GREEN ECONOMY AND THE SHARING ECONOMY; Strategic Integration in the Age of Social Innovation

Functioning as a new counterpart to traditional economic paradigms, the Green Economy is a rapidly evolving economic model in which public and private initiatives help support business practices, public policies, and social programs for stimulating economic activity, while yielding returns that extend beyond the measure of traditional growth metrics which are typically based on per capita GDP. Instead of only measuring direct financial returns, a Green Economy model incorporates the tangible and intangible benefits related to environmental quality, resource conservation, and social welfare, while supporting the tenets of sustainable development. Despite criticism by advocates of traditional economic models that a green economy is doomed to financial failure, innovative business owners and government agencies are demonstrating that incorporating these priorities into the structural DNA of a growing venture can ultimately result in higher profits and extended growth. This is due in part to changing trends in consumer preferences and the corporate landscape, evidenced by companies’ growing efforts to demonstrate to the public that they are behaving as responsible corporate citizens. These companies have realized that this behavior will be rewarded with a loyal and expanding following of like-minded investors and customers, bolstering the likelihood of long-term success.

Participating in the New Green Economy panel discussion at the San Francisco Earth Day celebration was a valuable opportunity for me to engage in a dialogue about policies and trends in sustainable development with a group of leaders in the field. The panel included Alan Tratner & Lielle Arad, authors of Green to Gold; Greg Wendt, author of Responsible Investing; Maggie Winslow of Ecological Economics and the Presidio Graduate School; and Kevin Danaher of the San Francisco Department of Environment. As part of the panel, I explained the work of the Bay2Rio+20 Initiative, which is spearheading the San Francisco Bay Area’s efforts to build collaborative bridges between the Green Economy innovation centers of Brazil, the United States, and beyond. The Bay2Rio+20 team is a group of entrepreneurs, activists and innovators working to promote city-scale leadership around global green economies, sustainability, and social innovation, creating opportunities for collaboration between governments, private corporations, NGOs, and individuals engaged in global dialogue about environmental stewardship, social justice, and poverty eradication.

Earlier in the day, I attended a panel discussion about the Sharing Economy, which addressed the rapid evolution of web-based platforms networking consumer-to-consumer cooperation for the sharing of products and services. Panel participants from companies like RelayRides, Getable, and ZimRide underscored how the practice of sharing resources is evolving among consumers as a means to reduce consumption, build community, and develop alternatives to traditional consumption-based models of economic growth. From a profit standpoint, the success of this new economic trend is indicated by the fact that it has drawn the attention of government officials who are now exploring ways to develop a system of taxation for what is often otherwise an informal market activity. The discussion demonstrated how Sharing Economy trends have a key part to play in the new Green Economy. The Sharing Economy has a number of advantages that are consistent with Green Economy objectives:

  • Sharing everything from tools, to recreational equipment, to vehicles, reduces the need to purchase these items, saving consumers money while efficiently maximizing the utility of the item in question and thereby reducing production resource consumption;
  • Sharing products within local communities reduces the use of resources related to packaging, transportation and storage that are integral parts of traditional production models;
  • The communication and social interaction that is part of the Sharing Economy reaps intangible benefits related to improved social cohesion, networking and a sense of community stewardship;
  • Ride sharing and other transportation oriented sharing models help lower the total number of vehicle trips by creating viable alternatives to owning a vehicle, thereby reducing road congestion, air pollution, and our dependency on fossil fuels;
  • The growing mainstream appeal of sharing resources is helping shift our consumer-based culture towards a conservation-based culture where pooling our resources to reduce consumption is a tenet of our daily lives.

Aside from the conservation and social benefits of sharing consumer products, the services portion of the Sharing Economy is having a direct impact on innovation in the Green Economy by helping nascent startup companies to minimize operation and logistics costs so that entrepreneurs can instead focus on growing their customer base and scaling their business. Companies like TaskRabbit and SkillShare offer alternatives sources for labor and knowhow on a task-by-task and skill basis. Coworking spaces like TechShop and The Hub offer inexpensive alternatives to leasing office space or purchasing costly manufacturing equipment for building prototypes and early production runs. The viability of the Shared Economy is demonstrated by the fact that in each case, these companies are one of many in their sector, competing for the expanding opportunities in the sharing marketplace. Companies like Kickstarter are even using shared funding models to directly finance startup ventures. But, because Green Economy returns are not always measured in financial terms, getting seed funding for a promising social venture or green technology can often be extremely difficult. In these cases, the cost saving offered by shared resources can mean the difference between a truly innovative green technology idea making it to the market place, or dying on the vine from a lack of early stage financial support.

Everywhere we look, innovative thinkers are combining their individual creativity with connection technologies, in the form of internet platforms and applications, to respond to the economic challenges that we are currently facing. As the tools and techniques of the Sharing Economy and the Green Economy grow, established business owners, entrepreneurs, policy makers, and consumers alike are finding new opportunities to collaborate and cultivate new economic opportunities, demonstrating that as we shift towards economic models that place an appropriate value on the tangible and intangible benefits that traditional consumption-driven and GDP-based models fail to recognize, economic growth and financial prosperity can be achieved while still protecting our environment, reducing natural resources consumption, and growing our sense of community.

Re-posted from ForeFront CSL blog; originally published by Greg Delaune

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