sharing economy and social entrepreneurship

8/18/2019 Sharing Economy and Social Entrepreneurship

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Table of Contents

1. Introduction.......................................................................3

2. Defnitions.........................................................................42.1 Social Entrepreneurship..........................................................4

2.2 The Sharing Economy..............................................................6

3. The Role o Sharing Economy in Social Enterprise.................!3.1. "onsumerism and the rise o Social#Sharing............................!3.2. Sharing#out and Social "apital................................................$3.3. Sharing Technology and Social Entrepreneurship...................12

4. Sharing Economy in %on#Digital Social Enterprises& "aseStudies................................................................................13

4.1. "olla'orati(e consumption...................................................134.1.1. Product Service systems.................................................................144.1.2. Collaborative Lifestyle.....................................................................16

4.1.3 Redistribution markets.....................................................................14.2. "olla'orati(e production ) landshare* ++,,-.......................1$

. "onclusion........................................................................21


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1. !ntroduction

Sharing as an economic practice is not an entirely new phenomena, it has existed for

centuries in one form or another. An example would be the formation of cooperatives

during the Industrial Revolution that provided a source of livelihood and sustenance for

out of wor mill worers !"orter, Scully #$%&'. (urrently, apart from providing access to

livelihoods or additional incomes for people !eg )ber', sharing economies are helping to

create ecologically sustainable growth with several organisations encouraging people to

share assets rather than own them !*eismann, Schmitt, Rohn, +aedear -#'.

The expansion of populations and establishment of industries changed the dynamic of

trade and instead of people selling to other people, individuals started organisations that

could harness economies of scale to mass produce commodities that could be sold at

lower prices with a greater distribution outreach to a large number of people. /ith the

growth of large manufacturers, it became increasingly difficult for smaller marginal

producers to sustain the drop in prices and they were slowly edged out of the maret,

therefore concentrating maret power in the hands of a few. Additionally with things being

mass produced, companies needed ways to sell their products in large volumes.

(orporations thus promoted consumerism by e0uating ownership with status and

reputation largely through mareting activities !(oen, --%'.

This paper aims to answer the 0uestion “$o% do socia! enterprises adopt aspects o&

sharing economy mode!s to e&&ecti'e!y de!i'er their socia! impact(”


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2. "e#nitions

2.1 Social $ntre%reneurs&i%

Social Entrepreneurship has been a focus of entrepreneurial studies particularly since the

early $-1s. It is the 2uxtaposition of two important but often contrary economic ends.

+roen down, the concept has two elements 3Social1 and 3Entrepreneurship1.

Entrepreneurship denotes the generation of economic value through the deployment of

resources. 3Social1 on the other hand alludes more to ensuring the distribution of

resources such that it benefits society at large.

There has been some dissonance on whether for4profit organisations i.e. those woring

with a motive of generating surplus can also be considered social endeavours or whether

the term should exclusively define those organisations that are not for profit !5air, 5arti

--6'.

7or the purpose of this research paper, the authors contend that the definition of Social

Enterprises should also include those enterprises that wor for the generation of funds

that can be ploughed bac into the enterprise itself and therefore aim to generate an

economic surplus.

/e therefore agree with the view expressed by researchers !especially in the early

---1s' that Social Enterprises can see to create value for customers, but instead of full

remuneration going to investors, as is the case with commercial ventures, the surplus

benefits of organi8ational activity accrue primarily to targeted beneficiaries !5arshall

-#-'. Thus, this is basically the application of maret4based methods to solve social

problems. Social entrepreneurship essentially marries two distinct and ostensibly

competing organi8ational ob2ectives9 creating social value and creating economic value!5iller, :rimes, -#'.

The enterprises that we have chosen to highlight in the later part of our paper therefore

adhere to our understanding of what the concept subsumes. ;ur definition for Social

Entrepreneurship synthesi8es our perspective. It is our contention that


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2.2 T&e S&arin' $conomy

There is currently no agreed upon definition for the ence, we would

explore some of the definitions the authors had based our woring definitions on but

would not go in4depth on the topic as it would not serve the purpose of the paper.

