Uncommon Commons

Manufacturers can learn key lessons from the rise of “collaborative commons,” those emerging economic models based on cooperation and sharing.

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Many pundits are debating whether “collaborative commons” will soon rival and perhaps replace an economy dominated by marketplace transactions. This is the end of capitalism as we know it, some say. “Collaborative commons” is a term for the way people use the Internet to share products and services such as news, entertainment, education, car rides, lodging and other assets that were traditionally bought and sold by commercial providers. News publishers, hotel chains, taxi companies, educational institutions and the entertainment industry have lost significant business to this development.

Some futurists predict that this technological infrastructure will enable ordinary people to share homegrown food, excess energy from rooftop solar panels and manufactured items that can be produced on household 3D printers. Participants who create virtual pools of high-end clothing, fashion accessories, toys, and other items that can be rented or swapped are part of this trend. These transactions can be conducted almost for free, and perhaps on a massive scale via social media, bartering networks or distribution clubs.

Notable theorists attribute the rise of the collaborative commons to the concept of “zero marginal cost.” In a nutshell, this is the idea that the Internet and related technology help reduce the cost of making “copies” of something to nothing or next to nothing once the initial fixed costs of producing the original have been met.

Collaborative commons have emerged most prominently is in sectors where fixed costs for producers are very low to start. What does it take to write an informative article, create new music or capture a college lecture and post it online? The cost of raw materials is negligible and charges for access to the digital infrastructure that enables collaboration and distribution are minimal. The opportunity to share and share alike with other providers working cooperatively in these commons is a bonus.

What does this mean for the manufacturing industry? I think the impact will be transformative, but not as drastic as one might imagine. This is not the end of capitalism. The fixed costs in manufacturing are extremely high. The capital equipment involved requires a huge startup investment. Today’s highly productive machine tools and flexible systems are steadily moving toward lower and lower marginal costs as they become more automated. Greater efficiencies in the supply chain are clearly on the horizon (thanks to developments such as cloud computing and Big Data).

However, we have seen examples of open-source production and collaborative manufacturing such as the vehicles built by Local Motors at the International Manufacturing Technology Show (IMTS). Likewise, crowdfunding and crowdsourcing have enabled newcomers to enter manufacturing that otherwise would have been excluded.

What existing manufacturing companies ought to do is consider how they can develop collaborative commons of their own in which sharing, pooling of resources and cooperative ventures can help reduce costs and boost productivity.

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