The rise of a collaborative economy
When the pandemic hit, the initial reaction of the world was to look inwards and many countries were concerned about their own borders. However, when the reality hit harder, so did the realisation that the problem was a collective one and so the solution too, had to be collective in nature.
The pandemic has pushed a lot of the world to come together to fight it, contrary to the nationalistic approach of directly pre-COVID times.
A recent example of this is that of pharmaceutical giant Gilead providing limited “royalty free licenses” to companies around the world earlier this month to make the antiviral drug Remdesivir for 127 middle and low-income countries.
In the same spirit, it will be as important to take these lessons of collaboration to post-pandemic times. There have been plenty of good examples of a sharing/ collaborative economy- empowering people, solving problems, creating value and yielding profits with purpose. Uber, Airbnb and many others have done just that.
The collaborative economy has made its mark on almost every sector; famous rocket producing company SpaceX transporting NASA’s rockets to space, Fiverr and Upwork providing platforms for freelancers and employees, FoodPanda revolutionizing the food industry by minimizing the distance between homes and restaurants. Freelancers are working from the comfort of their homes and the sharing economy has given workers flexibility to have a work-life balance by disrupting conventional working hours. These businesses are still thriving compared to conventional businesses.
The COVID-19 lockdown for some industries limited resources in certain countries, creating shortages of raw materials and other essentials. Industries responded positively by working in a collaborative manner. Many businesses have shown their agility in converting their production lines to make medical equipment and many smart businesses are evolving their systems to meet demand, reduce cost and provide exceptional services. Survival and quick solutions have led to innovations and driven industries that earlier worked in their own silos to work together.
Numbers show that the sharing economy is set to grow by $335 billion by 2025, according to a PricewaterhouseCoopers report. The scope of the collaborative economy stretches from the mobility industry to the energy sector to the consumer industry to healthcare to professional services. Ride hailing and delivery services have partnered with healthcare and pharmaceutical companies as well as supermarkets to provide for medical supplies, food and consumables.
The new sharing and collaborative economy has created novel ways to boost economic activity during the pandemic-led lockdown. The same can be taken forward in post pandemic times.
Investors are already rethinking about how to make their investment decisions by investing more and more in robust businesses and collaborative economy solutions. The rise in several billion-dollar companies have drawn the attention of businesses and investors alike.
Investment platforms have evolved too. People can now raise funds through collaboration like that in crowd funding. Some of these tools have been used since long to mobilize philanthropic capital and the same has been a huge factor to provide for people in crisis.
There is a huge benefit of collaboration. It is less expensive, saves people money, and is better for the planet. It is simply more sustainable.
Numbers show that the sharing economy is set to grow by $335 billion by 2025, according to a PricewaterhouseCoopers report. The scope of the collaborative economy stretches from the mobility industry to the energy sector to the consumer industry to healthcare to professional services. Ride hailing and delivery services have partnered with healthcare and pharmaceutical companies as well as supermarkets to provide for medical supplies, food and consumables. Not only does this strengthen supply chains, it also creates additional value for those involved. Some other thriving collaborative services are telemedicine and digital financial services.
Telecommunication has been the backbone of the sharing economy, enabling businesses to reach a large population connected through smartphones and the internet. Another behavioral change that has been fast-tracked is the use of digital money. Now people are demanding more online payments and saying no to cash. Economies like China and the US were already leading the way and developing countries are catching up out of necessity.
Industries and innovators were already planning for collaborative scenarios but nobody could have predicted that the world would be leapfrogging towards this model so soon.
Governments must also take these lessons forward and address larger problems of food security, healthcare and climate change. Despite some mixed messages from certain politicians around the world, the signs are loud and clear-- it is time not for nationalism, but collectivism.
*Managing Director, Khalid Majid Rehman, with financial advisory and governance experience across energy and infrastructure sectors. Sits on many local and global boards and is a strong advocate of sustainable development. She is the first Pakistani serving on the International Council of Association of Chartered Certified Accountants since 2014. Ayla is a Young Global Leader of the World Economic Forum.