The Rising Frugal Economy
To build new industry value chains that benefit people, society, and the planet, we need a new economic operating system.
In 2020, the world is grappling with COVID-19 along with several other major crises. The International Monetary Fund predicts that the world could experience the worst recession since the 1930s this year, with the global economy contracting by 3% as advanced economies shrink by 6.1%. The World Trade Organization expects global trade to fall by as much as 32% in 2020. The Organisation for Economic Co-operation and Development reports that inequality in the world’s most developed economies is at its highest level in 50 years. The World Meteorological Organization recently warned that over the next five years, annual global temperatures could potentially rise more than 1.5 degrees Celsius above preindustrial levels, leading to catastrophic climate change.
Cocreate better value from all resources with B2B sharing
Millions of citizens worldwide are already practicing collaborative consumption by sharing their cars and apartments with one another through platforms like Uber and Airbnb. This is the business-to-consumer sharing economy, which PwC has estimated will grow to a $335 billion market by 2025.
Visionary companies are, in turn, shaping the business-to-business sharing economy by sharing their physical and intangible resources and assets with one another. By keeping their resources and assets fully utilized, companies can maximize value, generate new revenue, drastically reduce waste, and amplify their positive impact on society. Given its sheer size, this B2B sharing market could potentially be worth several trillion dollars.
B2B sharing is already well underway in Asia and Europe but is struggling to take off in individualistic and competitive corporate America. In India, for instance, EM3 Agri Services’ B2B sharing platform gives small farms on-demand access to equipment like tractors and crop management services on an affordable pay-as-you-go basis. This enables farmers to produce more — and earn more — using fewer resources. At Les Deux Rives, a business district in the heart of Paris, 30 colocated enterprises share office space, equipment, and services, and recycle/upcycle waste as an integrated, synergistic network. In the Netherlands, Floow2’s B2B sharing platform enables organizations to share business equipment, enabling hospitals, for example, to share their medical devices and services, thus maximizing their asset use and patient care.
B2B sharing isn’t limited to equipment and physical assets. Companies can also share their employees with one another. Vénétis is an association of 360 small French businesses that hires experts — in fields as diverse as industrial quality control and web marketing — as full-time employees and shares them on a project basis among its member businesses, thus replacing unstable part-time jobs with safe, “shared-time” jobs. People + Work Connect is a new analytics-based employer-to-employer platform colaunched by Accenture, Lincoln Financial Group, ServiceNow, and Verizon that helps people laid off during COVID-19 rapidly find work in another organization.