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”

-Arun Sundararajan

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.’

ARUN SUNDARARAJAN is Professor and the Robert L. and Dale Atkins Rosen Faculty Fellow at New York University’s (NYU) Stern School of Business, and an affiliated faculty member at NYU’s Center for Data Science and Center for Urban Science and Progress. His new book The Sharing Economy was published by the MIT Press in June 2016. He has published over 50 scientific papers in peer-reviewed academic journals and conferences, and over 30 op-eds in leading outlets globally. His scholarship has been recognized by six Best Paper awards and two Google Faculty awards. He is a member of the World Economic Forum’s Global Agenda Council on Technology, Values and Policy, and advisor to numerous other policy bodies, venture capital firms and cities. He has provided expert input about the digital economy as part of Congressional testimony, and to a range of government agencies. He is a widely sought-after commentator by top media platforms.