Havas, 52% of people say they could live happily without most of the items they own - including 4 in 10 Millennials. Furthermore, 43% of Millennials stated that they often make purchases that are more a source of anxiety and regret as opposed to pleasure.

This growing resistance to consumerism coupled with a societal pressure to consume has resulted in people looking to change how they consume. People are now more willing to share, rent or borrow instead of owning outright. It is on the premise that sharing, owning or borrowing is as good as owning that the sharing economy is built.

The sharing economy includes a massive range of businesses from giants like Airbnb, Uber and Upwork to local bike share programmes. The sharing economy enables the not only physical things like a home or a car but also intangibles such as skills or manual labour.

The tendency and willingness to use shared services is higher amongst technologically savvy younger consumers. The majority of the sharing economy is based online, a realm where younger consumers are more comfortable than their older counterparts, and so it is only rational to expect that the pervasiveness of these services will increase with time as this segment grows in size.

The increasing pervasiveness of the sharing economy in different industries provides a host of opportunity to existing businesses. For the consumer, the benefits are clear - a lower barrier to entry for accessing goods. But it works the same for business, a consumer that may have been priced out of the market for a BMW, for instance, may be able to afford to drive one as a part of a car-sharing programme. Also, because a single product in a sharing scheme has the potential to generate many times its individual value over its lifetime, there is a lot of earning potential for businesses.

New business models always bring challenges along with opportunities, and the sharing economy is a disruptive force coming to an industry near you. How is your business planning for its inevitable arrival? Will you be one of the success stories or another Kodak?