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The Rise Of The Sharing Economy - Access Is The New Ownership

The sharing economy offers a multitude of unique opportunities for South Africa and other developing nations to boost economic development and encourage job creation and micro-entrepreneurship. 

Kevin Govender, author of The Rise Of The Sharing Economy - Access Is The New Ownership, told a GIBS online Flash Forum that: “People are experiencing a significant value shift, with a desire to reconnect with products and services in a more meaningful way. Consumers are becoming more cost and environmentally conscious and are prioritising experience over ownership.” 

The Rise of the Sharing Economy 
The sharing economy is a set of practices and economic model that through technology and community, allows individuals and organisations to share access to products, services, and experiences instead of ownership. It has exploded in popularity over recent years and has disrupted a significant number of mature industries such as accommodation in the form of Airbnb, automotive with on-demand ride hailing apps such as Uber and entertainment giants such as Spotify and Netflix. 

In 2011, the sharing economy was dubbed by Time magazine as one of the ‘Ten ideas that will change the world’ and it has been widely hailed as a major growth sector. The total value of the global sharing economy is estimated to grow from $14 billion in 2014 to $335 billion by 2025.

In The Rise of The Sharing Economy, Govender, who is a Partner and Director at Deloitte and the Deloitte Africa ERP Leader, shares his insights and expertise on the evolution of the sharing economy, consumer behaviour and alternative business models. 

The sharing economy has enormous benefits of access over ownership, with potential savings in time, money, and the opportunity to access experiences and meet new people. It also has the potential to create innovative means to access energy and healthcare and ensure food security in developing nations. 
Govender explained the “burden of ownership means being responsible for the maintenance, repairs and insurance of the asset. Access means that somebody else owns it. Sharing is all about the experience.”

He pointed out that sharing is not a new concept. Public libraries and video or DVD stores with physical outlets are time honoured examples of sharing. However, the emergence of technology and the subsequent ease of use has made the sharing economy a contemporary phenomenon.  

While he acknowledged that due to South Africa’s unequal past, “often, a sense of achievement is linked to ownership. However, if you reach certain level of actualisation, assets are no longer important, the experience takes precedence. In the future, I expect sharing and ownership will always co-exist.” 

Forum host Dr Roze Phillips, Director of Value Creation and African Futurist at GIBS Business School added that while “Ownership has its challenges, access gives freedom, flexibility and opportunities.” 

Disrupting the Disruptors 
Govender pointed out that the sharing economy is an opportunity to address some of South Africa’s economic and unemployment challenges and could provide innovative solutions to issues such as food security and energy. 

Apps such as Hello Tractor, a Nigerian-based platform connects small-scale farmers with nearby tractor owners who require agricultural equipment to perform certain tasks at specific times of the year. 

Solar power-sharing capabilities are another novel idea: “You don’t have to own the infrastructure. The funding model has fundamentally changed from one of capital expenditure to operational expenditure in the form of a monthly subscription,” he explained. 

The sharing economy even extends to the labour market: As a result of the Covid pandemic, many employees have made the switch to freelance, and are able to offer their services to clients in different parts of the world, while having the flexibility to live in remote locations through platforms such as TaskRabbit, Upwork and Fiverr!

The pandemic had a significant impact on the sharing economy, Govender said: “2020 was a difficult year for traditional businesses as well as the disruptors. While certain industries flourished such as the music and film streaming services, companies such as Airbnb had to reimagine and reinvent their businesses and look to create virtual experiences, as people were unable to travel due to the lockdown.”

This shows the importance of always remaining agile, he said: “Even the disruptors shouldn’t be complacent but must always look for new opportunities and ways to reinvent themselves.” 
Important Drivers of the Sharing Economy 
Govender conducted extensive research for his book, which began as the thesis for his Masters in Management Degree from Wits Business School. By conducting over 84 hours of interviews with 42 people, he was able to isolate the most important factors driving consumer decision-making when it comes to sharing. 

The research found that trust, safety, perceived risk, risk of failure and convenience were the some of the most important factors driving consumers to engage in the sharing economy. In addition to this, he found there was a correlation between high-value products and services, for example bike, car and accommodation, and books, music, and media sharing. Economic, technology, social and environmental are some of the key consumer drivers.

Monetary, functional, experiential, and symbolic perceptions are the key dimensions driving consumers to choose access over ownership. However, “Monetary factors are not the most important driver, experiential perceptions are,” he explained. 

“You don’t have to own it to experience it. Trust and experience are important value propositions when it comes to sharing.” 
A number of challenges exist with regards to scaling the sharing economy business model, Govender said, including regulations around safety and compliance, as well as the broader taxation and hygiene standards. Fair compensation and protection of rights and interests of the workers also remain a contested area. 

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