Tag: economy

What should we call the sharing economy

What label should we give to businesses like AirBnB and Uber?

Stop calling it the sharing economy, cries marketer Olivier Blanchard in a blog post describing how the label is inappropriate and doesn’t accurately describe the imbalances in the relationships between providers, users and the online platforms that facilitate them.

The question is what do we call the business model of companies like Uber, AirBnB and the myriad other services that take providers’ time and resources – cars in the case of Uber, homes or spare rooms for AirBnB – then make them available to people who can use them, taking a commission in the process of course.

Blanchard wonders if much of the success of these companies is because America’s cash strapped middle classes are desperately trying to find additional source of income and there is very much a strong argument for that.

More importantly, is what do we actually call these businesses? While they are potentially are as exploitative as the free labour models that have evolved in the media with businesses like Huffington Post, at least they provide some type of income even if for Uber drivers the net returns may be marginal at best.

Blanchard himself suggests the Microtransaction Economy however that’s not a satisfactory label as the transactions – which may be many thousands of dollars for some AirBnB rentals – are not always small.

Maybe we should call it the downtime economy, where we’re using the time we’re not busy or when we’re not using our homes, cars or others assets to earn income. That too though doesn’t strike me as satisfactory although it does seem to address the underlying idea these services are really only intended to supplement somebody’s earnings, not be their primary livelihood.

None of these labels though are satisfactory and maybe we have to ditch the economy moniker. It’s time to start thinking about what we really should call these businesses.

Your thoughts.

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Taiwan as a destination for inspired team bonding

Taiwan looks to publicise its attractions for incentive travel

This is a paid post as part of the Nuffnang blogger program

Last year the Taiwanese trade promotion agency MEET TAIWAN launched Asia Super Team, an Asian business contest to promote the island as a desirable destination for meetings, incentives, conferences and exhibitions.

In its second year, the contest has been expanded to Australian businesses, with the Aussie finalist winning an all-expenses-paid tour of Taiwan to experience the beauty of the country’s incentive offering. The global winner will receive an incentive travel package to Taiwan worth USD 50,000 plus MEET TAIWAN will donate USD 5,000 to a charity of the winner’s choice.

The Asia Super Team contest starts with an online proposal submission, followed by public voting to determine the finalist from each country – this year being Australia, Japan, South Korea, Singapore, Malaysia and Thailand – who will win a trip to Taiwan to attend the final stage of the competition.

Often overlooked by MICE (Meeting, Incentives, Conferences and Exhibition) travellers, Taiwan is a unique destination. While the West Coast strip is one of the world’s largest electronics manufacturing centres, most of the island is rugged and picturesque, overlaid with a complex Twentieth Century history. The capital of Taipei and the second city of Kaohsiung are vibrant, global cities.

To enter the competition the online stage invites organisations to submit an itinerary proposal illustrating their passion and understanding of Taiwan’s incentive travel attractions. The contestants then share their proposals on social media to help attract the highest number of public votes, determining the finalists who will go through to the tour in Taiwan.

For the successful finalists the tour of Taiwan includes participating in a five-day-four-night competition that will test them with a series of team-bonding challenges. These may include hunter training in an indigenous tribe in Leshui; performing a drum session with Grammy nominated Ten Drum Art Percussion Group at the Ten Drum Ciaotou Creative Park in Kaohsiung; and singing popular Taiwanese songs on board Taiwan’s parade floats.

The public can vote for their favourite proposal on social media to be entered into a draw to win round-trip China Airlines air tickets to Taiwan.

The overall winner will receive an incentive travel package to Taiwan valued at USD 50,000 and a donation from MEET Taiwan of USB 5,000 to the not-for-profit of their choice.

Registration and proposal submissions to Asia Super Team: Team Up for Good are open and run until 30 August with the public voting running from August 3 until 30 August 2015. You can enter through the MEET TAIWAN website.

