The rise of a more cooperative societal nature among the citizens of the United Kingdom over the past decades has established the UK as a 'collaborative economy.' Collaborative economies are roughly defined as economic activities and models where people have access over ownership. Decentralised networks are promoted over centralised institutions, and wealth is unlocked. More and more people are sharing, everything from bicycles to private airplanes, and their own bedrooms. This collaborative nature has stirred up the pot of traditional market practices; we are now looking at a new way of doing business. And consequently, just as we share our space, we are looking to each other for finances, through crowdfunding.
A collaborative economy is brought upon through the phenomenon of ‘collective consumption’. Researchers and authors, Rachel Botsman and Roo Rogers define this behavior as “ the reinvention of traditional market behaviors, such as bartering, renting, trading and exchanging, through technology, enabling them to take place on a scale and in ways never possible before.”
There are significant implications of a collaborative economy on small businesses and entrepreneurs. A new business model has formed where current activities have been extended, mainly done so through acquisitions and partnerships. It is “helping the economy and society simultaneously by unlocking the value of idle assets while rebuilding social capital. “ This shift in our times “is engendering an environment where new models (are) being tried out and successful ones (are) growing,” as stated by Botsman and Rogers.
While the collaborative economy is growing worldwide, it is obviously growing at different paces. The UK’s economy and social wellbeing is established to be collective, whereas in the US it is more individualist, meaning that the culture is oriented around the self; this could be a major factor as to why London has recently been announced as the world’s leading crowdfunding capital. In the UK alone, over £200 million worth of investment was financed through crowdfunding by the end of 2012, as stated by researchers at Nesta, a charity research group.
As we increase our trade through peer-to-peer methods, government regulations were not as swift to adapt. It is of vital importance for regulations to adopt quickly and appropriately with crowdfunding so that the benefits may be maximized as well as encouraging a greater number of people to invest in the global and local communities and economies.
The number of people that are participating in collective activities is increasing on a yearly basis. It has been estimated that 25% of people living within the UK have taken part in collective activities through an online platform. The statistic is promising as it shows people are trusting of the Internet to participate, very encouraging for online crowdfunding platforms.
This collective nature only seems to be expanding and redefining itself on a yearly basis; rules and regulations should be flexible and up-to-date in order for its potential to be maximized. This is especially true when it comes to crowdfunding.
References:
Alois, JD. (2014). Nesta Reports on the Collaborative Economy. crowdfundinsider.com
Stokes, K, Clarence, E, Anders, L, Rinne, A. (2014). Making Sense of the Collaborative Economy. Nesta.com
Photo Credit: Simon: https://flic.kr/p/gVLeY8
There are significant implications of a collaborative economy on small businesses and entrepreneurs. A new business model has formed where current activities have been extended, mainly done so through acquisitions and partnerships. It is “helping the economy and society simultaneously by unlocking the value of idle assets while rebuilding social capital. “ This shift in our times “is engendering an environment where new models (are) being tried out and successful ones (are) growing,” as stated by Botsman and Rogers.
While the collaborative economy is growing worldwide, it is obviously growing at different paces. The UK’s economy and social wellbeing is established to be collective, whereas in the US it is more individualist, meaning that the culture is oriented around the self; this could be a major factor as to why London has recently been announced as the world’s leading crowdfunding capital. In the UK alone, over £200 million worth of investment was financed through crowdfunding by the end of 2012, as stated by researchers at Nesta, a charity research group.
As we increase our trade through peer-to-peer methods, government regulations were not as swift to adapt. It is of vital importance for regulations to adopt quickly and appropriately with crowdfunding so that the benefits may be maximized as well as encouraging a greater number of people to invest in the global and local communities and economies.
The number of people that are participating in collective activities is increasing on a yearly basis. It has been estimated that 25% of people living within the UK have taken part in collective activities through an online platform. The statistic is promising as it shows people are trusting of the Internet to participate, very encouraging for online crowdfunding platforms.
This collective nature only seems to be expanding and redefining itself on a yearly basis; rules and regulations should be flexible and up-to-date in order for its potential to be maximized. This is especially true when it comes to crowdfunding.
References:
Alois, JD. (2014). Nesta Reports on the Collaborative Economy. crowdfundinsider.com
Stokes, K, Clarence, E, Anders, L, Rinne, A. (2014). Making Sense of the Collaborative Economy. Nesta.com
Photo Credit: Simon: https://flic.kr/p/gVLeY8
About the author - Jasmien Cels
Jasmien is currently studying a bachelors in Business Studies from Cass Business School in London while interning at Crowd Valley. Originally from Belgium, she grew up in Switzerland, Ethiopia, USA, and Japan.
She is very passionate about the start-ups, entrepreneurship, technology, and travelling; she aspires to one day become an entrepreneur.
Jasmien is currently studying a bachelors in Business Studies from Cass Business School in London while interning at Crowd Valley. Originally from Belgium, she grew up in Switzerland, Ethiopia, USA, and Japan.
She is very passionate about the start-ups, entrepreneurship, technology, and travelling; she aspires to one day become an entrepreneur.
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