Three reasons why the sharing economy is here to stay

Long gone are the days of the sharing economy being a space exclusively occupied by a handful of tech start-ups, today’s guest blog explores how it continues to grow and make a meaningful impact on how we do business...

You are reading an article from the Understanding the sharing economy series, to read more about this you can visit the series homepage.

Spacious is an online marketplace to rent office space, currently focused on start-ups and SMEs. The problem is that renting an office is an agonising experience. Our mission is to bring simplicity and transparency to this complex market to make renting office space easy, so that entrepreneurs can save time and focus on the things that really matter. Through doing this, we’ve learnt a few things about the importance of the sharing economy and why it has a bright future.

1. The benefits of sharing extend beyond monetary value

Whilst it’s clear that companies renting out space benefit from some extra cash in the bank and those residing may benefit from cheaper rents and more flexible contracts, there are far more compelling reasons for companies to share. Innovation cycles are getting shorter and ‘intrapreneurship’ is one of the hot buzzwords of the moment, where more established companies are trying to tap into innovative ideas and methods of working to keep pace with the world moving at rocket speed.

One of the most effective ways of injecting this directly into these companies is to share office space with younger and more dynamic firms, in which working in the same collaborative environment engineers the serendipitous conversations that can lead to bright ideas. This is effective because not only are you benefitting from the physical proximity to these ideas, but you can also offset any costs by charging for the office space itself. Moreover, it’s not just the larger companies that love the idea, but the smaller companies benefit from working alongside experienced professionals with different perspectives.

This phenomena is not just applicable to large companies sharing with smaller ones, but companies of all sizes benefiting from sharing space with those who are from similar, complementary or completely different industries.

The cross-pollination of ideas within the same physical environment is not something new, however, in an age where remote working is easier and cheaper than ever, space operators are beginning to recognise that a key reason people still use office space (rather than working remotely) is to benefit from the infrastructure and community around them. Innovations around workspace are popping up everywhere from the US (WeWork and Rocketspace) to London (Central Working, TechHub, The Bakery, The Trampery) which seek to create an environment conducive to company building with in-house mentors and workshops as well as legal and accounting surgeries to help small businesses access services that would be otherwise too expensive.

2. Sharing is becoming part of mainstream culture

The sharing economy has existed for a long time on a smaller scale, as part of the informal economy. Simple examples are multiple parties sharing a car to a party, borrowing your friend’s DSLR camera for a special event or letting a friend crash on your sofa etc. 

The rise of the formal sharing economy as we see it today has been enabled by the ability of technology to give us real-time information on availability of under-utilised assets that exist outside of our immediate network, and build trust around who you are transacting with and the quality of the goods or services in question. 

This has been formalised into the business models of some of the largest technology sharing economy companies (formerly start-ups) that we see today (Airbnb, TaskRabbit, Lyft etc.) which are quickly becoming some of the largest companies in the world and embedding themselves into mainstream culture. Typically peer-to-peer sharing has been mostly been limited to the consumer or individual level, but more and more firms such Spacious, are enabling sharing to happen between businesses at a much larger scale.

3. Sharing is creating a new industry in itself

The sharing economy becoming part of mainstream culture means that it is spawning an industry within itself. Every day we are seeing new stories of people buying homes just to rent out on Airbnb, buying cars to monetise using Lyft or Uber and Spacious gets queries from people wanting to lease office space just to share with others.

This is a whole new way of generating income that never existed before because of the power of technology. It’s a very exciting time to be involved with it. 

However there are still obstacles to overcome…

Whilst the sharing economy culture is becoming mainstream, some if it still remains a grey area. It is positive to see that the British Government recognises the sharing economy as a key part of the economy and is actively drafting policy to help all participants in the industry. I was invited (alongside the founders of pretty much all of the sharing economy companies operating in the UK) to 10 Downing Street for a roundtable to discuss how to help the sector. The British Government has made great headway in enabling the digital economy, no doubt the same is expected in the sharing economy.

-This is a guest blog and may not represent the views of Virgin.com. Please see virgin.com/terms for more details.

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