If business is fundamentally about people exchanging value, then there’s no question that in a highly-networked world of ubiquitous information, we are all on a level playing field. Individuals today have more opportunity to find work, make contacts and exchange value than ever before thanks to technology and its network effects. And people are doing so at an ever-increasing rate. The Freelancer’s Union studied this trend and found there were 53 million or 34% self-employed freelancers in the US currently, and it projected that by 2020, 40% of the workforce will be independent.
Everyone is aware of the attention that Airbnb and Uber are getting for their sky rocketing growth and valuations. Airbnb, which is currently valued at over $20 billion, facilitates the peer to peer exchange of housing, while Uber, valued at over $40 billion, facilitates ride sharing. These companies are the darlings of the so-called Collaborative Economy, which is comprised of several related movements as defined by Rachel Botsman:
In How Companies Become Platform Leaders, Annabelle Gawer and Michael Cusumano describe the difference between products and industry platforms. Products are proprietary and under one company’s control, whereas industry platforms are foundation technologies or services that are essential for a broader, interdependent ecosystem of businesses. Industry platforms need complementary innovations to be useful, and vice versa. In Industry Platforms and Ecosystem Innovation, Gawer and Cusumano state that industry platforms are often associated with “network effects”: that is, the more participants who adopt the platform, the more valuable it becomes because of growing access to the network and complementary innovations.
As the disruptive scenarios emerge and evolve, I see them coalescing in the form of multi-industry business ecosystems. An ecosystem, in scientific terms, is a group of living or non-living things that depends upon each other to thrive. A business ecosystem is a self-organizing network (typically enabled by e-commerce and/or social technologies) whose participants exchange value around a common purpose. Because every industry today can be considered an ecosystem, the question is how those industries will evolve as a result of the disruptive scenarios.