Julia Fehrer

A current research project being undertaken by Dr Julia Fehrer, Lecturer at the University of Auckland Business School and winner of the School’s Early Career Research Excellence Award 2019.

Future scenarios of the collaborative economy: Centrally orchestrated, social bubbles or decentralised autonomous?

Julia’s research is wide-reaching and deep-digging, focusing on the interconnected areas of digital service business, systemic innovation and entrepreneurship. Her “future scenarios of the collaborative economy” project, undertaken in collaboration with a team of researchers from the University of Auckland and other universities in Australia, UK and USA, sought to explore current trends and develop future scenarios for market structures in the global collaborative economy. The objective was to help companies, governments and societies better prepare for future disruption:

  • Companies, by stress-testing their business model and innovating
  • Governments, by developing policies and thinking about how they need to regulate or deregulate
  • Society, by thinking about the direction it wants to take collectively and acting accordingly

The approach taken by the team was to use “thought experiments” theoretically grounded in population ecology, taking “what-if” questions to the extreme to extrapolate future scenarios. What if, 20 years from now, we are completely detached from our possessions? For example, we do not own cars anymore, but have access to immediate transportation everywhere. What if artificial intelligence coordinates how we do business? What if we trade privately, one-to-one, based on blockchains, with no companies/goods and service providers in the middle?

For this project, the researchers designed three extreme scenarios based on population ecology, to stress-test the developments of today’s collaborative economy.

But first, what is the collaborative economy? In the global economic landscape, existing markets are being disrupted by increasing engagement, connectivity and peer-to-peer social interaction. This has led to collaborative consumption on a grand scale, through organised sharing, bartering, lending, trading, renting, gifting and swapping. The ownership of goods and services is in this model replaced by temporary access to goods and services owned by peers. Think about file-sharing, freelancing, crowdfunding, communal gardens, car-sharing, tool libraries and so on. Access is facilitated by increased connectivity and engagement via digital technology. Taking this concept further, it is likely that possessions will gradually lose their importance for expressing one’s identity, which is a trend that will shape the evolution of collaborative consumption.

So, to return to the three future scenarios:

  1. The centrally orchestrated collaborative economy, where people are connected by a few powerful platform providers. Uber, Amazon, Airbnb and WeChat are current examples. While growing and connecting more and more peers, platform providers like these gain ownership and control over core resources, including technological infrastructure and customer data.
  2.  The social bubbles collaborative economy, where individuals collaborate only within their social circle, usually with others who think and act alike. Organisations would occupy niches in which superiority of fit with the market trumps a generalist’s ability to adapt to a broader range of market conditions.
  3. The decentralised autonomous collaborative economy, in which collectives of individuals organise themselves around shared goals and values. Peer-to-peer connectivity leads not only to “blurring of boundaries” between customers and micro-entrepreneurs, but a complete openness and transparency among all participants in the market. Customers and service providers agree on smart contracts embedded in the algorithm of the blockchain, which sets the rules for service exchange.

Each of these future scenarios poses challenges for managers in the collaborative economy. In a centrally orchestrated scenario, challenges include the dominance of the big platform providers, their data collection and handling and their governance and regulation through government authorities. In a social bubble scenario, the key challenges are isolation, discrimination, and mobility across bubbles. In contrast, the openness of the decentralised system poses the challenge of coordination, governance, and participation of parts of the population in the system.

Fehrer, J. A., Benoit, S., Aksoy, L., Baker, T. L., Bell, S. J., Brodie, R. J., & Marimuthu, M. (2018). Future scenarios of the collaborative economy: centrally orchestrated, social bubbles or decentralized autonomous?. Journal of Service Management, 29(5), 859-882, https://doi.org/10.1108/JOSM-04-2018-0118.