Nicholas Rosellini: Sharing Economy: Innovation and Governance

Dec 4, 2017

Nicholas Rosellini

UN Resident Coordinator and UNDP Resident Representative

Distinguished guests, ladies and gentlemen:

Good afternoon,

It is a pleasure to join you here today. I would like to acknowledge the Cyberspace Administration of China for organizing the World Internet Conference, the State Information Center and Didi Chuxing for co-hosting today’s sharing economy forum with UNDP. Online technology has been a backbone of social and economic development of the past decade, and the emergence of the sharing economy has opened new opportunities for sector leaders, entrepreneurs and practitioners. It has become an important topic in the context of sustainable development, and this event will offer a great platform to share experiences, exchange ideas and discuss future directions.

Innovation and technology are key components of global development, and speed up change in many areas. Increased connectivity that new solutions offer create new ways of collaborating, sharing and find optimized solutions for local and global problems that face us. With growing Internet access and new online platforms in recent years, we have seen the scope of the sharing economy expand year by year to now encompass a broad variety of sectors and services. As a result, the sharing economy is having an increasing influence on the way we live, learn, work and travel. At present, China has nearly 600 million citizens participating in the sharing economy[1]. The expansion of mobile Internet is now offering more people access to the benefits of this emerging industry. For many, mobile technology has become central to their everyday lives. It is estimated that on average, people look at their mobile phone every 6.5 minutes, checking their phone 150 times a day! This is a new way of life, with its drawbacks and benefits.

In its spirit and principles, the sharing economy has significant potential to support the 2030 Agenda for Sustainable Development and the achievement of the Sustainable Development Goals. Its main idea is to use resources to their maximum capacity, reducing the overall resource needs, while expanding the beneficiaries. This has several positive consequences, while carrying some risks.

Firstly, in relation to the environment, the sharing economy can promote sustainable urban development by encouraging reduced and “green” forms of transportation to decrease carbon emissions. Car and bicycle share initiatives have made it both easy and affordable for people to choose environmentally sustainable methods of travel. The sharing economy can also encourage more sustainable patterns of consumption by increasing the ease of reusing and sharing. In this way, existing resources are used more efficiently, thereby reducing waste and easing pressure on services that have become stretched to capacity by growing urbanisation.

Secondly, the sharing economy can create social benefits through the promotion of human development. By expanding life choices, the sharing economy increases the opportunities available to individuals, enabling them to maximise their capabilities. It can also provide more equal access to services such as healthcare, education, employment and accommodation. For women, it may offer particular benefits, enabling more flexible work options that bypass potential barriers to formal work. Increased purchasing power at the household and society level could have significant benefits for gender equality on a global scale. Unlike many technological innovations in recent years, the sharing economy is based on peer-to-peer interactions, building community networks and strengthening social trust. By encouraging people to share and connect with each other, the sharing economy could be a powerful tool for social cohesion.

Finally, from an economic viewpoint, the sharing economy has great potential to stimulate economic growth. The sharing economy is making a growing contribution to GDP in many countries around the world. In China, the sharing economy is estimated to account for 10 per cent of GDP in 2020, rising to 20 per cent by 2025[2]. As an associated impact, the sharing economy will increase overall employment levels by offering flexible work opportunities for those who would previously have been unemployed. In the meanwhile, the sharing economy may also have a positive impact on efficient distribution of social resources through promoting more accurate matching of supply and demand. For China’s national priority to upgrade economic structure, the sharing economy will also be helpful to the transition to high-tech and service oriented industries, as well as encouraging a more sustainable model of economic growth.

However, with the sharing economy still in its early stages, we must be alert to the potential risks that this new phenomenon presents. For example, the beneficiary of sharing economy is not universally inclusive and tends to only cover certain groups. Many of the concrete sharing economy activities are oriented towards cities because the population density, but those living in the country side, particularly those in remote areas, often have reduced opportunity to participate due to lack of internet coverage, personal devices and knowledge. Other groups may also be excluded, especially the most disadvantaged members in our society like people living with disabilities and the elderly. The sharing economy also presents new challenges for traditional industries, which may need to adapt to growing competition and shifting consumer demands. While it creates new growth, it also affects existing sectors that no longer need to keep up their production levels. Governments have also been faced with issues related to regulation, with the risk of reduced protection for workers and consumers in this emerging industry.  

How do we balance these risks and opportunities? We can first proactively develop regulations that will safeguard rights and manage our social and environmental spaces. We need to ensure that the sharing economy respects the individuals that lie at the heart of its business model, rather than creating new pockets of inequalities. Second, we can promote inclusion through increasing Internet literacy and access among disadvantaged groups. It is these individuals who may stand to benefit most from the sharing economy, yet have less chances to participate. Third, we can support traditional industries to respond. By building capacity and improving access to technology, we can ensure a more sustainable transition. Fourth, we can maximise the impact of the sharing economy for poverty reduction, by widening its scope to focus on more essential resources such as food and health, the sharing economy has the potential to help the most vulnerable in our community. Finally, we can encourage public- private partnerships to guide healthier and responsible development of the sector.

UN sees the importance of the development of sharing economy and is keen to maximise its contribution to sustainable development of the world. This is an exciting, but somewhat unchartered territory, but cannot be ignored. We look forward to extensive exchange with all of you, and hope to explore the opportunity for us to work together for a better future for all.

Finally, I wish today’s forum great success and hope it stimulates productive discussion.

[1] According to a 2017 report from State Information Center

[2] According to a SIC estimation.

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