The Fourth Industrial Revolution - (Part 1) The Sharing Economy.

There is a new economic model that is emerging called the sharing economy (or shared capitalism). This model represents what very well could be the next evolution of capitalism. As a society, we have recognized cretin

social pillars as necessary to preserve our society. The information age has made a significant contribution to those as it threatens to tear down others. Its contribution is a vast communication network that has connected all of us in ways never dreamed possible just a few hundred years. This network is built on the back of a technological marvel of interconnected computers, satellites, and servers containing the whole of humanities combined knowledge and providing multiple platforms for individual expression, knowledge accumulation, and social networking. With this societal pillar, unlike the traditional, has taken the power from the collective and redistributed it to the individual. It has opened the door for profitable near zero margin businesses such as Uber.com, Ebay.com, just to name a couple. Previously most businesses integrated horizontally. this meant that their share of the market was tied to the accumulation of their assets and they are not reliant on the general public for anything prior to the purchase of their product or service.

The term margins has multiple definitions depending on who is using it but generally in a commercial business setting it is the difference between the seller's cost to acquire the product or service and the selling price and is expressed as a percentage. From that margin, the business must cover all costs associated to provide the product or service such as shipping, storefronts, employee compensation, utilities, etc. Otherwise known as overhead. The problem with horizontally scaled business plans is that they have a very high overhead so they must price their products or services in such a way as to have a high enough margin so that they can cover all the cost of doing business and still make money. With the development of this new societal pillar, technology has opened the door for near-zero margin businesses. Where the horizontal scaling model requires greater overheads to operate, the vertical scaling model utilizes the communication and information infrastructure of today's world to engage the general public in more aspects of their overhead costs. A good example of this is Uber.com. Uber provides transportation much like traditional taxi services. The difference is that they do not have to have a fleet of vehicles, drivers, managers, and maintenance personnel that traditional services require to operate. Their storefront is not a physical location. It is spread out across this digital communication network. Their cost to provide the service is minuscule compared to the traditional providers. This translates into greater profitability at a lower cost to the general public. I felt it was important to define the differences in the two models as much of the following content is dependent on this idea becoming viable to more industries as driven by new technologies.

For Part Two Click Here.