Collaborative economy — Supply

 Banks, corporations and education institutions used to dominate the supply segment of the economical process, providing most of the financial services, products and knowledge to the market.

Individual supply made the demand side aware of the new possibilities of consuming.

Collaborative economy changed this by introducing the individual capital/property in a more aggressive manner in the supply segment. Individual material, financial and intellectual capital got the attention it needed and got the marketplaces/platforms it needed for meeting the demand. Further more, it influenced the demand, by introducing new ways of consuming. 

 The supply part of the shift invoked by the collaborative economy is multidimensional and it doesn’t only address the economy in the ways of shift in capital and profit, but it has a significant impact on some low level dogmas regarding human behavior and social intelligence.

Shift in the perception of individuals of their belongings as assets.

The shift in monetizing individual assets.

• Individual material capital — vacant rooms and real estates, cars, household equipment and hand made items all of which individual property were put on the market through Airbnb, Uber, Etsy etc.,
• Individual financial capital — put on the market through Kickstarter, Lendingclub, Transferwise, Bitcoin etc.,
• Individual knowledge, content and skill — put on the market through Stackoverflow, Wikipedia, Fotolia, Taskrabbit, etc.

Gainer. Diverse revenue streams for individuals involved on the supply side and lower cost and wider range of choices and opportunities on the demand side. New intermediaries that emerged on the market as providers of platforms also gained from this trend of monetizing on individual capital.Disrupted. Individuals enter corporate territory and become their competition, which leads to smaller revenues on the corporation’s side. The labor market also gets disrupted, as the people employed in these industries start losing their jobs. In turn, they will need reeducation and re-qualification. This is to be provided by governments.

Collaborative economy redefines the ways in which individuals involve themselves in the labor process.

The involvement shift.

• Mass amateurism — Most of the above services run on amateurs. Individuals enter the segment mostly as amateurs: amateurs in the accommodation rentals, in the transportation business, amateurs in lending and investing, amateurs in photography, amateurs in knowledge etc.
• Crowd-sourcing — outsourcing to the crowd by the companies. Individuals using their knowledge and time to make an extra income.
• Common peer based production — It describes a new model of socioeconomic production in which large numbers of people work cooperatively (usually over the Internet). Commons-based projects generally have less rigid hierarchical structures than those under more traditional business models. Often — but not always — commons-based projects are designed without a need for financial compensation for contributors.
  
  One word that describes these occurrences is SELF-EMPLOYMENT. According to the UK government the self-employment emerged as a mass trend from the same reasons collaborative economy did, the crisis 2007–2009 and the internet.

  Gainers. Consumers get more choice and lower service costs which comes from eliminating corporate overhead in offering the services and by reducing labor cost because of the competition in the supply. Suppliers gain multiple revenue streams by monetizing on hobbies and informal knowledge and by offering professional expertise on the market. Markets gain more diversity by adding more dots on the both supply and demand axis, also extending the spectrum for the low cost/low quality services offered by amateurs which is perfectly valid if there is demand for it. Corporations which use crowd-sourcing as а source of problem solving are utilizing the geographically dispersed knowledge to gain profit.Disrupted. The labor market needs to adapt to the new ballgame. Being self-employed means that people have to regulate their insurance, pension and tax themselves. Governments have to adjust the regulation on the newly formed interactions between the individuals and the market. Corporations are loosing workforce and gaining competition. Professionals have to fight the newly introduced competition from the amateurs which will lower their cost on the market. Educational institutions have to follow up with the new trend of part time jobs and multi disciplinary involvement of the people on the market by offering multi disciplinary courses and adjusting the scholar programs to the new demand. Also, education institutions will have to prove that the level of knowledge they provide fits the market and it pays off to be an educated professional, possibly meaning that the scholarship costs will fall since the whole scholarship cost/labor market value ratio will be disrupted.

The new trend of informal groups, cooperatives and decentralized corporation

The organizational shift.

• Informal groups — people’s instinctive response to a threat is always accompanied by grouping in order to survive. If we look at this from the social anthropology prospective this has been the case since the beginning of the human civilization. Speaking from the psychological perspective, the Maslow pyramid indicates that the need for belonging is one of the main human needs. The whole socio-economical context and the presence of the internet allows the individuals to easily find peers and organize themselves in informal groups and organizations. Social engagement hides great potential in the bridging and bonding capital, thus it is another implicit value individuals can monetize on.
• Cooperatives — individualism and self-employment are sometimes in need of formal grouping that can simulate corporations. Having in mind that most of the economic subjects on the market are using economy of scale to beat competitors, economic grouping in same direction is also an incentive for the individuals. This has brought the cooperatives in the spotlight. It is hardly a new way of organizing, but the new structure of entities on the production side makes them a logical step towards lowering production costs and entering the market together. Cooperatives have strong social and collaborative tread which perfectly matches present situation and needs.
• Corporate decentralization — there are many examples of this trend among corporations. We are going to mention the holocracy and honeycombs as ways of mimicking decentralization and stimulate different kinds of value and commitment among the employees as a way to increase productivity. Decentralization is the fine print behind the collaborative economy and by having the hierarchy dismantled, different interactions among economic and social entities will be introduced.
• Co-Working space — by spending eight hours per day at work, earning for a living is not the exclusive role companies have in people’s lives. They have become a center of socialization as well. Self-employment has the shortage of socialization on the flip side. As freelancing increased in modern digital age it was logical that this new culture finds a solution for this shortage, so the co-working spaces were introduced. Co-Working spaces can be easily put as a type of a informal grouping.

Gainers. Individuals benefit from this post self-employment stage. Monetizing on their social interaction and participating in something more personal, adds a new quality in their involvement in the production process. This social aspect brings to the table social awareness, openness and freedom which implies responsibility and involvement. Communities will thrive and will redefine the ways in which people measure their success, not only by self interest, but with social contribution as well.Disrupted. Corporations will have to adapt and some of them wont be able to. Throughout the history there are many examples of companies that didn’t manage to catch the train of change and adapt. Hierarchy as a concept is being questioned.

Sociology, psychology, social psychology etc. shaped the economic current, often intentionally flawed and biased.

The incentive shift.

The usual assumption of the economist is that there is only one way of putting labor on the market and that is by acquiring money for it. Many of the services that are collaborative oriented are not related to money. 
 Wikipedia, Free Software and even The Pirate Bay are just few examples of people involvements in processes which don’t include money as an incentive. In the world which is open and the interactions are common and intensive, value can be found in many different places like reputation, involvement, knowledge, belonging, contribution, collaboration, socialization etc. Many of these aspects have implicit values and can be monetized further down the road. This incentive shift, although looking naive has the greatest impact on the current economic theory which resides on homo- economicus, the selfish and rational individual with flawless stream of information and judgments. This in mind, along with the misinterpretation of the Darwin’s theory of the survival of the fittest, together with few more misconceptions about human affinities and behavior that took place throughout history, have enormous influence in shaping the economic theory.Gainers. Society has the biggest gain from the raising awareness. Emphasizing the social aspect of ones behavior and putting different values on the spotlight will have positive effects on the whole social environment.Disrupted. Industries and concepts that rely on selfishness, prestige, possession, exclusivity, monopoly etc.

1. the evolution of collaborative economy;
2. supply, trade and demand aspects of the collaborative economy;
3. the future effects collaborative economy will have on world economic processes;
4. philosophical and economical concepts that can be perfectly mapped to the settings of collaborative economy;