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Balancing the Potential of the Sharing Economy

Emma ClarenceDirector, Emma Clarence Consultants

Emma Clarence, Director of Emma Clarence Consultants, attended SIE's Exploring Ecosystems for Social Innovation on 22-23 June and contributed this piece as part of our #SIEBerlin blog series. 

The sharing economy has garnered a lot of attention from policy-makers, the media and consumers and business alike. Claims as to its economic, social and environmental benefits suggest that there are great opportunities in the sharing economy, but the potential negative dimensions should not be overlooked. Debates about the impact of the sharing economy on traditional sectors, such as hotels and taxis, as well as on areas including labour rights and protection, and the housing continue.

However, whilst there might be pressure from sharing economy organisations for a more supportive enabling environment to be put in place, it is important to understand what it is we are seeking to support. We need a more nuanced understanding of the sharing economy and the multiplicity of organisations that inhabit the space. Indeed, using the label ‘sharing economy’ can effectively hide the diversity that exists within and overlooks the complexity of putting in place an enabling environment for something that includes companies valued in the billions to small-scale, local level activities and organisations.

Alongside the ‘poster-children’ of the sharing economy, such as AirBnb, are many other small-scale innovative sharing economy organisations that seek to create stronger, more inclusive and resilient local communities. They bring people together in a myriad of ways: from the ‘social streets’ re-creating the positive elements of communities urbanisation has threatened, to inclusive dynamic fundraising systems for community activities and enterprises like ‘Detroit Soup’ and ‘York Soup’. Between these types of organisations and the large-scale companies are many other types of not-for-profit and for profit organisations.

It is this diversity that makes creating an enabling environment challenging. Identifying and putting in place one approach that supports small, local sharing economy organisations as well as the large, for-profit ones is arguably a challenge too far. Some of the features of the enabling environments will evolve as the sharing economy matures. For others, there will need to be explicit engagement by governments and other actors. But before engaging, we need to step back and differentiate the activities that are happening within the sharing economy and identify the different types of enabling environments required. For small-scale local organisations, the focus is likely to be on facilitating access to resources, putting in place supportive measures and overcoming rules and regulations that may fail to recognise the types of activities being undertaken. Whilst for large profit-making organisations the focus is likely to be on ensuring regulatory frameworks respond proportionately to new ways of operating, and addressing associated risks.

The sharing economy’s potential to use resources more efficiently, to build stronger social connections and to create new economic activities is real. But a rush to maximise the potential could actually lead to ecosystems that fail to deliver the support necessary for not only all types of organisations to thrive, but also to ensure that the needs of everyone, including employees, contractors, consumers and users, are balanced appropriately.

By: Emma Clarence

Director, Emma Clarence Consultants