The Next Economy: After ‘MarketWorld’
Editor’s Note: We live in an amazing era, where the possibility of widespread disruption of traditional economic and business models grows with every day. The technological leaps taking place are simply astounding, and one of the single best examples of this trend is in the emergence of the “Maker Economy/Sharing Economy” taking place right now. This fundamental shift in production and distribution has profound implications for every aspect of human civilization, and therefore is something MR should be paying close attention to. Luckily Robert Moran is on the case. Bob leads Brunswick Insight in the Americas, writes and speaks on emerging trends and serves on the Board of Directors for the World Future Society. He is a globally recognized futurist, and most certainly is the preeminent thinker on future trends in MR.
Here is his take.
By Robert Moran
When the Berlin Wall fell in 1989 and took communism with it, the well-respected consulting firm Global Business Network (GBN) was asked to paint alternative scenarios for a post-Communist world. They developed three scenarios:
New Empires, a kind of regional, neo-mercantilism
Change Without Progress, hi-tech gangster capitalism
MarketWorld, a fast-paced, globally networked finance capitalism
Of course, GBN correctly identified the “MarketWorld” that we have been living in since 1989.
But, what comes next? What comes after “MarketWorld”?
And how will the next economy change American politics?
These are big questions that very little of contemporary American public opinion research addresses.
Fortunately, we do have some data on the outlines of the next economy (shared, networked, automated) and we have Jeremy Rifkin’s sweeping portrait of market capitalism’s next act.
In his new book, The Zero Marginal Cost Society, Rifkin argues that capitalism’s own “extreme productivity” is speeding it toward its next iteration, a decentralized market economy operating globally in the online “collaborative commons.” In economic terms, Rifkin analyzes the trends leading us toward “near zero” marginal cost, an economy in which the cost of producing each additional unit of a product or service is nearly or essentially zero — making products incredibly cheap while eroding profit.
If this sounds familiar, it should be. This is already happening in communications, publishing and entertainment. The marginal cost of another download is virtually zero.
The business model disruption in communications, publishing and entertainment today will happen in energy (distributed solar power generation), education (MOOCs), banking (peer to peer lending), computing power (see Moore’s Law), and manufacturing (3D printing) tomorrow.
But, it’s not just a story of “extreme productivity,” it is also the story of:
1. production and power shifting from large, capital intensive enterprises to the individual “prosumer”
2. the rise of “sharing” business models and the trend toward “disownership”
There is now a growing body of opinion research in these spaces:
The term “prosumer” describes any consumer engaging in household production activities. These could include renting assets (home, auto, etc.), household energy production (a growing threat to existing utilities), and household creation of products and services as seen in microtasking sites like TaskRabbit and in the future of home-based 3D printing.
The trend toward many consumers now valuing access over ownership has been well-documented. This is especially true for millennials and cars.
A 2013 Harris Interactive survey found that in the past two years, 52 percent of Americans rented, borrowed or leased items instead of buying them.
A 2014 Chubb Group survey found that 36 percent of Americans would rent a private home for vacation and that nearly a quarter would rent out their vehicles.
But the best data on the sharing economy comes from the 2013 “Sharing is the New Buying” study by Vision Critical and Crowd Companies. This survey of 90,112 adults in the US, UK and Canada segmented the population into non-sharers, resharers (those who buy-sell used goods online), and neo-sharers (those already using advanced online sharing networks.) Critically, 40 percent of the US population is now engaged in the collaborative, sharing economy. The breakdowns are as follows:
Non-Sharers: 60% of US population
Re-Sharers: 16% of the US population
Neo-Sharers: 23% of the US population
But, why should public opinion researchers, pollsters and elected officials pay attention to these trends? There are two reasons.
First, because the next economy is more likely to be driven by networks of prosumers and e-lancers than large corporations. In the 21st century the people are the heroes now. And secondly, because the rise of the next economy that Rifkin describes will undoubtedly cause flash points with 20th century businesses. We see this already with:
1. Conflicts over tax treatment of traditional business models vs. sharing models
2. Traditional business model attempts to insulate themselves from the heightened competition of sharing models.
3. Public shock that anyone could simply purchase a 3D printer, download the plans for a firearm and print themselves a gun.
4. Electric utilities seriously analyzing the threat from home based solar power. Read the Edison Electric Institute’s report on “disruptive challenges.”
Take 3D printing as an example. Peer-to-peer music sharing reshuffled the music industry. Napster brought the marginal cost of music to near zero. 3D scanners and printers will do the same for many physical objects that we purchase today. It won’t happen tomorrow. 3D printing and scanning technology is still improving. But it will happen. We will have a Napster for things. If you doubt it, just take a look at Thingiverse. The public policy implications of this are very challenging. Makers will design, share and print their own products. They will borrow from existing design, challenging business control of its intellectual property. And, they will utterly disrupt the current manufacturing, distribution and retailing system. In a sense the workers will own the means of production. And the act of making will color their political views. In the future we will closely study the political attitudes and behaviors of prosumers and makers. A good start may be an examination of the White House’s first ever Maker Faire.
Polling and most market research is a “snapshot in time” — a clear picture of opinion the moment the survey was taken. This is good for helping us understand the opinions driving politics today. But, if we want a clearer picture of emerging trends and the next economy, we need to better understand the effects of automation on employment, sharing on existing business models and household production on political views. A good start is Rifkin’s Zero Marginal Cost Society.