Impact of trends

Social economy vs. Internet of Things

The sharing economy bets on people. The “Internet of Things” bets on machines. How are these two trends transforming logistics?

Crowdsourcing and crowdfunding, collaborative consumption: The sharing economy bets on people. Cyber-physical systems passing autonomously through networks: The “Internet of Things” bets on machines. What are your thoughts on this topic? Here are some of mine.

How logistics is joining the sharing economy

The sharing economy and the Internet of Things (IoT) represent phenomena that share a common idea: moving away from central control of processes to self-organized peripheries.

But what exactly is behind the sharing economy, and what implications for logistics and global supply chains can be identified or at least perceived? How does IoT look from this perspective? And last but not least: What is the relationship between these two movements?

Let’s go back to the first question. In virtually every area of modern logistics, someone is trying to provide services or offer added-value by sharing resources and forming networks based on collaboration: transport systems, freight rates, containers, crowdshipping, end-to-end shipping, 3PL services, fleet management, last mile, storage, and so on.

A good overview with specific examples can be found in the Collaborative Economy Honeycomb by Jeremiah Owyang – take a look.

This “honeycomb” is a kind of map of the social economy with logistics and transport at its very center. It shows that the times are long gone in which only “old” and established companies offered these services. Basically, this means that logistics has joined the sharing economy. But how does this relate to IoT?

It is worth mentioning that in line with the vision of IoT and kind of contrary to the general idea of a collaborative network, many areas of the lively sharing economy are nearly devoid of human beings:

  • Crowdshipping? Replaced by self-driving cars.
  • Quick response to sudden demand? Big data and predictive shipping manage this in the cloud.
  • Saving on freight rates? Multi-agent systems will get together and automatically negotiate for the best deal.
  • And what about inventory tracking? Beacons, sensors, and fully automated replenishment will take care of this without human input. Fully integrated and autonomously.

People vs. computers?

In other words, IoT is striving for computers to organize and communicate among themselves autonomously without human intervention. And the sharing economy points toward a similar development, except here it’s about people, not computers. Both are developing into “parallel societies” – or at least, that’s the danger.

For the time being, we – the humans – are still a step ahead. But the idea to make people redundant in various areas slowly but surely gains momentum. Very interesting indeed – let’s keep an eye on it! Connect with me on LinkedIn if you would like to discuss – I look forward to hearing from you!