What The Young Global Leaders Have To Say About The Sharing Economy

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The  Young Global Leaders is a community, part of the World Economic Forum, that is made up of the world’s most outstanding next-generation leaders. Upon nomination, YGLs already are supposed to have their cv filled with high profile achievements even though they are under the age of 40. Their achievements also need to have been the kind of achievements that make a positive impact on society, and these young leaders come from the most varied sectors of society and regions of the world.

In 2013 , the World Economic Forum’s Young Global Leaders community began a dialogue regarding the topic of sharing economy. Considering topics like access versus ownership and traditional topics like renting, lending and swapping through the use of technology, the group began looking at new ways to develop value and create economic efficiency, as well as how to manage resources sustainably and build communities.

One of the questions that this group sought to answer was, “Why now?” One of the answers to this was the fact that economies have been struggling and this has led governments to have to try and achieve more with fewer resources. On the subject of resources, some of these are quite limited and may run out. At the same time, digital technology is allowing people to be able to connect in different ways, cutting out middlemen. In addition, there are “idle resources” being wasted that could be more effectively used. It is believed that at least some of these reasons have led to the development of a sharing or collaborative economy. Indeed, the three main benefits of the sharing economy highlighted in the report as being the ones of the sharing economy are:

  • The greater efficiency in use of financial resources for greater resilience (economics)
  • The more sustainable and efficient use of natural resources (environment)
  • A desire for deeper social and personal connections (community)

The Young Leaders found that trust and reputation have an important role to play in the sharing economy. Reputation is thought to build up out of trust as people interact with one another consistently over time. It is argued that:

“Trust is the social glue that enables collaborative consumption marketplaces and the sharing economy to function without friction.”

Trust is seen by the Young Leaders to be based on many different factors such as market, societal, inner-personal, relational and organisational. Whether a sharing economy platform is monetised or not, it is also argued that it requires trust between strangers and a critical mass to be built up between users, customers, consumers, producers and members. Additionally, while it is argued that we can work on reputation we do also have to realise that other people will make judgments about us.

What is easier to share ?

The Young Global Leaders found that in many cases, collaborative consumption businesses work best when the asset is easy to share, such as in the case of spaces and skills. Another factor framing success is when the asset is maybe not used as much as it could be for a variety of reasons, such as can happen with cars or commercial or residential space. Those assets that are expensive to completely own are also considered more likely to work best, as are those that can become obsolete for a person quickly, such as baby clothes or maternity clothes. When assets increase in value because they are shared, success is also more likely to be achieved, argue the Young Global Leaders.

It was found that the sharing economy is at a very early stage of its development, however, it is growing very rapidly and the varied news of success of sharing economy projects suggests possibilities for longevity. The Young Leaders found that sharing-based models could have significant potential for success. Not only this, but both national and local governments were found to have a part to play in making sure that opportunities are understood and in helping people to use models that use resources more effectively. One challenge with this was noted which is the fact that many governments are still unware of the existence of the sharing economy, or are very unsure about how to respond to it. It is argued that the appropriate response should be developing an “enabling environment.”

The group concluded that there were a number of areas to work on to support the sharing economy. Creating marketplaces and building critical mass is an important one. Dealing with regulatory and policy issues is another very useful one, so that these do not hold the sharing economy back. Having organisations design in the first place with sharing in mind rather than a person owning an asset outright is an area for consideration as well. In some places cultural barriers were seen to be potentially challenging. All of these areas should be addressed in their view, for greater chances of success.