Review of Environment, Energy and Economics - Re3 When Collaboration becomes Value Creation. A New Relationship between Companies and Citizens
 

 

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Nov
07
2013
 
When Collaboration becomes Value Creation. A New Relationship between Companies and Citizens
by Ilaria Pais
Economics - Articles
 

This article examines the rise of a new consumer that inaugurates, along with enterprises and institutions, a model of citizenship based on responsibility and greater awareness of emerging global challenges. Citizens and enterprises are now becoming partners of a collective commitment that aims to generate a positive impact on society. Citizen Consumers are in fact requesting  more responsibility, understanding and involvement from companies, and this contribution postulates that dialogue, collaboration and engagement could have the power to transform the traditional model of Business Sustainability into a more innovative and modern paradigm. 

Keywords: Consumer, Citizenship, Sustainability, Business Ethics, Common Goods, Web 2.0, Collaboration, Social Innovation

JEL classification:  A13, D11, Q01 

Suggested citation: Pais, Ilaria, When Collaboration becomes Value Creation. A New Relationship between Companies and Citizens (November 7, 2013). Review of Environment, Energy and Economics (Re3), http://dx.doi.org/10.7711/feemre3.2013.11.001


The new culture of consumption
Today, in our society, the citizen consumer appears pragmatic and informed, with a solid background knowledge and a sharp critical sense, connected to the world, thanks to powerfully socialising technical tools, and responsible towards other people and future generations.

Over the past decades, the intransigence with which the consumption society has become established in our society and in our lives led initially the more informed and aware part of society, and then an increasingly broad segment of the population, to debate the importance of one’s daily actions, and eventually to consider the wider consequences for human development and the impact this has on social interactions and on the natural environment.
 
The “new citizens” are now subjects who know and are aware thanks to their access to sources of information they consider reliable and worthy of trust, but above all they are people who want to take action and leave a trace of their contribution in the building of a better future for everyone. A revolution is ongoing in the way of consuming, as well as in the way of being citizen consumers, which assuredly draws strength from the culture generated by the economic crisis and which offers itself as a possible solution to the crisis.
 
According to Accenture, about half of consumers (51% of a total of 10,000 people interviewed in 10 countries in 5 continents) consider the environmental impact of a product or producer before purchasing more than they did three years ago. This makes clear the strong interest in environmental sustainability, which has been the centre of attention of the international debate for a long time and now seems to reach the perception of private individuals with some force. Citizens are more aware of social issues, such as supporting growth in developing communities, combating inequalities, access to opportunities and support for disadvantaged social classes, which awakens in them a sense of the society that has not been lost.

The change that we have described so far insinuates itself into people’s daily lives and into their social identity, but it has its greatest expression in the economic market, influencing the relationship between “demand” and “supply” in an increasingly radical way. In Italy, in particular, the public crisis and the consequent condition of disintermediation carried out by national and local governments have led to the attribution of an increasingly important role to the growth opportunities of the country that lie in companies’ tangible and intangible resources, and in particular, in their desire to listen to the reality that surrounds them and respond to the changes that are taking place. The information provided above has shown the extent to which pressures from “below” have become stronger in recent years, but at the same time the companies themselves have become vectors of awareness which has led them to follow a path to create shared and collective value. "Stimulating global growth, understanding the changing consumer" are the challenges that companies must face to generate significant economic and social progress in future years. This is the conclusion that emerges from the Accenture report, which estimated that the business sectors that become more receptive to the change in consumer behaviour will enjoy a growth in opportunities of some 2.4 trillion dollars in the four year period 2012-2016 (Accenture, page 6, 2013). 

What is the level of awareness with which companies are responding to social change? In what way do they include this in their business culture, deriving from it strategic action models for themselves and for others? Accenture found that almost three quarters of the managers interviewed (74% of a total of 600 interviewees in 10 countries) did not fully understand the changes in consumers and an even higher proportion (80%) thought that their companies did not fully exploit the opportunities that these transformations present (Accenture, page 6, 2013). So the limits lie in a question of “approach”, in a culture that is not adequate and not planning for the future; but attention should also be paid to the widespread resistance – particularly in more traditionalist countries like Italy - to the use by enterprises of innovative technological tools to come into contact with their territories and their citizens. In the last three years, in the developed markets, online interaction between consumers and companies has increased by 25%, a clear contrast to the 62% found in emerging markets (Accenture, page 6, 2013). Citizens are starting to ask for more ethics and responsibility and now – through new forms of consumption – they are also manifesting a desire for involvement and participation. 

Businesses and the challenge of collaboration
Citizens’ sense of participation and involvement in global issues is changing into an active, political consumption loaded with messages and signals. It is the strength of the society and of collaboration that prompts people to take action for something bigger and which feeds their proactive spirit. 

With the growth of awareness and the market crisis, a third factor has contributed to the rise of the active and present citizen: the spread of digital “socialisation tools”. They take the credit for having given life to a “connected” citizen consumer who, while often maintaining the walls of individualism, is increasingly immersing him or herself in experiences of exchange, dialogue and debate with others. “Sharing, collaboration, trusting unknown people, disintermediation, are habits acquired precisely through the use of digital technologies, and they become the foundation on which to build models that are different to those that the crisis has shown to no longer work” (Mainieri, 2013), stated Marta Mainieri. But at the same time the network of physical communities, linked to the values of proximity, also finds a way to intensify its experience of relating and debating through digital technology.

Social media have dictated new social rules and at the same time they have introduced new market logics, revolutionising the processes of selection and purchasing: the Accenture report Energizing Global Growth: Understanding the Changing Consumer found that 73% of the consumers interviewed declared that in the last three years they had increased their use of Internet search engines and digital socialisation tools to search for products or service, to request assessments and also for purchase processes (Accenture, page 29, 2013). 

