The rise of the B2B sharing economy

The Nice Recession of the late 2000s initiated a societal shift, introducing the idea of the sharing economy into the mainstream. Some cost-conscious and environmentally conscious millennials eschewed possession of bodily objects comparable to costly vehicles and most popular accessing them as reasonably priced companies solely when wanted. Digital platforms comparable to Uber and Airbnb, accessible on cellphones, made it easy for people to share their vehicles and houses with others and generate further income whereas retaining possession, thus maximizing the worth of their property.

This business-to-consumer (B2C) sharing economy took off so shortly that, in 2015, PwC projected the B2C sharing economy would grow from $15 billion in 2013 to a whopping $335 billion by 2025. Quick ahead to 2021: the COVID-19 pandemic has decimated the sharing economy, which depended closely on mobility and holidays. Uber misplaced $6.8 billion throughout 2020 whereas Airbnb posted a web loss of practically $4 billion in the fourth quarter of 2020 alone.

Does this imply that the sharing economy is about to die? The reply isn’t any. The sharing economy is merely evolving from its unstable adolescent stage to its mature and steady maturity.

After enabling customers to share items and companies for the previous decade, the sharing economy—as an idea and a follow—has achieved sufficient maturity and credibility to persuade companies to start out sharing their bodily and even intangible sources with one another. In consequence, in 2021, we’ll see the rise of the business-to-business (B2B) sharing economy.

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Given its sheer quantity of transactions, this rising B2B sharing economy might doubtlessly be price trillions of {dollars}.

[Source Image: Sylverarts/iStock]

The a number of advantages of B2B sharing

By sharing their bodily and intangible sources with one another, firms can do higher with much less, that’s: generate extra income whereas decreasing prices and waste. Particularly, by sharing sources, companies can:

Scale back capital expenditure

B2B sharing permits companies to show excessive fastened prices into low variable bills. Quite than waste their treasured capital to construct new factories, industrial companies can broaden their enterprise swiftly and cost-effectively by leveraging on-demand manufacturing capability. By “renting” manufacturing capability from 1000’s of extremely specialised machine retailers, large companies can flexibly enhance their provide chain capabilities to handle demand spikes.

Decrease working prices

Healthcare suppliers in the U.S. and Europe should deal with large value fluctuation and lack of medicine and medical provides imported from overseas (as we noticed throughout COVID-19). To unravel this difficulty, these hospitals can pool their shopping for energy to enter into collective long-term buying preparations with home suppliers, therefore decreasing their working bills whereas stabilizing the supply of crucial medical merchandise. Civica Rx, to take one instance, is a nonprofit group that aggregates hospitals’ demand to cut back the price of generic medicine.

Generate new income streams

In the U.S., 30% of all warehouse space goes unused on any given day. In Asia, that determine might be as excessive as 50%. On-demand platforms comparable to FLEXE, Flowspace, and SpaceFill assist warehouse house owners earn a living from their underused amenities by renting them to Fortune 500 companies and e-commerce startups desperately searching for area to inventory their stock.

Maximize the worth of intangible property

Companies can even extract extra worth from their intangible property—which at present account for 90% of the complete worth of the S&P Index—by sharing them with others. Every year, the U.S. generates more than $6 trillion in intellectual property (IP)—patents, copyrights, and know-how. But, $1 trillion of it goes to waste annually as U.S. companies lack a transparent technique to extract most worth from their IP, comparable to new know-how innovations. These companies can use IP brokering companies comparable to yet2.com and NineSigma to make a revenue from their unexploited intangible property comparable to patents by sharing them with innovation-seeking consumers.

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[Source Image: Sylverarts/iStock]

Enhance resilience and agility

Throughout COVID-19, as buyer demand plummeted, producers—particularly small ones—have been left with idle manufacturing facility capability. On-demand manufacturing marketplaces comparable to Xometry, Fictiv, and 3D Hubs make industrial companies extra resilient and agile when markets unexpectedly shift—by connecting them quickly with new shoppers, so that they preserve their factories and staff absolutely utilized.

Innovate sooner, higher, cheaper

Massive manufacturers can use B2B sharing to completely seize the upside of innovation whereas mitigating its draw back. Take the client items business, which annually invests billions of {dollars} in R&D. But 95% of new consumer products fail at launch as they don’t handle actual buyer wants, leaving manufacturers with expensive unused stock. Quite than guess buyer preferences and depend on mass manufacturing, manufacturers might use platforms comparable to Thestorefront and Seem Right here to open pop-up shops in strategic places the place they first check a number of new product ideas with clients. Relying on which ideas are common by which geographies, manufacturers can then use on-demand manufacturing and success platforms to provide a number of well-defined gadgets in small batches and ship them quickly to numerous places.

Fulfill clients searching for end-to-end options

In sector after sector, clients are now not searching for level options—comparable to particular person services or products from distinct manufacturers. Quite they’re constructing their very own “mecosystems“—end-to-end tailor-made options from a number of manufacturers that comprehensively handle their broader wants and ship healthful expertise.

For example, to fulfill clients’ rising want for point-to-point mobility options—that seamlessly integrates car-sharing, practice and bus rides, and rental biking—transportation and mobility service suppliers might want to share knowledge on their property and clients with one another to ship a seamless expertise to their shared shoppers.

Past enterprise advantages for firms, B2B sharing can even yield important social advantages. For example, by connecting fired staff quickly with new jobs, Individuals + Work Join, an AI-powered employer-to-employer platform, shrinks the lengthy and traumatic cycle of unemployment for these staff. Equally, Floow2, a digital platform that allows hospitals to share their medical tools and companies, helps anxious sufferers get sooner and higher care by figuring out a hospital with the proper tools available to deal with them.

As the U.S. moves to value-based healthcare—which holds care suppliers accountable, and rewards them, for profitable well being outcomes for sufferers—hospitals and clinics might want to share their affected person knowledge and property with one another. By coordinating their actions synergistically inside B2B sharing ecosystems, care suppliers can ship higher high quality care to their shared sufferers whereas reducing healthcare prices.

[Source Image: Sylverarts/iStock]

By curbing waste, B2B sharing will positively impression the atmosphere too. For example, the Les Deux Rives project in Paris operates by the sustainability ideas of the round economy, enabling its 30 co-located member organizations to work collectively to cut back disposable meals packaging, mixture carpool companies, and collectively handle waste.

Convoy, an AI-based digital freight community, vies to make the transportation business sustainable. A third of trucks on the road today are driving empty. In the U.S. alone, these “empty miles” account for 72 million metric tons of CO2-equivalent emissions annually. Convoy’s Automated Reloads program, which bundles a number of truckload shipments right into a single job for a driver, might scale back these empty-mile emissions by 45%.

The B2B sharing economy affords compelling financial, social, and ecological advantages. By correctly sharing their tangible sources and intangible property with one another, purpose-driven companies could make immense good points in effectivity and agility and positively contribute to communities and the planet. The fledging B2B sharing revolution guarantees not solely to upend industries and reinvent our economies but additionally to assist us construct inclusive and regenerative societies in the post-COVID-19 world.


Navi Radjou (naviradjou.com) is an innovation and management scholar and adviser based mostly in New York. He’s the coauthor of Frugal Innovation: How to Do More with Less.

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