By Mark Barnett, president, UK&I
AirBnb. Netflix. WeWork. 10 years ago these were inexistent, an idea trapped in a young entrepreneurs mind at best. Now however, they are billion dollar companies dominating the global economy.
Well it all started with a movement in materialism. The change from ownership into experience, driven by the willingness to collaborate and share. From cars to houses, people around the world are realising what they can experience without being encumbered by ownership. This movement formed a new economy in its own right. The sharing economy.
Familiarity with the sharing economy is increasing fast, with more than half of all Europeans knowing about it and one in six already using it. This familiarity and use increases in the younger population to a one-in-three ratio amongst younger, more highly educated, urban and working people. In fact, from May 2015 – 2016 in Europe alone, over 191 million people participated in this economy generating a staggering (EURO) 28 billion in transactional value.
By 2022, more sharing platforms will continue to proliferate, growing and segmenting the market with new innovation. Winners will emerge to dominate, consolidate and broaden their service offer, leaving incumbents to respond, in turn creating new ventures. As part of this, sharing will penetrate the mass market, with major sharing platforms growing to equal their traditional market equivalents. It will also spread into new sectors, including, insurance, utilities, health and social care.
However, this growth, doesn’t come without challenges. You see as the economy becomes more prevalent, it begins to face barriers such as regulation that interfere with its course and endanger the, economy’s ecosystem. The solution? To participate in conversation with regulatory from an early stage, educate and inform them and help drive policy that helps the sharing economy thrive, and by doing so the possibilities are endless.
But how exactly may it evolve?
Access to value
As new ways to access emerge, greater value will be delivered to consumers and organisations alike. This access will be driven by technology, which unlocks new value through increasing use and reducing cost of access.
Examples of this include Blockchain, the Internet of Things (IoT) and Artificial Intelligence (AI, which, if fully utilised, can power the shift from static to active: as more objects and people become interconnected, so the opportunity to share and benefit from access increases.
Improved trust and transparency
Trust remains the critical enabler of the sharing economy, and will naturally grow as the sector expands and people become more comfortable with the wide range of products and services that the sharing economy captures.
But trust can only truly be achieved with improvements in regulation and technology. As society adjusts to new models of commerce, regulation will need to move from a reactive to a proactive stance, better protecting consumers, providers and platforms alike. This will provide both a social safety net, and also help regulators share in the value they create.
An enhanced user experience is vital to the growth and expansion of the shared economy, and is what leaders need to achieve to engage their customers, further develop, and maintain legitimacy.
To do this, platforms must embrace the crowd (user feedback), provide frictionless transactions, transfer control of personal data to the individual and despite technological advances, and never lose sight of the human touch.
Looking to the future, the report closes with the conclusions that guaranteeing trust and reputation, improving experience and creating greater value are all essential for growth of the sharing economy