This is an excerpt from Empower: How to Co-Create the Future. The full 200+ page book is available by donation!
“Crowd-based capitalism signifies a fundamental shift in how we organize the world’s economic activities”
excerpt from book
David Passiak: The Sharing Economy begins with a story of you looking through Mary Meeker’s slides of annual predictions, which have become infamous for forecasting the future of tech. She foresaw an asset-light generation that wants everything on demand, shifts from access to ownership, flexible work hours, etc.
You describe this kind of a-ha moment where you realize there was much more going on. In fact, this signified a radical shift where the crowd would eventually replace the corporation as the center of capitalism. Can you tell us about this radical shift towards crowd-based capitalism?
Arun Sundararajan: The notion of an asset-light existence focuses on shifts in consumption and the idea that we are going towards a more on-demand, collaborative form of consumption—where you’re not buying music; you’re streaming it. You’re not buying a car, but ordering it on-demand. That gets rid of assets in favor of experiences, or replaces ownership with access. But that is one slice of a broader transition.
The mechanism of producing the world’s goods and services at the end of the twentieth century was very organization-centric. A lot of large institutions employed people full-time making a set of products and services that were then delivered to consumers. Now we are seeing the creation of systems that draw on resources as needed from a crowd of distributed providers.
For example, there is the Airbnb model where you draw on a crowd of distributed homeowners to provide short-term accommodation; or a crowd of distributed Lyft or BlaBlaCar drivers to get transportation on demand; a crowd of individual investors to assemble small business loans at Funding Circle. More broadly, all of this signifies a fundamental shift in how we organize the world’s economic activities. I refer to this as the rise of ‘crowd-based capitalism.’