The sharing economy will save the world.

Don’t believe the sharing economy can do that? Let’s break it down… First, let’s define the sharing economy. Mashable presents the sharing economy like this:

Collaborative consumption, peer-to-peer marketplaces, the sharing economy — it’s been called a few names by now, but no one is denying that the idea of accessing rather than owning is controversial — and it’s taking the Internet by storm.

Wikipedia defines collaborative consumption:

 The term collaborative consumption is used to describe an economic model based on sharing, swapping, bartering, trading or renting access to products as opposed to ownership.

The definitions don’t exactly match up, but let’s take what they have in common – namely, peer-to-peer marketplaces, and build around that.

A peer-to-peer marketplace

A peer-to-peer marketplace (or C2C – consumer to consumer) is a marketplace – a place to buy/sell/rent goods and services – that exists between peers. Some or all of the participants will act as both sellers and buyers. Why is this important?

Stuff, lots of stuff

Stuff, lots of stuff

This is what many people have at home. While that may look like a mess, it also represents economic value. Those are assets – goods that can be put up for sale in a marketplace. So that stuff can turn into cash. It just needs a place where a buyer can find it. That’s a marketplace. In the sharing economy terms, that’s a peer-to-peer marketplace.

Getting all that stuff back into use solves a few problems.

  1. It helps the previous owner make money.
  2. It helps the buyer save money.
  3. It reduces the amount of new goods that need to be made. That reduces CO2 emissions in manufacturing.

It’s not just stuff

Sharing economy sites for services are also popping up left and right. You can find sites to help you pick up your dry cleaning, get a wireless network set up at home, or even take care of your pet or yard work.

The Sharing Economy

The Sharing Economy

So how does that help?

  1. It makes money for the provider of services. That money goes back into the economy in some form.
  2. It helps gets a need solved locally, keeping money in the community.

Where does the money go?

Most sharing economy sites are relatively local, with the exception of room-sharing sites. That means that the money, the goods or the skills stay within the community. This is a crucial aspect of the sharing economy. Think about globalization, which has allowed the following debt map.

The American debt map

The American debt map, photo credit to Heartland Repubblica (http://temi.repubblica.it/limes-heartland/who-holds-the-american-debt/827)

Now imagine instead, that skills, assets and producers in a local ecosystem are empowered to link up more efficiently, in a frictionless marketplace. A lot of those same money flows become purely local money flows.

Keeping money in a community is a macro-economic benefit. It makes your community more self-sufficient. That allows you to develop local jobs, which are the obvious source of local economic growth.

And to think – the sharing economy can make all that happen.

Do you agree? If so, let’s talk. We can help you get your own sharing economy site started fast. Do you disagree? Tell us in the comments section below.