The WE-economy: Value Creation in the Age of Networks

The WE-economy: Value Creation in the Age of Networks
Daily Good, by Peter Hesseldahl


Underlying the collaborative economy are a handful of very strong and general trends that are challenging the conventional business models in just about every sector of the economy – not just in the types of transactions that we usually think of as the sharing economy.

Focus is shifting from selling stand-alone, physical products to creating services that enable users to make the most of the resources around them.


The cost of coordinating even very small and non-standard resources to fit individual user’s needs is falling.
Everyone is increasingly empowered to participate and contribute to the value creation.


Everything is getting connected; interacting, collaborating and coordinating.


All of this is taking place with a backdrop of ever-harder pressure to make the most of our natural resources.


What this means is that, generally, value creation will increasingly focus on solutions that are created for a specific context by coordinating resources from a wide network of contributors with an exact knowledge of the user’s current needs.


Sounds obvious, perhaps, but for most companies this will require a basic shift in approach and business model.


From Broadcasting to Co-creation


The industrial value chain was linear. Companies would push ready-made products and service to consumers. It was a broadcast model, so to speak, with the company, at the center of the process, defining, designing and delivering the same product to a mass market. Consumers would have very little influence on the design of the product. Even if a company were supplying components that other businesses bought, their development processes would be separate.


Since industrialism, companies have evolved from selling mass produced one-size-fits-all objects, to gradually offering more choices. To compete, customized and individual solutions are gradually becoming even more specific, to the point where they are created for a particular context: not just matching an individual user, but also factors such as the location, the time, the person’s schedule and his or her profile of preferences.


From Stand-alone Products to Networked Solutions


The industrial model was focused on products. If consumers wanted faster or more comfortable transportation, they would buy a better and bigger car.


Today, a bigger car will generally not get you faster to your destination. Instead, mobility can be improved by coordinating the use of the car with a range of other resources. Knowing that you can drive directly to a vacant parking place, the quick and smooth transfer to a train, or being able to use a city bike saves time.


Sharing the ride with others saves money, and reduces congestion in traffic.
The car company can still be part of these solutions, but the new value for customers is created by coordinating all the elements involved in enabling mobility in the specific situation.


In a collaborative economy, value is created in networks. This changes the relations: Customers are the starting point, and an ecosystem of suppliers and stakeholders make themselves available to contribute elements to solutions that fit the individual user’s specific context.


Users are involved in specifying the solution, and the resources involved are not necessarily just coming from companies, but could also be public services, or contributions from the end-users themselves or from their peers and communities.


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