When thy neighbour’s house is on fire…

In these last years we have seen how the urban transport company that moves more people in the world, Uber, does not own any vehicle; that the greatest content providers, Facebook and YouTube, do not generate most of their content; that the largest lodging provider, Airbnb, does not own any hotel or apartment… These are not original observations and there are a number of people using these examples to jump into the realms of Collaborative Economy. In this post I will try to relate this phenomenon to my current professional sector, Engineering Services.

The concept of Collaborative Economy is simple: connect people with something to offer with people with a need, as simple as that. You can say that this definition corresponds to the classical concept of commerce, the exchange of goods and services, and you will be right. But differently to what was happening before, now each offer can reach (with very little intermediation) millions of potential buyers with just a click of a mouse or, more important everyday, with a touch on a smartphone screen anywhere and anytime.

The great businesses of Collaborative Economy are centred on facilitating that contact, adding on top of it a measure of reliability of the seller based on the experience of previous buyers. Nowadays there are very few online buyers that decide on a purchase without looking up what other users recommend, generating a sensation of “reliability by sympathy” that it is replacing expert judgement.

As we can read in this interesting article published in Thoughts (the Knowledge platform of the British Engineering company ARUP) http://thoughts.arup.com/post/mobiledetails/523, professional services and, in particular, Engineering Services, cannot (or should not) believe that this trend is not going to affect them. Of course there are some sector specific issues that would need to be resolved like reliability and professional liabilities, but there are already some platforms along these lines in the professional services sector, most of all in the US (for instance www.upwork.com), connecting possible customers with freelance professionals

Nobody knows what will happen, but Collaborative Economy in Engineering Services can also follow the typical path of Business Model Disruptive Innovation (like the case of Airbnb). Currently, the services that these “small” competitors can provide do not have the scope, quality, resources or reliability of an established and expert Engineering company. This is the typical scenario in Disruptive Innovation, where “outsiders” with lesser quality start appearing, but incumbents and established players do not pay much attention to them, focussing on their classic business, which they do better than anyone. When they finally realise that something is happening, those “outsiders” have reached their level of competence, offering the same thing at a better price or something different but better suited to current customer’s needs; at that moment normally it is too late to react. You can see this pattern developed in the literature in cases like Kodak or Blockbuster, or you can ask the taxi drivers in our cities. However, it is possible to react and do something if you are open to understand the trends, as some traditional banks are doing with the Fintech phenomenon.

Of course, this is just my humble opinion and, as such, I can be mistaken. But if there is something I am sure about is that the only truth in modern societies is Change, an ever faster Change. We need to be able to adapt our ways to this change. As the old Spanish proverb says: “Cuando las barbas de tu vecino veas recortar, pon las tuyas a remojar” (similar to the English “When thy neighbour’s house is on fire, beware of thine own”).

The first step towards innovation is being able to recognise an opportunity or a trend; the trend is clear, so the opportunity shall be for those who are smart and quick enough to grab it…

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