As one of East Asia’s economic powerhouses with a fascinating history and spectacular scenery, Taiwan is well worth a visit.

This is a sponsored post brought to you by Nuffnang and the Taiwan External Trade Development Council (TAITRA)

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Discussing a post Capitalist future

Is technology taking us into a post-capitalist era?

Is capitalism dead? Journalist Paul Mason discusses his book outlining a post capitalist future on a Guardian Live panel that covers how technological change is undermining the foundations of what we understand to be capitalism today.

While it’s arguable that capitalism is dying, more likely its evolving away from the current corporatist, consumerist model driven by easy credit, the panel makes some excellent points about how technology is changing the underpinnings of our society’s economic structures.

While the video’s long at 90 minutes, it’s well worth watching for some interesting observations on how our society and economies are evolving in a connected century.

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India goes digital

The Indian government looks to creating a digital startup culture

“If Indians can work in Google. Why can’t Google be made in India?” Indian Prime Minister Narendra Modi asked last week when he launched the Digital India program.

Digital India is an ambitious project based on three areas of vision; getting infrastructure to all billion Indians, digitally empowering those citizens and improving government through the use of technology.

Certainly the project has caught the imagination of the business community with Indian tech companies pledging $US 72 billion to the initiative with the promise of over a million jobs being created.

In the past, India has been notable for its slow, bureaucratic business ways but Prime Minister Modi is promising to change all of that under the Digital India initiative.

“The world is changing, quicker than ever before and we cannot remain oblivious to that. If we don’t innovate, if we don’t come up with cutting edge products there will be stagnation”

While India’s government is talking the talk, actually changing the nation’s business community is going to be a huge but not impossible task although the Digital India project has had a difficult history.

That task though is necessary as South Asia has for decades lagged the growth of the countries to their East however now countries like India, Pakistan and Bangladesh have the benefit of younger workforces while powerhouses such as China, Japan and South Korea age.

Should we see an Indian Google in the near future it won’t look like today’s Silicon Valley giants given the cultural differences between America’s Bay Area and India’s business communities.

However if we do see an ‘Indian Google’ it will be huge given the size of the nation’s domestic market. Like China’s Alibaba, a successful local enterprise can become a global player just based on its user numbers.

There’s many barriers to an Indian Google happening but those who scoff at the idea should remember how fifty years ago the thought of Japan being a high tech manufacturer were laughed at and the idea of China being the world’s factory was unthinkable.

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Why are public companies becoming rare?

Does the shift away from listed companies indicate a change in business and investment models?

The United States has only half the publicly listed companies of twenty years ago, writes Barry Ritholtz in Bloomberg View.

While the Initial Public Offering still remains one way for startup businesses to release  wealth to founders and early investors, the number of mergers and acquisitions has seen the total number of public companies fall over the last two decades.

Most of the fall has been due to existing companies being bought out through mergers and acquisitions while there have been fewer new businesses listing to replenish the stocks.

Last year we interviewed Don Katz, the founder of talking book service Audible which was listed in 2000 and acquired by Amazon in 2008.

Katz found the running of a listed company was onerous and more value, and investment funds, was added by being part of a larger organisation.

The view of Katz and Audible’s shareholders that there is better access to markets and capital through larger companies probably drives much of the enthusiasm for M&As along with serving to increase the economic concentration of large corporations.

Ritzholtz speculates another reason could be the deepening pools of private equity and venture capital which mean newer businesses don’t have to rush into a listing to raise funds or give founders and early investors an exit.

Another reason could be that companies have become more profitable with US corporations being more profitable than any time since before the 1929 stock crash. More money coming in means it’s easier to fund the business using cash flow and investors can make a good return on dividends rather than share sales.

The cost of money could also be affecting listings, with debt so cheap companies can raise bonds cost effectively without diluting their equity or having the hassle of running a listed corporation.

