To date, there has been limited research examining the sharing economy in low-income contexts. The sharing economy – made up of technology-enabled businesses that allow the sharing of assets, finance or skill – is emerging in developing countries. This research for Tearfund UK provides a synthesis of the available literature and suggests some preliminary findings.
There are many new example businesses within transport, agriculture and work sectors, and these could have both positive and negative impacts for development and sustainability. The application of sharing economy style businesses in developing countries has the potential to:
- enable lower impact consumption;
- assist with economic development;
- enable entrepreneurship; and
- assist with regulation and business formalisation.
There is a risk, however, that sharing economy businesses won’t achieve these outcomes, and could lead increasing inequality for those who are not able to participate (e.g. those without internet or mobile phone access), shift profits away from local people, or result in negative environmental impacts. To ensure the sharing economy supports the poor and promotes sustainability, and to mitigate potentially adverse impacts, this report outlines new policy and program interventions that may help to achieve this.
Presently in low-income countries, the key sectors in which businesses are appearing include transport and logistics, human resources and agricultural aids. In middle-income countries there is a broader range of options with businesses providing access to consumer goods such as toys and tools.
Greater potential exists to customise the sharing economy to low-income settings and to target societal needs, such as safety, health and housing; or to include under-served groups. Platform co-operatives may provide a promising business model to distribute benefits in poor communities.
Barriers to the sharing economy in low-income countries include: a lack of trust, social and cultural norms regarding ownership, inadequate technology, a lack of electronic payment systems, a lack of assets and skills and a lack of appropriate regulations. There are currently few examples of governments promoting and encouraging the sharing economy... but experiences in Seoul, Korea may provide useful insights.
Much more research is needed to understand impacts and to identify appropriate sectors, business models and conditions to enable a pro-poor sharing economy. Interventions to support a pro-poor sharing economy would need to: provide the enabling environment, promote pro-poor business types and then implement policies to ensure positive social and environmental outcomes can be achieved.
To create the enabling environment, interventions could support the development of mobile payment systems and accessible technology platforms, as well as facilitating access to community or shop space and crowdfunding opportunities.
Pro-poor approaches to the sharing economy could involve the development of platform cooperatives, peer-to-peer sharing platforms and sharing businesses that target community needs or specific social and environmental issues.
To promote positive outcomes for sharing economy businesses, interventions could help by setting minimum wages for freelance workers, facilitating worker access to social security and training, promoting business standards for inclusiveness and setting sustainability guidelines for businesses.
Researchers
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Research Director -
Research Principal
Year
- 2017
Client
- Tearfund UK
