Idea in brief
Taking their cue from accommodation rentals site Airbnb and ride-share service Uber, large organisations that are prepared to foster a more collaborative internal culture will be able to exploit new opportunities in the sharing economy. We investigate how big organisations can create revenue streams from existing assets by mapping their inventory and identifying opportunities to share.
The past five years have seen the creation of hugely successful companies that are helping to turn unused assets into regular income streams for millions of people all over the world. Dubbed the “sharing economy”, the capacity to use technology to rent out underutilised assets for short periods is generating tens of billions of dollars and setting an interesting challenge for established industries.
However, rather than run from the challenge, large companies can learn a lot about dynamic asset allocation from the “sharing economy”, saving themselves millions and potentially creating whole new revenue streams.
Turning assets into short-term revenue streams is vastly more efficient and makes economic sense. It also saves energy, reduces waste and improves a company’s reputation as a good corporate citizen.
“The question every business should be asking itself is: ‘What assets do we own that could be amenable to sharing?’” says Darren Sharp, managing director of Social Surplus, a strategy consultancy for the sharing economy.
“It could be office space, like meeting rooms or even desks. It could be heavy equipment like bulldozers and trucks, or specialised medical equipment.”
New twist on an old idea
Professor of sustainable enterprise at UTS Business School in Sydney, Suzanne Benn, says groups of farmers have long shared ownership of costly equipment. The difference today is that software interfaces can track and manage the assets being shared, making the process easier and more cost effective than ever before.
For this reason Benn describes the sharing economy as “a disruptive threat – but also a massive opportunity for businesses”.
“In many ways sharing is just a smarter way of getting things done,” Benn says. “And I think organisations realise they need to engage in new relationships with their customers and the community that speak of a different value system.”
The question every business should be asking itself is: ‘What assets do we own that could be amenable to sharing?
Where to begin
For those keen to exploit these new opportunities, an important first step is mapping inventory and identifying underutilised assets. They can then be shared with staff – fostering a more collaborative internal culture – or offered in the marketplace.
“Business-to-business rentals form a slowly emerging area,” says Sharp. “Some of the biggest players in the mining industry are looking at renting out their machinery when it’s sitting idle.”
Benn says smaller players could become more competitive by sharing costs. “If they’re struggling to get customers because of price, reducing the cost of some capital expenditure could enable a lower price and bring benefits across a sector,” she says, adding that companies in the same locality could look at sharing energy and waste-disposal costs as well as access to solar panels.
Sharp says: “It’s an area which has impacts in a multitude of dimensions – and that’s why it appeals to your hard-headed economic rationalist as well as more environmentally aware actors.”
The sharing economy
- Represents a big opportunity for large businesses to allocate assets effectively
- Provides a business model for sharing the cost of expensive equipment and improving cash flow
- Can assist companies to cut costs, reduce waste, save energy and develop corporate social responsibility programs
- Offers approaches that help build positive relationships with customers, partners and suppliers
- Is facilitated by well-designed technology that tracks and assigns assets