Recommended: Verdienmodel 2.0
Next economy glossary: kernwoorden van economie 2.0
Artikel: 'Changing role of money.'

future

the art of ageing

beyond consumption

healing

age of change

wellness

economy 2.0

globalisation

Marie-Claire Aarts

Verdienmodel 2.0
Handboek voor degenen die op zoek zijn naar nieuwe verdienmodellen.

Next economy glossary

Out with the old, in with the new

We are at the brink of new times, some call it the People Age, to follow first the Agricultural Age and then the Industrial Age. Some claim the new Millennium has only now truly started. Whatever the name, it is obvious that a period of unbridled mass consumption and a grabbing culture has reached its zenith, severely damaging our planet and that a system that has worked well for us for more than a century has collapsed. These are historic times.

Interestingly, it are no longer only the leftwing anti-globalists who say so, but heads of state, multinationals, corporate thought leaders, all are coming to the same conclusion: something has dramatically changed. We cannot go back to what it was.

This is bad news for many people, because certainties have evaporated. It is good news for those who thrive on changes: in the end, a better, more sustainable world will appear. Meanwhile though, there will be a lot of suffering. After all, the change of a system always hurts.

Social innovations

Coinciding with the financial crisis, even preceding it, are many social innovations. All over the world there are gatherings, brainstorm sessions and networks communities, where people exchange their thoughts on how this next world will function – and putting these ideas into practice.

What I noticed during such meetings is the ambiguous way money is mentioned. We always took money for granted and surely it will always be here in some form and making money is still very acceptable. Yet many of these people, the thought leaders, pioneers perhaps, get things done without money changes hands. Moreover, monetary rewards are would severely disrupt some of the transactions.

Many brainstorm sessions, for instance, take place in unique locations, that are usually offered for free. Attendance tends to be free, yet participants usually don’t get paid for their contribution either.

Co-creation and crowd sourcing is the norm: you give your own thoughts, for free, and get other interesting ideas in return. Dividing is multiplying.

People are active producers rather than passive consumers. Intellectual property is irrelevant, would even block this entire co-creation concept. You no longer own ideas.

Giving is the new taking

This is beyond a traditional barter trade, which could still be valued, measured. That was an exchange of comparable goods and services. Couch surfing and similar social innovations, however, can in many aspects not be measured and might be unequal moneywise. The host gives much more than just accommodation, he or she gives trust, care. The guest may or may not return the favour by paying for an evening out. Often there is no direct reward apart from a small gift. The guest, in turn may open his home to other people, yes. But then again, he might not.

So then what makes people opening their house to complete strangers? To trust. To give. Does altruism exist after all? Personally I don’t believe in altruism. Have we suddenly become philanthropists? Some initiators and participants of new social interaction that is based on giving may actually very well be philanthropists.

Usually though, there are actually quite a few transactions that take place during a couch surf. The couch surfing host may be bored, lonely, in need of inspiration, energy, lacking international input. There may be instinctive and unsatisfied basic need to give, to care. These ‘energy transactions’ are very real – it’s just that they do not have a monetary component.

There are probably other incentives such as being and feeling part of a group, a community. There also has to be relevance and a fun factor is usually part of the package. They may hope to meet peers, partners, new friends. Then again, they may not. In my own couch surfing experience, that is fine and very acceptable too.

It is elitist though, you need to have something others want: innovative ideas, a good attitude towards sustainability, an inspiring and giving personality or other qualities. You need to be a valuable member of the community. After all, you are giving too; you need recipients in this social barter. That might mean in the next economy more is based on the type of person you are, how you behave. But in a way that is really nice: it may force people to have a good look on themselves. This might be another social innovation: if you are egocentric and selfish, society might reject you.

The challenges

Such social barter lifestyle has its limitations. How do I pay my mortgage? A possible answer could be changing ownership concepts. But then, what will that be like? And imagine the complications of such lifestyles for tax collection. If money is legally sidestepped by a substantial number of people, it will be much harder to collect taxes.

There is a distinction between formal and informal networks. Formal networks are more likely to be taxed than informal networks, which are also harder to trace - impossible to trace in many cases. Who, then, will pay for our elderly when they need care, our infrastructure, our school system?

Then again, we did not really know how to finance our aging babyboomers anyway. Perhaps a new system can solve this unimaginable crisis in the making.

The above limitations are what I call the black hole. Somewhere along the line someone has to pay hard currency – or do they? An answer to what will be in the black hole, to what the business model of the new age will be is the holy grail of the present times. Those who are the first to find the answer will be the successful ones of the next economy. The answer cannot be advertising. It has to be more than that, because the ad market is not growing.

The situation is similar to the ascent of the Internet: everybody knew it would dramatically change our world, the economy, the way we live, communicate, work. But only few people fathomed what the business model would be – or were lucky enough to be on the right track. These are the successful companies of today. The successful companies (or social networks or linked individuals) of tomorrow will be those who will truly understand the new role of money.

Meanwhile of course, we are presently witnessing many experiments – many of which will fail. And some will not ‘get it’, stuck as they are in the old ways, and be sidetracked. Some will be winners.

The gains

What, then, are the practical applications of these thoughts for companies? I strongly believe that those companies that can tap into this new way of thinking will be the ones to be successfully involved in the next economy.

I would argue that, as this is a system that is for a large part based on giving and trust, it can no longer be exploited in the old sense of the word. The challenge will not only be to identify these next opportunities, but also to find new ways to relate to and interact with these new social-based networks, communities and consumers.

This truly is today’s holy grail.

Some examples

Examples of companies that have already implemented the above effectively are Google (recently turning into the bad guys now they are taking too much), Facebook, Boomerang cards, Wikipedia, youtube.com. All open-source software such as Linux are based on the same ideas: co-creation and free input. Dutch experiments with new money are Noppes, Qoin, and 95 other Local Exchange Trading Systems (LETS).

Marie-Claire Aarts

Work in progress
Input is welcome at: info@zenz.nl
November 2008

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