A new economic paradigm

The “collaborative economy” is a new economic paradigm made possible by digital media, collaboration networks, and increased environmental awareness. Why does that matter? Should we be concerned about it? And if so, how much? 

A woman named Marta is looking to sell a pair of shoes that she no longer wears. She lists them on an app for used goods shops. Marta is taking part in the collaborative economy unknowingly and will profit from it when she sells her shoes.

The collaborative economy: what is it?

In the “collaborative economy” (also known as “collaborative consumption”), consumers use modern technology. It is used to produce, procure, pay for, exchange, share, or rent goods and services. It is always changing since new markets are constantly opening up. It not only helps consumers but also encourages environmentally friendly, sustainable consumption. Further information on it can be found in this article from Tu Futuro Próximo (in Spanish). 

Collaborative economy examples

Systems with the following characteristics best describe the collaborative economy: 

Collaborative consumption: People advertise their products and services on online marketplaces that have a huge selection of things we can purchase or trade. 

Open knowledge: Non-profit platforms that distribute material that is not protected by a copyright and is available at all times.

Collaborative production: In real or virtual environments, people cooperate to manage initiatives, goods, and services, particularly in the design and engineering fields. Social lending, savings, donations, microloans, communal finance, and, in particular, “crowdfunding,” which is based on monetary contributions. Contributions from individuals and frequently utilized for music, art, and other cultural activities, are all examples of collaborative finance. As can be seen, this kind of economy is allied very closely with the broader concepts of the sharing economy. In fact, some economists and financial experts say that the difference between the two is merely a matter of semantics. Nothing more. 

The collaborative economy’s several sectors

Businesses have soared thanks to digitalization in several areas of the collaborative economy, particularly:

Accommodations: There are websites that enable people from any nation to share homes.

Some websites act as a middleman between visitors and property owners for vacation rentals.

Transport: There are apps that link passengers and drivers so they can ride together.

Secondhand: A number of applications offer for sale used items including clothing, books, home goods, and other things we don’t use.

Food: In order to reduce food waste, restaurants, grocery stores, and bars sell packets of leftovers that will be thrown away if not used.

The collaborative economy’s advantages

With new business, travel, and transportation options that are advantageous to us as consumers and environmentally friendly, the market has been altered by the collaborative economy.

The following are a few of the collaborative economy’s key benefits:

Increased supply: Those who promote goods and services provide consumers more options when they’re wanting to vacation or purchase goods like clothing, bicycles, and household appliances. Even smaller appliances like toasters or keyboards can be worked into the equation with complete flexibility.

Savings: We typically find cheaper goods at collaborative consumption firms. Another advantage is that we may occasionally swap them for things we don’t need instead of just purchasing them outright with cash. Of course the so-called cash-and-carry economy is a different economic paradigm that some economists now predict will be extinct in a few years. While other financial experts expect it to grow into the dominant means of exchange when the sharing economy converts to a full-time barter system.

Sustainability: This consumer trade lengthens the usable lives of the goods we purchase.

There is no need to create new items because we can reuse existing ones. Protect the environment by utilizing services like collaborative transportation and giving second-hand goods new life in order to reduce waste and more effectively utilize limited resources.