On-demand economy is a technology-based platform in which economic activities are created to fulfill the demands of consumers through a convenient provision and immediate access to goods and services across the marketplaces. The on-demand economy is characterized by supply driven via a highly efficient instinctive digital mesh coated on top of the existing framework of infrastructure networks.
Besides the on-demand economy, several terms like the “uber-economy,” “gig-economy,” and “sharing economy’ have been applied in different circumstances to depict almost an equally close operational relationship. This results to a conceptualization of the on-demand phenomenon advocated by Frenken et al. (2015) to be “a concept in which consumers grant other consumers temporary access to underutilized assets.” The on-demand economy has ushered in an array of benefits for both the workers and consumers through mobile connectivity which has enabled huge leaps in the marketplace transparency through a system of real-time feedbacks and ratings. For instance, a survey on the UK’s on-demand deal flow on a yearly basis gives a representation of the graph below.
Graph: UK on-demand deal flow by year.
Source: World Bank
Why is on-demand economy considered to be an economy?
The on-demand economy is considered an economy as it encompasses an entire system of the network of distributors, consumers and producers of goods and services with the, regional, local, national or the international community (Maselli & Fabo, 2015). The on-demand economy provides an avenue in which the world agents effectively and efficiently manage the available resources for the optimal production of goods and services.
Today, a growing trend is experienced among a group of entrepreneurs who strive to heighten and make a difference in the way we do business across the globe within the service industry by bringing together computer power with the freelance supplying luxuries which were once reserved for those considered to be wealthy in the economy.
How the on-demand economy is changing the current economy
The on-demand economy has been on the verge of revolutionizing commercial behavior in different market places across the world. The increase in the number of companies and the categories represented within this industry alongside the growth and expansion of eh industry is a clear indication that the on-demand economy is at a highly accelerating pace. The environment of carrying out business in this on-demand economy is a representation of the manifestation of several years of technological innovation and evolution of the consumer behavior (Frenken et al., 2015).
The on-demand economy is neither a bubble nor a short-term business trend but an on-going system of models that have unlocked the doors to the real-time fulfillment of products and services, that have been embraced by consumers at an unprecedented frequency (Horlacher & Feubli, 2015). It revolutionizes the way in which we create or transact thousands of employment opportunities or move government.
The fast-accelerating technology companies creating competition in this arena have developed advanced models which are transforming industries that have been historically considered to be sluggish to innovate. The restaurant, grocery and transport industries are key examples of the hyper-growth sets within the on-demand economy –for instance experiencing growth as a result of the application of the new technologies on top an already existing system of infrastructure.
The on-demand economy has accelerated the aspects of improved sector-demand for services which have boosted competition and opportunities for workers (Hanna, 2016). Presently, marketplaces are capable of aggregating the demand that d has been historically difficult or greatly fragmented to reach as a result of global limitations. Similarly, the ability to internment the data and locations of customers has enabled the services providers to respond to their user base via real-time and thus creating greater customization.
References
Hanna, N. (2016). Mastering digital transformation: Towards a smarter society, economy, city and nation. Bingley : Emerald Publishing.
Horlacher, J. & Feubli, P. (2015), “What’s the value added of the sharing economy?”, Global Investor 2.15, Credit Suisse, November.
Frenken, K. Toon, M. & Martijn, A. (2015), “Smarter regulation for the sharing economy”, The Guardian, 20 May.
Maselli, I. & Fabo, B. (2015), “Digital Workers by Design? An Example from the On-demand Economy”, CEPS Working Document No. 414, CEPS, Brussels, October.
