UK's top five sharing economy models valued at £9bn by 2025
The top five sharing economy sectors could generate £9bn of UK revenues by 2025 as advances in technology, resource scarcity and social change start to interact with each other, according to new analysis by PricewaterhouseCoopers (PwC).
The five most prominent sharing economy sectors, currently worth just £0.5 billion, have been identified by PwC as peer-to-peer (P2P) finance, online staffing, P2P accommodation, car sharing and music/video streaming. PwC further predicts that global revenues from these five sectors could hit $335bn by 2025, up from just $15bn today.
According to PwC, this rapid growth potential will happen as several mega-trends - technological breakthroughs, resource scarcity, rapid urbanisation, social change and shifts in global economic power - start to collide and reshape the economic and commercial landscape.
PwC economist Robert Vaughan said: "Over the next decade, our analysis highlights the potential for significant value to be created by five of its most prominent sectors, playing an ever more pronounced role in the commercial landscape. But achieving this potential will require important regulatory and competitive challenges to be overcome."
Vaughan added that the UK was positioning itself to take advantage of this growth by developing progressive policies towards the sector.
"For example, the government recently brought insurance leaders together to work out how they can better serve sharing economy business models. And officials have just announced plans to remove laws controlling short-term rentals, opening up the door for short-term peer-to-peer accommodation sites to expand."
The sharing economy thrives on connecting the demand of consumers or businesses to spare capacity or spare assets. Early pioneers include companies such as Zipcar (recently acquired by Avis) and Airbnb.
According to PwC partner David Lancefield, a new generation of consumers who have grown up with digital technology increasingly want experiences that are individual, immersive, innovative - and interconnected across all the different devices that they use.
"That's a big challenge for many organisations, both to deliver against the promises that they give to these consumers or employees, but also, how they deliver against those in different generations all at the same time," he said.
"We're seeing the rise of popup networks and popup individuals across all sectors. These are organisations that are quite small at the core, but have built up a network of individuals in their hundreds and thousands that they can tap into, bring together, when they're building a business, changing focus, launching a new product.
"And then, when they finish, they can then scale down again. It's a far more nimble and agile approach that's disrupting and challenging the business models of larger organisations."
Big business is increasingly looking to tap into the sharing economy by turning this trend for collaborative consumption into a business proposition.
Last year edie reported on how some brand leaders are rethinking supply and demand channels for their particular sectors, and forming strategic alliances with smaller, start-ups to take advantage of this opportunity.