Sharing economy has been practiced in the developed world for sometime now. The recession of 2009 kind of forced a reality check on the population and as the household incomes declined, sharing increased. It is a trend that promises to provide an alternate means of sustainable consumption. It is a disruptive trend that is expected to be one of the ten ideas that can change the world by TIME Magazine. It challenges the hyper consumerist tendencies and improves sharing of assets and resources. It is a more environmentally friendly way of consumption too. Here are 4 key issues that are faced by the developing nations with respect to shared economy:-
1. While this trend has picked up rather quickly in the developed world, and more particularly in the USA, it is beginning to make inroads in the developing world as well. The developing world can look to the western world to see how this trend has played out there and it would then be possible to understand that access to an asset or resource is more important than owning the asset or resource itself. It will also be possible to perceive that it is not only physical goods that are shared, but also time, space and skills. Enabling factors like technology mobilisation and internet connectivity have begun to provide suitable platforms for a sharing economy.
2. It is a fact that the cities are growing bigger and that the number of cities too is also on the rise. But within the city, there is a trend to form groups or communities based on a common need. Any group of individuals who share a common need can build a basic trust level that enables them to share. The internet helps to connect individuals who then form a community at a very macroscopic level. Information flows freely and trust levels are established on the internet. This eliminates the need for middle men and promotes sharing.
3. This sharing economy is now allowing micro enterprises in a big way. Many people are able to pursue their passion either as a main source of income or as a supplementary source. Micro entrepreneurship makes for a happier people as many are allowed to follow their heart. It provides flexibility and spurs creativity, simultaneously acting as a source of income. It will allow people with skills to find lucrative outlets for the same. And this may actually have far more impact in a developing economy than in a developed one.
4. For sharing economy to take off in a big way in developing countries, it is important that trust is built into the system. Rentals for smaller time periods and taxi sharing are doing well in India, but can grow much faster if the trust factor is improved by dependable verification process. To help build this trust, one has to turn once again to technology. It can enable a review layer in a credible fashion.
While this economy can give great returns to the platform providers, it can also benefit consumers and the national economy and is worth a serious try.