Trustworthiness. Victor Hwang and Greg Horowitt talk about its value in economic development in their best selling book, The Rainforest: The Secret to Building the Next Silicon Valley. Trust- or a lack of it- is a critical missing prosperity ingredient that must be cultivated between individuals, inside networks and economic ecosystems. Without a doubt, all of the ‘right’ ingredients can be present for an economy to thrive and if people don’t trust each other it simply does not matter what infrastructure is in place. Chicago is a great example of this, sadly.
So what is the solution? I believe it lies in building the Reputation Economy. In the future, our reputations will travel with us and be a form of capital that others will rely on and invest into. Think Ebay, Yelp, and Technorati. Our economy will increasingly measure our reliability; and not likes and tweets- which are influence based. As networks founded in human sharing- aka as collaborative consumption– continue their rapid growth and spread across industries and sectors,our ability to transport trustworthiness- our reputations- will become necessary simply for the utility of carrying it with us wherever we go. Our reputation is clearly an asset that presently is not being utilized to its fullest potential. An individuals reputation needs to go from ‘word of mouth’ or uncontrollable ‘random’ support to a tangible easily defined asset that will serve us as we move between networks, industries and across sectors.
And the rise of collaborative consumption is the vehicle for moving us towards the reputation economy. This concept has been most recently championed by Rachel Botsman and Roo Rogers in their 2010 book What’s Mine Is Yours: The Rise of Collaborative Consumption. In a speech at the TEDx Sydney conference in 2010, Botsman describes collaborative consumption as “a new socio-economic ‘big idea’ promising a revolution in the way we consume”. In 2011 Botsman described it as a social revolution that allows people to “create value out of shared and open resources in ways that balance personal self-interest with the good of the larger community.” Most recently, at TEDGlobal2012 Botsman articulated that the concept of trust, across multiple platforms, would constitute the currency of a new collaborative economy, asserting that “reputation capital creates a massive positive disruption in who has power, influence and trust.”
- 80% of adults are “very” or “somewhat” likely to consider buying products recommended by real world friends and family. (source: Pollara)
- 78% of executive recruiters routinely use search engines to learn more about candidates, and 35% have eliminated candidates based on the information they found online (ExecuNet)
- 87% believe the CEO’s reputation is an important part of a company’s reputation. (Hill & Knowlton)
- 90% of consumers trust recommendations from others. (Forrester)
- Consumers traffic to the top 10 review sites grew on average158% last year (Compete.com)
- 97% of people who made a purchase based on an online fair review found the review to be accurate (Comscore/The KelseyGroup, Oct. 2007)
- 92% of people have more confidence in information found online than from a salesclerk or other source (Wall Street Journal, Jan 2009)
- 61% of people rely on user reviews for product information or research before a buying decision is made. (Razorfish, 2008)
- 34% of people have turned to social media to air their feelings about a company. 26% to express dissatisfaction, 23% to share companies or products they like. (Harris Poll, April 2010)
- 75% of people don’t believe that companies tell the truth in advertisements (Yankelovich)
- 100% of those reading this post have either a personal or corporate reputation to protect (Marketing Pilgrim)
Check out Botsman’s Ted Talk below to learn more about how we are building a reputation economy.
About Lisa Canning
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