How does this type of cooperation work? What is its impact on markets and consumers? And to what extent are sharing economy projects affected by the stifling economic conditions and the state of uncertainty surrounding the global economic scene?
The sharing economy or the participatory economy is an economic model based on the sharing of resources and services between individuals through digital platforms in particular.
The sharing economy enables consumers to access a variety of services and products in a more economical and convenient way, and enables them to make better use of available resources, reduce costs, and communicate easily through innovative digital platforms.
Extensive benefits for individuals
Sayed Khader, an economist, told Sky News Arabia that the culture of the participatory economy offers wide benefits to individuals, in addition to its important societal role in development and economic growth, as it contributes to improving the income level of individuals and achieving a decent life for them, in addition to providing many of job opportunities for both sexes.
- The sharing economy relies on digital platforms such as smartphone applications and websites. These platforms connect service providers with individuals who are looking for these services.
- The sharing economy allows people to share their personal resources such as cars, housing, tools, equipment, and even skills with others. For example, a person can rent out their car to others through their own app, or rent out a room in their home to visitors.
- This pattern allows for better utilization of resources. For example, instead of having a car that sits in the garage often, you can rent it out to people who need it when you’re not using it.
- The sharing economy can contribute to reducing costs for individuals, for example, renting a car for a certain period may be more effective than buying a new car.
- Consumers can also easily access services through sharing economy platforms, without having to deal with long and complicated procedures.
- Sharing provides consumers with a variety of services and products to choose from, allowing them to satisfy their needs in a different and varied way.
- The sharing economy can support local people by offering additional income opportunities, whether that be through renting out their property or providing their services.
Stifling economic conditions…and the sharing economy is the “solution”
In his interview with “Sky News Arabia Economy”, Khader indicated that the current economic conditions encourage the spread of such a culture, especially with high inflation rates and the tendency of central banks to adopt strict monetary policies by raising interest rates.
He added, “These factors may encourage or push many individuals to liquidate their businesses and put their money in banks with the aim of obtaining high interest in order to avoid facing the challenges posed by such situations (..)”.
Accordingly, individuals can go to search for different resources within the “participatory economy” by employing the resources they have in a different way, as well as benefiting from the resources of others as mentioned.
There are many examples that show the versatility of the sharing economy, showing how people can jointly benefit from services and resources, improving efficiency and reducing waste in the economy.
- Car sharing applications that allow individuals to rent out their cars to carry passengers.
- Homesharing sites that enable homeowners to rent out rooms or homes to travelers.
- Personal service sharing platforms, such as those that allow people to provide services such as cleaning, maintenance, and tidying up for others.
- Home meal sharing applications that allow individuals to deliver meals to consumers.
- Online education websites and platforms, which allow individuals to offer online educational courses to those interested.
- Personal training applications that allow experts to provide personal training services over the Internet.
- Tool and equipment sharing platforms to allow the rental of tools and equipment to other individuals.
- Clothing and accessory sharing applications that allow individuals to rent clothing and accessories for events.
Government incentives and facilities
With the multiplicity of different examples of “sharing economy” projects in this way and their remarkable development, and in light of the current economic conditions, Khader points out the importance of governments’ interest in providing investment incentives and facilities for this type of projects to encourage them to grow, given their broad positive repercussions on society.
The economist stresses that to increase the participation rate among individuals in projects, especially small and medium enterprises, or even resort to family shareholding companies and projects related to the participatory economy, governments must provide incentives and government initiatives for individuals, while overcoming obstacles and challenges and removing bureaucratic complexities (..).
He added that, for example, also in countries in East Asia, this system is a pillar of economic development, so those countries provide many incentives for small projects that are based on the participation of individuals, indicating that for this reason the countries of the Arab region must eliminate bureaucracy and expand the system. participatory, with the aim of:
- Increasing job opportunities, given that such projects contribute to reducing poverty and unemployment rates.
- Improving the income level of individuals and families.
- The recovery of the internal market, and thus achieving a balance in prices, especially in light of the crises the world is witnessing and the recent rise in prices.
As for consumers, the economist stressed that the participatory economy would stimulate the process of increasing consumption and provide many benefits to consumers, given that it provides services and goods in a simple and cost-effective manner.
What future awaits these projects?
And just as the “sharing economy” projects present enormous opportunities for individuals in periods of stifling economic conditions, in terms of providing suitable solutions to exploit their resources (and obtain a profit accordingly) or exploit the resources of others (and thus relatively reduce expenses), they face at the same time broad challenges in that. Periods, including, for example, the impact of the wide price hike on these projects, in contrast to various other challenges.
The economist, professor of finance and investment, Mustafa Badra, says that the participatory economy is naturally affected by the economic conditions and their challenges, such as changes in the currency exchange rate, global inflation, and the stopping of global supply chains, pointing out that these challenges have different impacts from one country to another.
And he adds, during exclusive statements to the “Sky News Arabia Economy” website, that all the current challenges and the stifling economic situation globally require finding opportunities for individuals to confront these challenges, and the participatory economy is one of the solutions. Because it is a form of development that reflects on individuals by reducing unemployment and increasing job opportunities and income resources.
On the future of the participatory economy in light of the current challenges, the economist expects it to become more technologically advanced, with increasing citizens’ interest in this aspect of their lives and the development of technology, in addition to more financing projects.
Badra believes that the participatory economy and collaborative production will create more projects and businesses, whether small or large, in the future, which will lead to an improvement in the level of development all over the world.
On the consumer level, he expected that in the future, individuals would be able to obtain more goods and services more easily than is the case now, and this type of economy could help reduce prices in the market.
He advises that there be an expansion of the sharing economy and that the challenges faced by investors in all fields be reduced by providing a set of facilities, indicating that the future depends on the ability of countries to contribute to the implementation of projects in a way that achieves the interests of individuals and society as a whole, by applying governance and preventing corruption.
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