WEconomy The Economic Miracle on the Internet of Things
WEconomy is a portmanteau that incorporates us into a new, sustainable economy. So what is it really all about?
Economic growth and globalisation have long been seen as economic panacea: a growing economy and cheap production are supposed to result in prosperity for all. But as the weaknesses of our global economic system are increasingly apparent, the voices advocating for a sustainable and responsible economic system and calling for radical changes have grown louder. Supporters of the WEconomy are pushing back against the exploitation of labour and resources, the ruthless overexploitation of the environment, and the resulting massive environmental damage. They are not looking to political solutions or laws to achieve their ends, and are convinced that the necessary change will come from the private sector. The time, they argue, is ripe for business models that assume social responsibility.
Putting “we” at the centre
The term WEconomy describes a sustainable economic system based on technological progress and entrepreneurial creativity. As a response to the disposable economy of recent decades, the WEconomy stands for a system in which production and consumption conserve resources, and consumers share instead of buy, and use instead of own.
Proponents of this theory point to signs that this turnaround has already begun - initiated by innovative start-ups whose business models are driving social improvement. The Internet of things (IoT) is essential to this development, as start-ups often rely on apps or interactive online communities.
Experts agree that IoT is well on its way to revolutionizing our daily lives. Silicon Valley investor Scott Weiss predicts a world in which, “doors open when they sense our approach.”
While this vision of the future sends a shiver down the spine of many a data protectionist, proponents of the WEconomy focus on the inherent potential for greater efficiency and sustainability. As our daily lives grow increasingly networked, they cite six recent trends that could fundamentally transform the economies of tomorrow.
Six steps for a better economy
Unlike linear production systems that require an ever increasing inflow of resources, the WEconomy a targets circular economy in which products can be recycled in an endless loop. Many start-ups are already incorporating this idea into their business models, such as the architects at Danish 3Xn. The company saves 95 percent on energy with its robot-assisted method for making new buildings out of old bricks. The “cradle-to-cradle” principle is another variation of this approach, and describes a product lifecycle in which waste materials are efficiently and ecologically transformed back into raw materials.
The second trend is the idea of a “functional economy” in which products are increasingly being replaced by services, and consumers pay for a functionality instead of for an object. The popularity of car sharing apps is an excellent example. They allow people to book individual trips instead of buying an entire car. Car sharing reduces the overall number of cars a society needs and lowers the environmental burden of production and maintenance.
The third WEconomy trend, a bio-based economy, derives potential from the latest molecular science findings. From biodegradable paint based on microalgae to car tires made of dandelion rubber, researchers are developing biological alternatives to fossil fuels and chemical substances with practical applications for almost every industry. These conserve natural resources and pollute the environment much less than conventional materials.
Collaboration is another component of the WEconomy. When several companies join forces to achieve a common goal that benefits everyone, they are working together in the spirit of the WEconomy. The German Too Good To Go start-up is one successful example. Restaurants use the app to advertise reduced prices on any food still left over just before closing time. This concerted action reduces food waste and provides local restaurants with more income. Founded in 2015, the company reports it has “saved” 4 million meals in just the first three years.
The best know area of the WEconomy is likely to be the sharing economy, where people share their possessions to promote more efficient use. The Airbnb living space platform illustrates this principle. Users can sublet their flats to travellers when they are on the road themselves, resulting is less vacant living space overall.
The final building block of the WEconomy is a variation on DIY: self-production or build it yourself. 3D printers and open source code make it possible to design and make more and more products at home without involving investors or industrial production facilities. As an added bonus, the 3D economy means the producer is also the consumer, saving on CO2 emissions from long transport routes.
Heading towards the WEconomy
In many respects, we are already well on our way to realizing the WEconomy. More and more start-ups are developing sharing and collaboration apps, 3D technologies are becoming increasingly sophisticated and bio-economics is discovering new environmentally friendly production methods. Most important of all, at least according to a study by the PwC consulting firm, lots of people are taking advantage of the new opportunities and companies. Technical progress in the form of the IoT will continue to drive development forward. If all these trends develop and grow stronger, they can contribute to a greener economy.
However, as the example of AirBnB has shown, new ideas go hand-in-hand with new problems. In some cities, flat sharing has become so lucrative that entire apartments have been converted into holiday accommodations, driving prices up and availability down on living space. AirBnB is creating a new social problem, where holiday demand is displacing a city’s poorer inhabitants to the outskirts.