The so-called sharing economy is something many people are extremely familiar with, especially in more developed countries. Whether they know it under this name or not, there’s no denying that this type of economic organization has become one of the main ways in which people consume collaboratively and save money in the process. The sharing economy in emerging markets is a completely different story.
There, this practice is older than the platforms and products that we now use for sharing economy. Today, we’re going to explore this concept and look at its potential in emerging markets.
What Is the Sharing Economy?
First of all, before getting into the applications of the sharing economy in emerging markets, it would be useful to take a closer look at what it actually entails. Well, people use this term to describe many things. Most commonly, it describes an economic activity based on online transactions. The term has a broad understanding, and it doesn’t only refer to peer-to-peer economy, but also to B2C economy.
You can find it under many names, from collaborative consumption, to shareconomy, to peer economy. As you can tell from these names, sharing economy is all about transactions between consumers. The internet facilitates all of these transactions. What people exchange differs enormously. It can be goods, it can be services, it can be information, and so on.
The Potential of the Sharing Economy in Emerging Markets
Now that we’ve established what sharing economy is, let us begin to explore what it could mean for markets in developing countries. The main advantage of sharing economy, no matter what country you take as an example, is that it allows people who are not part of a centralized network to connect via technology and have access to resources they wouldn’t otherwise have access to. It’s a completely different thing from owning something. In today’s increasingly peer-to-peer based economy, sharing or renting makes much more sense than owning.
Sharing economy is all about getting access to new opportunities, new assets, new skills, and so on. Plus, you can do everything with the help of your smartphone, as opposed to a central intermediary agency. Which is why it has the potential to help develop emerging markets. By developing the economy and generating more income, it can help people who struggle with unemployment and those who need help accessing finances.
Another benefit of bringing sharing economy in emerging markets is that it could help urban development. Local entrepreneurs would be more motivated to put their ideas into practice once they have the means to do so, people would collaborate more, they would share spaces, and so on. Which is why the best place to start applying the concept of sharing economy is the city. Cities abound with people who are willing to share their things with other people. This would bring about civic innovation and help develop the cities.
One of the dangers of focusing too much on technology is that humans could disappear from the picture. Once more, sharing economy helps prevent that. How does it do that, you ask? Well, by making sure that humans have an important role to play in the economy of developing countries. Also, by ensuring that communication between individuals is not entirely lost. After all, we’re talking about an economy based on sharing. This means that human relationships are at the center of it. You can’t share something with someone or exchange goods with them without communication.
That is not to say that developing cities shouldn’t understand the importance of technology and use it in order to grow. The trick to a successful application of an economy based on sharing is to know how to use technology yet still focus on human interaction, and how to determine individuals to work together towards a common goal – that of improving their life and the life of the city they live in. Technology should merely be a means of achieving this, not the end goal to which people aspire.
Finally, sharing economy in emerging markets can help people become more sustainable, more resilient, and more able to use technology in order to develop. Sharing economy doesn’t have to be sudden. It can start small, with shared transportation for instance.
The Challenges of Sharing Economy in Emerging Markets
Despite the certainty that sharing economy would help emerging markets tremendously, the shift towards such an economy has been slow. One of the main reasons why is because developing countries don’t have easy access to technology. As we’ve mentioned previously, this type of economy relies on technology, so it can’t function without it. Not only that, but people must also know how to use technology for sharing economy. This is not a skill they can learn if they don’t have access to it and can’t afford it. While developing countries are no stranger to a certain form of sharing economy, this is not something they choose to adhere to, but rather have to.
While the sharing economy is one of the main ways of doing business in developed countries, developing countries are still struggling to integrate this type of economy into their cities. Even if most countries know the concept in itself, its application is entirely different. For instance, some countries have to rely on sharing goods and services because they are forced to, or because their culture relies on sharing. However, they don’t do that via the internet, and this happens mostly in small areas where the community is close-knit.
Truly bringing this type of economy to developing countries would be a huge step forward for them, as we hope we managed to show in today’s article. It’s not just that it would help their markets develop. It would also provide people with employment, encourage them to explore their creative ideas, determine them to communicate with one another, and so on. While there’s still a long way to go before developing countries can fully enjoy the benefits of this economy, the fact that more and more countries are becoming aware of it is an important step forward.