WRITER: Carole Lydon
PHOTOGRAPHER: David Solm
The sharing economy is challenging the fundamental institutions of employment, work and entrepreneurship, to the point where it is creating a whole new breed of microentrepreneurs and a whole range of new business opportunities.
Changes do not come without costs: new players and business models are disrupting value chains and impacting the principles of value creation in the modern economy.
THE WAY FORWARD
The long-term success of the sharing economy requires regulatory input from the government in order to fairly distribute social and economic value across all stakeholders. With the younger generation in the driver’s seat, diversity, flexibility, mobility and access are more important than ever—more so than commitment and ownership—and it’s this shift in values that’s transforming the sector.
If you were to ask any First Peoples for their thoughts on the new sharing economy, they would tell you there is nothing new about it. People and communities have been sharing resources for as long as they’ve inhabited the earth. True, but today, people demand more. Driven by constant interconnectivity and technological advances, the way we trade in the 21st century is unlike ever before.
Professor Marianna Sigala, Director of UniSA Business School’s Centre for Tourism and Leisure Management (CTLM), says that it’s time to take off the rose-coloured glasses and look at the impact the sharing economy is having on the tourism and leisure industry. Only then can we manage the monumental shift that is taking place in this industry.
"It’s important to understand that we’ve been sharing assets for a long time—renting cars and holiday houses is nothing new. Rather, it’s the way we access these services that’s vastly different,” Professor Sigala says.
“With social media and peer-to-peer platforms internationalising and escalating the size of the market, it’s created an environment that’s not only about sharing assets, but more accurately, about sharing access to assets.”
Widely viewed as a network of connected individuals, communities, and organisations, the sharing economy creates value through interaction and integration of idle resources, revolutionising the customer’s role as a service provider for firms and other customers.
THE SHARING ECONOMY SITS MOST COMFORTABLY WITH MILLENNIALS AND GEN Zs— THEY’VE GROWN UP WITH THE INTERNET AND ARE AT EASE WITH THE PACE OF DIGITAL CHANGE.
Take Airbnb for example. What started as a way for individuals to offer a different home-style type of accommodation is fast becoming commercialised. People are now specifically buying homes and apartments in sought-after locations with the intention of renting them out as Airbnb accommodation.
“The sharing economy is challenging the fundamental institutions of employment, work and entrepreneurship to the point where it is generating a whole new breed of microentrepreneurs,” Professor Sigala says.
“In the accommodation sector, we’re seeing a new diversity of offerings, at times in locations that would never have been able to offer a commercial hotel. We’re also seeing a corresponding sub-economy that is flourishing on the support needs of not-quite-commercial accommodation operators—microhoteliers— who require services such as cleaning, laundry, accounting and social media platform management, to name just a few.
“In this vein, the sharing economy is fuelling numerous entrepreneurial opportunities, at times in locations that would never have been able to offer a commercial hotel.”
The sharing economy shows a fundamental shift in the way business is done, with effects that permeate throughout the economy and social structures. But while it presents a wealth of new opportunities for customers and providers alike, it does not achieve this without repercussions.
A recent study by Professor Sigala identified four types of microentrepreneurs that are prevalent in the sharing economy: peer-to-peer start-ups aspiring to become the next Airbnbs; micro-entrepreneurs who are using sharing platforms to rent their resources; entrepreneurs working in the sub-economies of peer-to-peer platforms; and labour that as been transformed from paid employees to freelancing professional services.
“THE SHARING ECONOMY NOT ONLY DISRUPTS VALUE CHAINS BY INTRODUCING NEW PLAYERS AND BUSINESS MODELS BUT CHANGES THE FUNDAMENTAL PRINCIPLES OF VALUE CREATION IN THE MODERN ECONOMY."
“We’re also seeing unfair competition, where commercial hoteliers are operating under strict safety, quality and labour regulations, whereas their sharing economy competitors are not. In this way, you can see some of the downfalls of the sharing economy: it’s good for the economy but can’t be given free reign. It must be measured and managed.”
Whether we like it or not, we rely on regulation as a fundamental part of conducting business—from keeping people safe, to making sure taxes are paid.
“While freedom and entrepreneurship sound attractive, the long-term success of our sharing economy requires regulatory input from the government in order to even the playing field,” Professor Sigala says.
“Plus, of course, we need a long-term vision for how we can make the most of the sharing economy, in terms of generating and fairly distributing both social and economic value across all stakeholders.”
As organiser of South Australia’s Open State session, Entrepreneurship and sharing economy in tourism: unravelling economic, socio-cultural and environ-mental impacts, held in October last year, Professor Sigala brought together a diverse range of internationally recognised academics, government representatives and entrepreneurs to explore the impact of the sharing economy.
“What we’ve learnt is that the sharing economy is disrupting industry structures and economic systems, showing just how our social values and consumption behaviours are changing,” she says.
“Certainly, the sharing economy affords new entrepreneurial opportunities, simultaneously creating new labour types by restructuring labour markets. And how we respond and monitor this will shape the sustainability of the tourism sector.”
While the way we access the assets of others has changed, the way we value those assets has not. It still stands that those with more valuable assets will have the opportunity to make more money from them.
Yet without regulation, the sharing economy has the potential to drive a wedge into the economic and social divide—the rich will become richer and the poor will be called micro-entrepreneurs.
If we can use the sharing economy responsibly so that tourism innovation flourishes, while ensuring transparency and accountability from all players, traditional and new players will make the most of this peer-to-peer frontier.
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