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The digital revolution has brought many industries to their knees and reinvented the way everyday people do business with each other. Perhaps the most recent ripple in the world of business is the emergence of the sharing economy.
A sharing economy is built upon the principles of sharing human and physical resources and has been practiced by mankind for thousands of years. Before the invention of gold and coin as a form of currency, deals would be bartered with goods and services.
With the 2008 financial crisis came a time of hardship and communities began to come together to share everyday items. Some people shared homes, food or even cars, but these were small localised pockets of sharing condensed into small areas of the globe. What the world needed was a platform that enabled people to share globally, evolving the way people interact and connect. In actual fact a number of start-ups launched to plug this gap in the market giving birth to the 21st century sharing economy.
Essentially a sharing economy works exactly the same as an economy the UK public are familiar with, in exchange for one thing you give something back, not necessarily cash but maybe a service or other goods in return.
Many Brits have already reaped the benefits the sharing economy has to offer. With a total of £4.6bn contributed to the UK economy and an annual growth rate of 25%, it’s easy to see the lure of this new economy.
The facts highlight the already huge market in the UK. The biggest lure of the sharing economy is flexible working and independence, with some predicting that by 2020 around 40% of the working population will rely mainly on the income from sharing.
The explosion of the sharing economy over recent years is predicted to continue and with every individual that joins a sharing platform it presents a huge number of potential collaborations. Almost all industry experts point to a population with increased sharing capacity and interaction over the coming years. A by product of a nation of sharers is sustainability, with consumers grouping together to utilise products it means fewer items are needed to be produced, reducing energy cost, carbon emissions and waste. On a planet with limited resources and an increasing human population, a civilisation that shares resources will surely outpace and survive one that does not.
The issue of regulation is a hot topic currently. Sharing economy enabling apps like Uber allow everyday car owners to become taxi drivers, but that then represents a massive u-turn in taxi licence regulations. London is notoriously difficult to gain a hackney carriage licence, often requiring hours of study and local knowledge to pass the test. Uber has given the London taxi market to anyone with an email address and the Uber app, effectively decimating the ply for hire industry in large cities.
The future of a sharing economy will likely be intruded by government legislation and will come into countless conflicts with established industry bodies and major companies, as the emerging markets clash with the old. Taxi firms, hotels and restaurants could all be forced to embrace an element of the sharing economy if they are to survive. The UK government became the first to introduce a trustmark for app businesses operating off the shared economy.
Even the established sharing economy brands like Etsy and Airbnb may face being outpaced by the developing collaborative economy as new start-ups see the opportunity to develop open sharing platforms. As people begin to share more and collaborative consumption becomes the norm, the demand for share management will increase. As the sharing market develops, individuals will depend on sharing income and require asset management tools, something that brings together all the different sharing markets into one place.
Is your business at risk from a rising sharing economy? Or are you embracing the sharing environment?
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