Are We Moving Towards An On-Demand Economy?

(Akiit.com) In 1960, MIT was the home of one of the only computers in America. The computer was the size of a sports hall and it cost millions of dollars to build and run. Only a privileged few had access to it and they had to book their usage, months in advance.

Then things began to change. By the 1980s, computer circuits had been miniaturised to the extent that they could fit in a consumer-friendly box. IBM and Apple started building personal computers for the home market, never imagining how they might develop.

Over time, the services offered by computers have gotten closer and closer to our needs. In the mid-2000s, technology had progressed to the point where computers could fit in an object the size of our hand. And that meant that users could access content from practically anywhere.

The trend was clear. We were moving from big computers that were hard to access and only experts could use. And towards a situation where any kid could pick up a smartphone and use it to fulfil their needs instantly. In other words, we moved towards what economists call an on-demand economy.

The implications of the on-demand economy go far beyond the possibility of downloading the latest version of Angry Birds. It’s a trend that is having a significant impact in the world of business too.

Companies are finding that on-demand platforms allow them to organize supply chains better. Businesses have a growing appetite for the speed, convenience and simplicity that on-demand brings. They’re able to order in the extra capacity as they need it. They can outsource certain tasks during peak hours. Then can order in temporary equipment, such as printers from companies like Grangewell Management Ltd. And they can even set up virtual offices that they use for maybe 10 hours a month.

The on-demand concept isn’t something that is entirely new. The idea has been in the works since at least the late 1990s. Back then there were companies, like Webvan, that attracted investment money. But what is different today is the ability of the infrastructure to sustain such an economy. Whereas before it was risky going freelance, now freelancers can spread their risk. They can establish multiple relationships with different companies and take on as much work as fills their time.

Hundreds of companies are benefiting too. They’re often scarce on time but rich in money and hire freelancers, for whom the opposite is the problem. Thus, businesses avoid paying for labor they don’t need.

Now that we are always online, our economy is destined to become on-demand. Purchasing decisions in the digital space can happen in an instant. And this means that companies which still must operate in the real world, have to react in an instant too. Companies like Uber and Airbnb are already ahead of the curve, providing services as and when they’re needed. But it’s likely that this business model will become the dominant one in a world where consumers can buy whatever they want with the click of a button.

Staff Writer; George Jones

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