The co-economy opportunity

Despite unprecedented turbulence, the co-economy continues to blossom, redefining work, rest and play, transforming how we will drive profit, define “value” and unlock opportunity in the future.

It has been a turbulent year for the co-economy (co-living, co-working, co-sharing, co-leasing and co-culture). In 2019, co-economy brands like Airbnb were riding high – the property rental company had a valuation of USD 31 billion and enough cash for a private listing. But in 2020 the coronavirus pandemic took hold, the biggest disruption to the travel industry since the 9/11 terrorist attacks.
 
By summer, the outlook for the co-economy wasn’t good, with public spaces turned into no-go zones, travel bookings decimated and much of the world forced to retreat inside. But while many assumed that the arrival of the coronavirus pandemic would herald an end to the co-economy – who wants to share something that might have been sneezed on? – it is flourishing once again, with a swift recovery illustrating the enduring appeal, resilience and potential of co-economy brands.

From sharing economy to co-economy

In the 2010s a new kind of company emerged. Entrepreneurs observed untapped commercial potential in underused assets, from gardening equipment and boats to car parking spaces and pets. In this fledgling sharing economy, digital platforms connected those who wanted to hire or borrow things with those who wanted to rent them out. “Access versus Ownership” became the rallying cry of a generation of consumers who were sick of buying things they didn’t need or seldom used. But the principles of sharing culture have now broadened and evolved into the co-economy, where society’s penchant for sharing is pervasive.
 
The evidence is everywhere: consider how co-working spaces like WeWork, rentable by the day or month have – for many companies – replaced the need for a full-time office. Or how architects such as Foster + Partners and Carlo Ratti are experimenting with models of co-living with social cohesion designed in. Or how prestige items such as luxury clothes (Rent the Runway), furniture (Harth) and works of art (Rise Art) are being rented and leased by consumers mindful of the environment as well as their wallets.

Co-economy growth areas

While initially threatening its existence, the fallout from the coronavirus pandemic has provided the co-economy with new areas for growth. Hemmed-in city workers are spilling out of towns to work remotely from far-flung locations, while organizations continue to embrace digital. Innovators are now using co-economy principles to roll out new offerings that address these changes.

But perhaps most significant is the shift to remote work. According to a study by the New York Times and Morning Consult, one in three Americans would relocate if remote work continued indefinitely, creating new hinterlands of opportunity for co-economy concepts beyond the city limits. This can provide a vital reboot to regions that have suffered brain drain into cities and help unlock the digital potential of rural areas – in the UK alone, this development could add up to USD 34 billion to the economy annually, according to Rural England.

 
In the future, remote workers will be able to eschew location permanence in favor of traveling the world – Barbados, Bermuda and Estonia already offer remote workers visa-free stays or specific remote work visas – relying on the co-economy, from co-living spaces to clothing rental, as they work, rest and play in different locations.
 
These concepts represent a new idealistic form of consumption – one driven by principles of community and sustainability. But the co-economy has also drawn criticism in recent years, with some saying that this new way of doing business is a form of hyper-capitalism where overheads are cut and workers disenfranchised. Such criticism should be kept front of mind and safeguards communicated to consumers, ensuring the co-economy can harness these new growth areas and continue to blossom.