What’s stopping us from unlocking the sharing economy – Executive summary?
People have always shared their possessions but now through the digital and social economy they have an opportunity to share their possessions with strangers across the country through online platforms. The full potential of sharing models is only just starting to become clear and more research is needed to show how local areas can benefit from embracing these models. “The term sharing economy appeared in the mid 2000’s due to new business structures emerging inspired by enabling social technologies and an increasing sense of urgency around global population growth and resource depletion” (Traboulay, 2014).The major change in the last decade has been the advent of technology, which makes it possible to be able to share possessions whether it is a car, house or even a skill with people that you have never met before and that is why these small traditional businesses are becoming big businesses both united kingdom and globally. There are a number of reasons behind the growth of the sharing economy. One of the major macro-economic factors is that there is less consumer trust in the corporate world because of the financial crisis and also there has been a substantial rise in the unemployment sector which has decreased the purchasing power of consumers, and thus people are now looking for ways to potentially earn or save money by any means, which is why consumers are currently more welcoming to the peer to peer business model.
The sharing economy consolidates a wide range of businesses and business models and helps them sell their goods and services from anywhere. Example, include: Etsy which allows individuals to sell their craft ware, companies like City Car Club where individuals can impart access to an auto without having to own their own particular one and time banks like the economy of hours which permits one to swap their skills. “Nesta Has estimated that 25% of the U.K adult population are sharing online in some way and also the new ways of producing and consuming of the collaborative economy bring with them regulatory and policy challenges with some positive moves in evidence to address those challenges and support the collaborative economy“(Stokes, Clarence, 2014). The collaborative economy is an economy based on disseminated systems of connected people and groups versus unified organizations, changing how we can create, consume, finance, and learn. The collaborative consumption system on the other hand helps maximize usage of advantages through effective models of redistribution and shared access. Companies like Air BnB, Lyft, Zip Car and City Car Club are the main competitors in the sharing economy and because of this other regional and local businesses that also play their part in order to keep the movement running get neglected. Due to this “Nesta and Collaborative Lab have chosen to work together in order to underpin research into the collaborative economy in the UK, and Europe, expecting to learn more about how the shared economy is characterized, what other businesses are included, what they are doing, and how they are doing it”(Collaborative Consumption, 2014).
The government have commissioned a review supporting the sharing economy and has also asked everyone to support it. “By backing the sharing economy we’re backing the innovators, the competitors and the agitators and also making sure that Britain is at the forefront of progress and by future proofing our economy we’re helping to protect the next generation” (Wosskow, 2014). This review led by Debbie Wosskow who is the owner of Love Home Swap called for a start-up incubator and innovation lab for British companies in this field, asks that Jobcentre staff promote sharing economy platforms to jobseekers and suggests more carpooling lanes in high congestion areas (Ortiz, 2014).The innovation lab which is supposed to be run by a private sector investment and supported by Nesta aims to provide “targeted financing for sharing economy services, help these services learn from each other and share best practice and also work with cities and local areas to see how sharing economy approaches can help areas to work better together and use resources more efficiently” (Wosskow, 2014).
Businesses have also introduced and implemented a peer to peer platform and although it is proved to be a virtuous idea the platform is the focus of controversy about it in the U.K. The toughest obstacle is the lack of trust during online transactions and therefore companies have started looking into ways to increase relationship trusts like identity checks to keep users mind at rest and peer to peer rating systems (Dervojeda et al, 2014). Consumers now buy products in order to gain ownership in traditional markets, through easy accessible based systems. Consumers are progressively paying for makeshift access-rights to an item. Within these accessible business models, there is a trend towards peer-to-peer platforms that allows consumers to access consumer owned properties. Companies tend to encourage peer-to-peer markets for all assets owned by peers. Businesses are also considered to have an accessibility based model for peer-to-peer markets at the point when their worth suggestion comprises of making a match between a peer owning a certain asset and another peer in need of that asset, at the perfect time and against sensible exchange costs.
One of the most vital implications for the sharing economy has been the accessibility of subsidizing sources. Help from both public and private gatherings has been remarkable. Numerous sharing economy start – ups are a piece of an incubator program, which gives them guidance from experienced people and seed capital. (Wosskow, 2014).This is very important as it implies that internationalisation can be an alternate driver for some sharing economy marketplaces. Platforms that are considerably influenced by system externalities can especially profit from advanced to non-domestic markets. Companies in the sharing economy permit consumers to take on responsibilities and assignments that were ordinarily led by businesses. Regulations and measures that are suitable to accommodate and direct Business-to-Business or Business-to-Consumer exchanges are not generally relevant to the recently made Consumer-to-Consumer market (Dervojeda et al, 2014).
In conclusion the sharing economy still has a considerable measure of developing to do in years to come, as very few businesses are becoming accustomed to the idea and transaction dealings with strangers online. In spite of the fact that this is one of the difficulties it confronts, it is still a fundamental method for changing the substance of how consumers work together by opening shut entryways for normal business visionaries so they can do business with each other. These new marketplaces have turned out to be extremely effective as they are savvy and they figure out how to push the boundaries of innovation. Due to the huge power the sharing economy generates it can possibly guarantee that consumers have access to the best deals. Collaborating administrations, for example, Near Desk give little organizations access to office facilities, without going into immoderate and unsafe long term leases (Wosskow, 2014).
Collaborative Consumption, (2014). NESTA SURVEY: Businesses and Organisations in the Collaborative Economy – Collaborative Consumption. [Online] Available at: http://www.collaborativeconsumption.com/2014/05/07/nesta-survey-businesses-and-organisations-in-the-collaborative-economy/ [Accessed 14 Dec. 2014].
Dervojeda, K. (2014). [Online] Available at: http://ec.europa.eu/enterprise/policies/innovation/policy/business-innovation-observatory/files/case-studies/12-she-accessibility-based-business-models-for-peer-to-peer-markets [Accessed 15 Dec. 2014].
Appendices 1: Ignaczak, n. (2014). New Report: 25% of UK Participates in the Collaborative Economy. [Online] Shareable. Available at: http://www.shareable.net/blog/new-report-25-of-uk-participates-in-the-collaborative-economy [Accessed 14 Dec. 2014].
Ortiz, a. (2014). Antonello. [Online] Getprismatic.com. Available at: http://getprismatic.com/profile/antonello [Accessed 12 Dec. 2014].
Stokes, Clarence, k. (2014). Making Sense of the UK Collaborative Economy. [Online] Nesta.org.uk. Available at: http://www.nesta.org.uk/publications/making-sense-uk-collaborative-economy [Accessed 13 Dec. 2014].
Traboulay, N. (2014). The Sharing Economy: Millennial Entrepreneurs’ Re-Invention of Collaboration in a Downturned Economy. [Online] Ncmaoc.org. Available at: http://www.ncmaoc.org/store/products/the-sharing-economy-millennial-entrepreneurs-re-invention-of-collaboration-in-a-downturned-economy/ [Accessed 8 Dec. 2014].
Appendices 2: Wesson, D. (2011). David Wesson’s Digital Culture: The New Sharing Economy-The next era of the Social Web. [Online] Davidwesson.typepad.com. Available at: http://davidwesson.typepad.com/david_wessons_digital_cul/2011/04/the-new-sharing-economy-the-next-era-of-the-social-web-.html [Accessed 14 Dec. 2014].
Wosskow, d. (2014). Unlocking the sharing economy: independent review – GOV.UK. [Online] Gov.uk. Available at: https://www.gov.uk/government/publications/unlocking-the-sharing-economy-independent-review/unlocking-the-sharing-economy-independent-review [Accessed 13 Dec. 2014].