- 24/03/2016
- Category: Commentaries
I personally have always been enjoying Prof. Rhenald Kasali’s writings that are undoubtedly sharp, contemporary, and provoking. Despite that, this time I encourage myself to get in the discussion, responding the writing to enrich our discussion on the very talked-about topic.
First of all, I disagree with the use of the term ‘sharing economy’. I prefer using the term ‘digital collaborative consumption’, which will later be shortened to DCC.
Second of all, DCC is only a small portion of a bigger development; the rise of ‘digital society’. To understand the bigger picture helps us to reproduce more comprehensive solution.
Thirdly, in a more fundamental logic, these recent phenomena are more understandable as the consequence of the strengthening ‘digital society’ which pushes establishment of ‘perfect information’ and results in efficiency.
Let us discuss this one by one. Sharing economy is not a new terminology and has become ubiquitous in describing such phenomenon brought by Prof. Rhenald. An article in Forbes, for example, used the term ‘the share economy’ to describe Airbnb; another article on Fortune used ‘the sharing economy’ to illustrate Uber. All of the above assumed that this term represents such economic activity that is more of a peer-to-peer-based-sharing in accessing goods and services conventionally or digitally.
For me, if an economic activity involves producer and consumer that are facilitated or mediated to have the buy-and-sell conventionally or digitally, it is not ‘sharing’, but ‘selling/buying’. The context shown by Prof. Rhenald as ‘the tradition of our elderlies living in the sharing system’, is indeed closer to the concept of ‘sharing’. However, the use of these modern applications is closer to the concept of ‘sharing/buying’.
Here, I am more in line with an article on Harvard Business Review that also criticizes the use of ‘sharing economy’. The difference lies on the fact that they use the term ‘access economy’ instead of DCC, more specific term I propose. I believe there are more and more scholars correct the use of such term, like what John Nughton wrote on his critique on the Guardian.
I specifically pick the DCC term because it better represents real phenomenon, and that this phenomenon is more of a consumption process of services and goods that is collaborative and digitalized. In other words, there is a collaboration between these three groups: the everywhere seller, digital facilitators, and consumers. Thus, this DCC, or in the term used by Prof. Rhenald, ‘sharing economy’, is able to explain the phenomenon of Airbnb, Go-Jek, Bukalapak, Igrow, and the likes, but is unable to bring up the larger context and the more forms of varying digital applications.
Digital Society: In The Larger Context
Like it or not, we are entering a new social platform called the digital society. Quoting the GSMA Intelligence, digital society consists of three pillars; digital citizenship, digital lifestyle, and digital commerce.
Digital citizenship moves very quickly, coloring the dynamics of state and people relationship. It is not strange to see that the Ministry of Home Affairs is being busy with the development with digital identity, or a more familiar term, e-KTP. Ministry of the Empowerment of State Apparatus and Bureaucratic Reform and the Ministry of Communication and Informatics are also going forward with the current making of e-government roadmap. Meanwhile, cities and their government are racing to champion the development of e-services, like e-health, e-education, and so forth. Helen Margetts calls such phenomenon with Digital Era Governance (DEG), the one that has been taking over New Public Management as the prime public policy concept these couple of years aback.
This new pattern of interaction has also been strongly articulated in the digital lifestyle with the growth of digital literacy, or the growing number of people with strong internet literacy. Many digital technology is no longer able to curb internet penetration to people in all ages; from toddlers to the elders. So it is inevitable to see the rise of more new terms, like Internet of Things (IoT) that attempts to widen the use-power of internet to many aspects, like the connectivity of things virtually, remote control system, and data-sharing system. Small talks of “Internet illiteracy is not cool”, “Not using smartphone is old” are becoming very common. Internet becomes lifestyle that is highly inevitable.
How about digital commerce? If we look at the middle class in cities, everyone knows mobile payments. With couple of ‘clicks’, payments and transactions are done without the need of going outside to the ATM machine or queueing in cashier lines. Online shopping sites are everywhere these days, with housewives being able to run business from her phone, are small pictures of e-business and e-entrepreneurship. I believe the context discussed by Prof. Rhenald is more related to the last pillar, digital commerce. In other words, DCC or the so called sharing economy is a form of digital commerce.
Then next question is: Why does such development is not curbed, but becoming popular instead, and attracting many even the government? Even Prof. Rhenald put it as a natural process, something that is very hard to avoid. If DCC is already able to explain the small fragment of the phenomenon, let us see further about the concept of ‘perfect information’, whether it is able to explain the phenomenon of digital society in a larger context.
Perfect Information and Efficiency
The concept of Perfect information derived from classical economic theory will be ‘borrowed’ to explain the development of digital society. In a simple manner, we (or any institutions), must forego decision among variety of policy options. The more information available, the less uncertainty will prevail. In other words, uncertainty can be effectively pressed and they can get more profitable decision or policy. The more profitable decision is eventually resulting in efficiency in many forms; time, energy, money, and the likes.
Let us use such abstract logic to explain digital citizenship, digital lifestyle, and digital commerce (DCC included). E-health in Surabaya, for example, is able to provide more complete medical records of the people, and the records are accessible anywhere anytime by doctors or patients. Even in the development, it is expected that doctor appointments can be made through online platforms, without patients queueing in health cares. This illustrates how perfect information is making information more perfect, and reduce uncertainty, making government and people working a lot more efficiently in many ways.
It is also seen on the use of Olue by the people of Jakarta: the increasing complaints are managed systematically, the uncertainty on public issues is decreased. This leads to more effective policy brought by the government of Jakarta.
This logic may also help the explanation mentioned by Prof. Rhenald on the cost of taxi that is priced 70.000 rupiah instead of 150.000 rupiah; or the cost of one room in a hotel that is priced 200.000 rupiah instead of 1.000.000 rupiah, and so on. Perfect information does not only explain the cheaper price, but it also explains another efficiency produced by DCC, including efficiency of time, energy, money, and mind.
In this case, digital tools make information about demand and supply of transportation services more perfect, resulting in efficiency.
Let us compare: waiting for taxi by the road, and using application to order taxi. It is almost true that the use of application brings more efficiency, or in Prof Rhenald’s words, the price is a lot cheaper. Also, we should not be bothered by waiting for a taxi by the road, since we can always wait for taxi while lying on an air-conditioned room in our house. Waiting time and estimated arrival time to our destination is also perfectly calculated, easing us in making appointments with our colleagues.
Despite the challenges in the development of digital society in Indonesia, like the uncertainty of infrastructure, regulatory constraints, and conventional culture of the people, I concur with what Prof. Rhenald mentioned; that there is no reason for the government or the conventional provider of service and good to not adapt with this huge efficiency opportunity.
Dedy Permadi
Managing Director, Center for Digital Society (CfDS) Fisipol UGM
Article also published on Kompasiana, 23 March 2016
