By Fernando Jiménez-Ontiveros
Fernando Jiménez-Ontiveros joined the Multilateral Investment Fund (MIF) in 1999. He became deputy manager for operations in 2009 and has been acting as general manager since January 2015. Before the MIF, Jiménez-Ontiveros worked for the Spanish civil service as an economist.
The world's largest taxi company, Uber, doesn't own a car; the fifth largest lodging company, Airbnb, doesn't own a room; the biggest social network, Facebook, doesn't produce content.
These platforms allow a massive sharing of resources. Today's combination of disruptive information technologies and globalization has achieved the death of distance. Any individual or company now has full access to information and global markets in real time. This has unleashed the power of people to share ideas, financing, and goods and service in a way that has changed forever how we communicate, interact, and exchange ideas and resources.
The "sharing economy" has the potential to redefine the way we look at property, trade, jobs, living in a community--and even the way we use and protect our resources.
The People Who Share, a social movement based in the United Kingdom, defines the sharing economy as a "socio-economic ecosystem built around the sharing of human and physical resources. It includes the shared creation, production, distribution, trade, and consumption of goods and services by different people and organizations."
There are obvious socioeconomic implications of this massive liberation of human capital and resources. The economic gains are obvious, as transaction costs are drastically reduced and the use of idle resources is improved. In addition, this shift leads to a more equitable growth model, and has the potential to better allocate resources, and income generation and redistribution, helping a rising middle class to accumulate assets.
The sharing economy has a multitude of implications:
- This new economy helps fight the asymmetry between privileged and vulnerable people of access to information, markets, and financing.
- Shared ownership models, collective purchasing, and collaborative consumptions promote a fair distribution of assets and incomes. Therefore, they also pose a threat and challenge to traditional business models, distribution channels, and financial systems--but also an opportunity.
- The new model inspires reflection about how we are not fully utilizing the goods at our disposal (such as cars and housing stock), and how we could conserve the Earth's limited resources by sharing them
- This global exchange will help connect different cultures; it also will redefine our social networks: the people, places, goods, and services we consider close to us
- Furthermore, we are gradually moving to a labor market where there will be fewer employees and more entrepreneurs: Uber has only 2,000 employees, but an astonishing 160,000 contractors who own the vehicles used to provide Uber's transportation services
- Likewise, the challenges are multiple. For the sharing economy to flourish in emerging market economies, there must be certain elements in place: solid institutions, the rule of law, developed technology platforms, consumer protections, and trusted and secured payment systems.
Multilateral development institutions must step up their efforts to test pilot models of these new elements, and encourage a broad dialogue between the public and private sectors in emerging countries to help build the foundation for this new ecosystem.
There is no way back: the sharing economy is here to stay.
From the Multilateral Investment Fund Trends blog