Energy Minister highlights ‘huge economic potential’ for sharing economy
New Energy Minister Matthew Hancock wants to make the UK the 'global centre' of the sharing economy, announcing a nationwide review into how the concept can benefit businesses
Led by Debbie Wosskow, chief executive of sharing economy advocate ‘Love Home Swap’, the review will assess the opportunities offered by the sharing economy business model, and ways its success can be expedited. For instance, the average car sits idle for 23 hours a day creating ample opportunities for car share schemes.
“The sharing economy is disrupting existing markets and changing the face of business,” said Hancock, who is also Minister of State at the Department for Business, Innovation and Skills. “By opening doors for everyday entrepreneurs to trade directly with each other online, these new market places are driving down costs and pushing the frontiers of innovation.
“There’s huge economic potential for the sharing economy and I want to make sure that the UK is front and centre of that, competing with San Francisco to be the home of these young tech start-ups.”
Headlined by companies including Airbnb and Zipcar, the sharing economy generates annual revenues of around £9bn and could reach £230bn by 2025. The concept’s environmental credentials are underpinned by a reduction in production as consumers and business take advantage of unused capacity.
Earlier this year, a report from Havas Worldwide found a broad support for the concept, with 70% of 10,574 people surveyed claiming that overconsumption is putting both the planet and society at risk; and half believing they could happily live without most of the items they own.
The sharing economy review was announced on the same day that Environment Secretary Liz Truss received criticism at the Conservative conference for a ‘lack of detail’ on how to tackle the UK’s environmental challenges, while Chancellor George Osborne was rapped for avoiding to mention any of the solutions needed to slash carbon emissions.
The sharing economy review will make recommendations based on the following remit:
- Challenge and define the concept of the sharing economy
- Explore the potential benefits of the sharing economy to the UK, as well as any risks it may pose to traditional industries
- Understand the main issues faced by businesses within the sharing economy, such as the role of insurance policies on new firms like Airbnb
- Understand the regulatory burdens faced by sharing economy companies
- Understand the barriers to digital trust
- Understand how the sharing economy can reach its potential in the UK
According to PwC, the ‘rapid growth potential’ of the sharing economy seems inevitable as several mega-trends – technological breakthroughs, resource scarcity, rapid urbanisation, social change and shifts in global economic power – start to collide and reshape the UK’s economic and commercial landscape.