We're publishing Tooley Street Research's method for measuring the collaborative economy's economic impact on households.
If you had to pick a difficult research job, setting out to better understand the impact of the collaborative economy definitely meets the brief. Not only is the collaborative economy growing fast, it is incredibly broad; its tendrils now reaching into every aspect of commercial and civic life but also because, despite many best efforts, there is still no unequivocal agreement on what counts and doesn’t count as the collaborative economy.
Despite this, there is a thirst to understand much more about its impact; at an economic, social, and environmental level and it’s clear that our knowledge won’t improve without the right tools and methods.
While there have been good attempts at calculating the collaborative economy’s overall size and value, there has been a focus on headline numbers such as overall value to the UK and global economy, or potential impact on specific commercial verticals. These figures are useful in focusing attention, but have struggled to convey its current effects on households, on different sectors and on society more generally.
As the surge in interest in researching the collaborative economy shows, there’s a growing need to find more appropriate ways of measuring activity and evaluating impact in a way that is useful and meaningful; to policy makers, economists, investors and key actors within the collaborative economy.
It’s hardly a surprise that we find it difficult to understand the current impact of the collaborative economy. Measurement and evaluation is particularly challenging in such a diverse, lightly defined and fast evolving area. We face challenges in relation to:
Common parameters - Deciding what’s in (and out) of the collaborative economy can radically affect your approach to measuring impact, and findings. Are we talking about a handful of high profile tech platforms, or a broader range of organisations engaging in collaborative activities - such as established companies, local authorities, and informal groups? Even with consistent parameters, comparing different organisations and activities is far from evident. How do you start to compare the impact of a ridesharing app to a website for swapping children’s toys or a crowdfunding platform?
Distinguishing what’s new and different - Measuring impact isn’t simply reporting what’s happening. It’s also a matter of determining how the collaborative economy differs from business as usual. How have collaborative economy models changed behaviours or increased participation in certain activities? This isn’t always apparent. Some collaborative activities may have always occurred, and simply migrated to a digital platform.
Appropriate measures - A number of social, environmental and economic impact measures exist. Some may be relevant to the collaborative economy, but have yet to be tested. Others don’t quite fit the collaborative economy’s organisational models and activities. In other words, we don’t have a complete set of methods and measures to accurately understand impact in the collaborative economy, and these will need to be evolved or developed.
Finding the right scale - The impact of the collaborative economy occurs at multiple levels; everything from impact on GDP, to hyper-local social impact on an urban community. New collaborative economy platforms may disrupt entire sectors, whilst having an impact on communities and individuals in very different ways. We need to figure out the right scale of activity to focus on – whether that’s individuals, households, towns, sectors or entire countries.
Nesta has worked with Tooley Street Research to explore these questions and today we’re launching the result of that work, which sets out one possible method for measuring the economic impact of the collaborative economy on households. Take a look.
We have chosen to focus on one form of impact (economic) at a specific scale (households) and this paper demonstrates that we there are specific and measured ways to understand the collaborative economy. In this case: participation levels and the estimated monetary value of activities. Both the method, and indeed the results of that work, we hope will contribute to the growing understanding of the collaborative economy.
The next task is to identify and develop more comprehensive methods for evaluating the collaborative economy’s impact – ultimately taking us beyond the solely economic. As these emerge, there is a wider opportunity to coordinate efforts to begin developing a comprehensive index that tracks impact across the collaborative economy. Over the coming months, we want to work towards an index for the collaborative economy.
As ever, we’d love to hear your thoughts. Please leave a message below or get in touch if you’re working on similar efforts or have thoughts on how the collaborative economy’s impact could be better measured.