What is the Digital Sharing Economy?

Sharing assets - physical, financial, and/or human capital -  
between many, without transferring ownership, via a digital platform
to create economic value for at least two parties.


The Power to Transform Emerging Markets

Commercial success stories, like Airbnb, Uber, and Kickstarter, are not designed for those at the base of the pyramid. The 2.2 billion people living on less than $2 a day typically do not have a room to rent, a car to share, or idle cash to lend. 

However, that doesn’t mean the sharing economy is irrelevant to the world’s poorest. Quite the opposite.

As digital sharing models grow in size and expand into new geographies, we think emerging economies are where these companies will truly flourish. Why? Because the heart of the model, sharing via technology, converts these markets' liabilities – scarce assets and abundant labor – into opportunities.

What’s more, those in emerging markets are, as a whole, more disposed to share: 64% of people in the world with access to the internet are willing to share their assets or services online for financial gain. In India, it’s 78%. In Mexico? 79%. In China? 94% of people with access to the internet are likely to participate in a digital sharing community, given the option. Compare that to the 43% of North Americans who express willingness to participate in online sharing. On average, we estimate that people in emerging markets are around forty to fifty percent more likely to engage in digital sharing – given access to the right tools – than people in the US and Western Europe. [2]

Let’s zero in on just one sector: digital sharing in finance, often called “crowdfunding.” Roughly 600-700 crowdfunding platforms are operating in over 45 countries, delivering approximately $35 billion to entrepreneurs and small businesses through lending and investment. To put that into perspective, HSBC, the UK’s largest bank, lent just under $1 billion to its customers in 2014. Even more interesting: these crowdfunding dollar volumes doubled from last year, and are growing fastest in Asia and South America. [3] 

The key principles that underpin current digital sharing models are potent and globally applicable. Organizations that apply them successfully can create tremendous value. Here we’ve laid out how the digital sharing economy can address three pressing development needs:

 
 
 

 

Apart from the three examples we've chosen above, there are many other current -- and future -- applications of digital sharing models, from disaster relief to peer-to-peer education. 

 
“Developing nations are already there. They are already ready for the digital sharing economy.”
— Parag Jain, CEO and Co-founder of Juggernaut, a startup powering on-demand tech platforms
 

We see five signals for high growth potential in digital sharing: Trust, digital connectivity, literacy, digital payment usage, and regulations supporting entrepreneurial activity. We synthesized data on each of these into the “Digital Sharing Readiness Score,” a simple, transparent measure showing which developing markets are more conducive or more challenging environments for digital sharing.

Digital Sharing Readiness Score by COuntry

See the methodology behind the Readiness Score here.