Today’s consumer wants to interact with the market in a pragmatic, selective and demanding way, irrespective of whether or not they were like this in the past, and companies should recognise this, to attain a greater legitimacy that gives continuity and security to their activities, and to get closer to the territories in which they are born and grow. Socialisation and participation are in fact the key elements that make up an emerging new socio-economic model: collaborative consumption. This is based on access to goods and products through modes of sharing – bartering, hiring, giving and lending, which can be undertaken thanks to the participative infrastructure supplied by the latest generation of IT tools, platforms that create places to meet. Theorising on this phenomenon is continually evolving, and the model itself is flexible and adaptable to different contexts, but the reality that Rachel Botsman – co-author of “What’s Mine is Yours. The Rise of Collaborative Consumption" (Botsman and Rogers, 2010) – presented during TEDxSydney is of a phenomenon that is increasingly solid, and growing. Today, stating that “we are connected to exchange” is not speculation and the collaborative model that underlies services such as Car2Go and Reoose – to mention just two – demonstrates this: there has been a revolution in people’s behaviours, and goods, like relationships, have assumed a new value.

This is demonstrated by initiatives such as co-working, proposals to facilitate sharing work environments, stimulating people’s creativity while at the same time reducing the costs of a traditional office, co-housing, which proposes living solutions with common and shared spaces for the co-inhabitants, cutting rental costs and facilitating relationships, crowdfunding, which creates a collaborating financing process with a bottom up approach, in which access to resources is based on quality and not necessarily on possession of guarantees, solidarity-based purchasing groups (GAS), which while inspired by anti-consumerist philosophy, extend processes of purchasing goods and services on the principles of fairness and solidarity, and many others (Mainieri, 2013).  

The new collaborative services are the expression of a rethink of consumer practice that, even before it includes a new social sense, presupposes the revaluation of those everyday goods that form part of our daily life. 

So just as consumers have felt the need to re-animate their civic sense, in the same way producers must feel part of the territory that hosts their business and recognise their identity as “citizens”. Renewal becomes necessary to do this: enterprises should rethink their Social Responsibility from a perspective that goes beyond the daily conquest of legitimising their work and which sets in motion a real creation of shared value. Citizen consumers need quality products and service that they can rely on and which are guaranteed by respectable brands, with a solid social and cultural reputation and rooted in the territory in which they operate. For years the response has been identified in a model of Corporate Social Responsibility that is often read, rightly or wrongly as the case may be – as a social marketing strategy. However, the time in which there were doubts about Sustainability as a “masking” strategy is over. The solution in fact lies in adopting a vision of the whole that includes the needs and perspectives of different generations and genders, men and women, young and old, of the present and of the future. 

A solid enterprise culture must first of all recognise the importance of listening, and place value creation as its first objective. But it is equally essential that alongside this a conversion is built about Sustainability which, although communication, has proved to be one of the strongest channels to create a link with a company’s partners and to transmit the company’s value. 

Today, what our businesses need is a social-oriented approach, real encounter and interaction with citizens, that goes beyond the sales logic and adopts “sharing”. Listening, but also being heard. A social-oriented enterprise is one that can develop and communicate its commitment in the territory in which it operates, and which contributes to improve the quality of life of the community and its own relationship with the territory through its capacity for intellectual and organisational innovation. In other words, an informed, aware and dynamic enterprise that can place the consumer in first place, not just as final user of the enterprise’s services, but also as strategic partner, co-creator of the enterprise’s operating plan and creation of value for itself and for others. 

We are aware that the lessons from the community – “collaboration” and “socialisation” – must progress up the social scale and lead companies to a new way of doing business; this must happen through a communication that adopts a more participatory model, more dialogue, but also through action that places people in first place and transforms their needs into common aims.

Conclusions
The considerations set out so far lead us to recognise that the citizens’ culture is changing. In particular consumer culture, which is moving away from the paradigms assumed in the “consumerism era” and which is enriched with rediscovered meanings. Consumption is a language. Through consumption, the “new citizen” talks to companies and communicates to them the importance of adopting a principle of responsibility that creates value for its activities and for the surrounding realities. The figure of the citizen consumer emerges, characterised by a renewed culture of action and a rediscovered sense of the ethical

Today, citizens are seeking actions and products that meet renewed quality parameters. The consolidation and growth of realities such as the consumer “cooperative companies” and the birth of a “collaborative consumption” model that uses the power of socialising technologies are in fact signs of a spontaneous mobilisation and citizen’s alliance in which ordinary people are active participants, in a market that wants to be more ethical and responsible. 

At the same time the companies are realising that their business models need to be renewed. 

There is a solution, and today its name is Sustainability. It is a vision and a strategic approach that constantly questions the work of companies and ensures that they adapt not only to current requirements, but above all to those of the future. Some key elements have emerged from our reflections – listening, participation, participative communication and being open to debate – which share a common thread that leads to an innovative and modern model of “sustainable development”, meaning a commitment common to enterprises, citizens and institutions that – through collaboration – they will implement creation of shared value.
 

References

Accenture, Energizing Global Growth: Understanding the Changing Consumer, 2013.

Botsman, R., Rogers, R., What's Mine Is Yours. The Rise of Collaborative Consumption, Collins, 2010.

M. Mainieri, Collaboriamo! Come i social media ci aiutano a lavorare e a vivere bene in tempo di crisi (Let’s collaborate! How social media help people to live and work in a time of crisis), Hoepli, 2013.

M. Mainieri, Quando le grandi aziende ripensano in maniera collaborativa il loro modello di business (When major companies rethink their business model in a collaborative way), 2013.

 

 



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Ilaria Pais, FEEM Junior Researcher, Sustainable Business Area
   
 
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