Academic frameworks for the Sharing Economy

Much has been written about the perks and benefits of the sharing economy. The authors of the different articles range from hyper enthusiasts to skeptical criticasters. Some foresee a new era of interactions that will lead to a fairer, greener and more prosperous society. Some emphasize the problems with consumer safety, governmental oversight and the level playing field. This broad range of ascribed effects of the sharing economy on our society makes the concept an interesting and above-all important field to keep track off.

One type of party that is especially concerned with the whole range of possible effects is the diverse set of the policymakers that have to deal with new sharing initiatives in their domain. Given the immense range of different perspectives it can however be arduous for them to decide on the best approach towards these new initiatives. Is the better to support and encourage start-ups in order to reap the fruits of a more social and efficiently organized economic sector? Or is it better to be skeptical and to prohibit any type of (economic) activity that isn’t covered by existing regulations?

One year ago I started my graduation project with this question in mind: What is the best way for policymakers and regulators to deal with sharing economy initiatives? As experienced ShareNL blog readers you might already sense that this question is very hard or even impossible to answer. Most certainly it is too comprehensive to answer in a graduation project of only five months. I however, was not aware of the challenge at the time and thus ambitiously started on my adventure. 

As stated before much has been written on the Sharing Economy, but as I soon had to find out almost none of the articles had an academic basis. (note: the number of academic articles on the sharing economy has however grown significantly over the last year.) For an academic graduation project this was a problem. My initial idea was to look at conceptual frameworks of Sharing Economy initiatives and effects and relate them to theories on policy intervention. Without any conceptual frameworks this was obviously not possible. Moreover, not even one generally accepted academic definition of the sharing economy was available for me to work with. 

You can imagine I was frustrated and unsure how to continue my project. On the positive side I did however realize how policymakers should feel in their approach towards the sharing economy, without any frameworks or definitions to work with. Based on this realization I decided to change my approach and objective. From that moment on I would try create the conceptual framework that I had wanted to have at the start of my project. My focus was on the possible effects of sharing economy platforms on society.

Drawing on the more elaborate and nuanced articles I could find on Sharing Economy, I listed a large amount of different supposed effects on society. Based on this list of effects I composed a conceptual overview of the most important effects. I tested the overview with a diverse set of experts, ranging from municipal and national policymakers to platform operators and researchers. Ultimately the following conceptual model was composed.

Without going too much into detail, the model can be described on the basis of two dimensions: The object for whom the effect is most relevant (different quadrants) and the level of the effect (different rings). Below I will describe both.

The object of the effect is the type of actor for which the effect is most relevant. I discern two types of directly involved actors: The providers who own the product that is shared or perform a task that is asked for by someone else, and the users who use the shared product or benefit from the delivered service. Besides these two directly involved types of actors, I also discern two types of indirectly involved actors: parties that are economically active, like platform companies, incumbent companies and workers and parties that are not, like governments and the general consumer.

The level of the effect is based upon the scale and frequency of occurring transactions that is needed to result in the effect. In my model I discern three levels of effects: the micro, meso and macro level. Micro level effects, like effects on personal convenience and consumer safety, occur after just one transaction. Meso level effects only occur after a larger series of transactions takes place, problems with level playing field or tax revenue and other public tasks for example fall under this category. Finally macro level effects only occur when a system of transactions takes place with a high frequency on a large scale. Effects on this level for example include effects on the environmental sustainability, economic growth and labor market dynamics.

By combining both ways of structuring, the different effects could be mapped in the conceptual model. This conceptual model was the ultimate product of my graduation, which I completed last April. In a few weeks my model will be presented on the EGOV conference in Guimarães, Portugal.

In my opinion structured overviews of the (concepts around) the Sharing Economy are vital for the understanding of the sharing developments that are currently occurring in our society. My model focuses on possible the effects that can be expected from sharing economy platforms, but the ShareNL ecosystem is also a great example of an overview that gives great insights. Based on models like these, policymakers and all other involved actors can better determine their approaches towards new initiatives in order to let the Sharing Economy fulfill its promise.

.By Jakar Westerbeek

Want to learn more about Jakars conceptual framework? Contact him via jwesterbeek@kwinkgroep.nl.