Finally, it may be the ease of setting up a business makes listing not so necessary. A software company needs nowhere the capital required by a manufacturing venture so going to the market just isn’t necessary.

Should the lack of listing be a permanent thing then again we may see another force changing management and business cultures.

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Small business in the future workforce

An evolving workforce means changing markets, something that businesses have to pay attention to

While the discussion of the workforce of the future focuses, quite rightly, on the role of workers how employers and businesses fit into a changed economy is important as well.

For businesses, the future of work affects not just the staff they employ but also the markets they cater for as those workers are also their customers. This is even truer for small businesses catering for local markets.

The Committee for Economic Development Australia (CEDA) report issued last week describes some of those shifts in the economy and they are as important to businesses as workers.

Where the money is

The key thing from the report is that some communities are going to be more seriously affected by automation than others. The map of Australia that accompanied the CEDA report showing the likelihood of jobs being lost in across the nation underscores that imbalance.

australia-likelihood-of-losing-jobs-to-automation

In those areas expecting large disclocation, business is about to get tougher as workers find their skills are no longer valuable in the face of automation.

Similarly, if local industries are becoming more automated then businesses servicing those industries are also going to need the skills to meet their customers’ more advanced needs.

Consumer facing risks

So small businesses in those districts of great disruption have to consider their markets; if they are consumer facing then their customer base could be shrinking while if they cater to other businesses then capital investment and finding skills in the new technologies are going to be required.

Even there, the picture is cloudy as upstream industries will be affected. A town that serves as an agricultural centre, for example, will see smarter farms using less labor.

In that town, those businesses servicing other businesses that serve local consumers will see their market getting thinner while those servicing the smarter farms and processors will need to buy new equipment and find workers with the skills to operate it.

This isn’t a new phenomenon, it describes what’s happened to rural communities around the developed world as farming became industrialised through the Twentieth Century and the process is continuing as combines become self driving and automation replaces a lot of tasks currently done by labourers or manually operated machines.

Challenging the commuter belt

The question though is not just for rural enterprises, it applies for businesses everywhere as the workforce changes. It may well be the areas affected the most are commuter belt suburbs where white collar workers are displaced by artificial intelligence and algorithms creating problems for the local economy that’s based on services the needs of those middle class households.

It’s difficult to say for sure and that’s why the CEDA measures are based upon probability. For business owners and managers though, they’ll need to watch shifts in their marketplaces closely and watch for the opportunities that will undoubtedly arise from a changing economy.

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Creating a new class of worker

The future of work is going to need new classifications of workers

With the ‘sharing economy’ becoming more widespread and freelance workers possibly being the norm in the future, the question of how are they defined arises.

The simple answer is they become contractors after the California Labor Commission ruled for an Uber driver in a dispute over expenses incurred on the job. However it’s still possible that the level of control many of these services exert over workers may see many defined as employees.

For the ‘sharing economy’, the definition is important as the business model depends on shifting all the costs onto the contractors and customers. The service, like Uber and AirBnB, is only there ostensibly as a platform to match buyers and sellers.

Buzzfeed’s Caroline O’Connor suggests a third definition of worker, a ‘dependent contractor’. Under this category contractors would receive social security benefits, insurance and other features of permanent employment with the flexibility of being on call.

In many ways O’Connor’s suggestion is similar to the national insurance schemes of many European countries where workers contribute towards their eventual retirement or for the benefits they may receive should they be unfortunate to become sick or unemployed.

While the suggestion is worthwhile, it’s still not hard to see how the ‘sharing economy’ companies would want to put their contractors in whatever category reduces their costs and risks.

The discussion about workers’ protection and social security benefits needs to be had as we enter a period of economic change not dissimilar to the 1920s or late nineteenth Century where work patterns changed and there was substantial dislocation.

As the 1920s saw the start of concepts like unemployment and sickness benefits, we will need new employment and social security concepts develop to cater for the new economy and modern workforce.

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