Rachel +otsman, the co4author of the boo


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3. T&e Role of S&arin' $conomy in Social $nter%rise

3.1. Consumerism and t&e rise of Social(S&arin'

Economist "aul Eins !pg , #$$#' defines consumerism as a culture where 33the

possession and use of an increasing number and variety of goods and services is the

principal cultural aspiration and the surest perceived route to personal happiness, social

status, and national success.11 In simpler words, there is an increasingly common pattern

across cultures to find meaning, contentment, and acceptance primarily through what we

consume. This has a deep impact not only on society by increasing ine0ualities, but also

an irreparable ecological impact. Estimates suggest that humanity now uses #.# time the

resources that can sustainably be sourced from existing productive land and sea

resources !Assadourian, -#-'.

A paradigm change in thining came in during the economic crisis of --$. Researchers

Ballis, 5artine8 and Corgaard termed the crisis


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Researchers 5arti and 5air !pg &, --6' social entrepreneurship in their paper. They

said


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According to +el, when sharing involves dividing something between relative strangers or

when it is an act such as providing someone with spare change, directions, or the time of

day, it is described as


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intensity of it is dictated by certain intra4group traits !/oolcoc, #$$%'. The measurement

of social capital will therefore be by proxy, through the measurement of its dimensions as

highlighted in the Integrated Huestionnaire for 5easurement of Social (apital by

/oolcoc et al !--'

#. :roups and Cetwors. Trust and Solidarity. (ollective Action and (ooperation. Information and (ommunication@. Social (ohesion and Inclusion6. Empowerment and "olitical Action

5easurement of actual levels of social capital generated by enterprises on these

dimensions is out of the scope of this paper. The authors would however lie to present

the hypothesis that social enterprises that utilise sharing economy models in their

operations see higher levels of social capital and therefore better engagement in their

communities and also propose this to be an area of further exploration.


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3.3. S&arin' Tec&nolo'y and Social $ntre%reneurs&i%

As noted in the paper 3Is Sharing Really caring= !'offline peer4to4peer !""' maretplaces

existed long before their online counterparts. At their simplest, "" maretplaces enable

individuals to transact directly rather than through a third4 party retailer. 7amiliar offline

examples include bustling maretplaces lie farmers marets, craft fairs, and flea marets.

Although participants might be re0uired to pay a booth fee, these marets enable vendors

to transact directly with customers !(heng, -#'. "" activities are also a common

feature of the informal economyJoften characteri8ed as commercial activity that is

unregulated and untaxed. The Internet and especially /eb .- has brought about many

new ways of sharing as well as facilitating older forms of sharing on a larger scale !+el,

-#'

Technology has helped sharing economy initiatives to scale up immensely. It has helped

people create communities that can share resources with each other. :reater access to

technology and proliferation of the internet, created mediums where people could

communicate faster and information asymmetries could be eliminated. Suppliers and

consumers could connect with each other without the re0uirement of an intermediary.

Specifically with the sharing economy moving online !eg. (raigslist', consumers also

receive greater access to information which helps manage ris and build trust.

Social enterprises that have sharing economy business models benefit greatly from

increasing confidence in online businesses as it induces more people to participate. It also

helps mobilise resources from around the world more effectively towards a social cause. A

socially relevant example would be an organi8ation called Rang ?e. Rang ?e is a

microfinance provider based in India that uses social media to support rural entrepreneurs

in the lower strata of society by helping them get microloans. The loan amounts can be as

little as @- euros and individual 3social investors1 can invest as little as euros to fund

pro2ects. The lenders are repaid the whole loan amount plus an interest rate lower or

e0ual to the prevalent ban rate. /ithout technology, connecting urban micro investors

with rural entrepreneurs would have been considerably harder.


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4. S&arin' $conomy in )on("i'ital Social $nter%rises*

Case Studies

In the case studies below we demonstrate how Sharing Economy models have been usedby social enterprises to further their cause and create meaningful change. The enterprises

we have showcased mainly have non4digital business models, i.e. they deal with non4

digital goods although they might be on digital platforms, except for Bhan Academy.

There are two types of sharing economies as identified by Gohn9 the economies of

production and the economies of consumption. !Gohn, -#'

4.1. Collaborative consum%tion

7elson and Speath introduced the term


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4.1.1. Product Service systems

The first category of product service systems is where consumers share a given resource

but do not necessarily own them or have to pay a fee for them. /hen participants do not

directly own the items, the delivery model resembles more of a business to consumer

!+(' structure where the enterprise usually owns the inventory and participants1

interaction with the business is of a borrower4lender relationship while the participants

themselves are sharing the resource. Such a system in the early days would have been

public sharing services lie public libraries or the use of public transportation.

In a study conducted by *atitude, the participants first identified sharing as borrowing or

lending an item for free before perceiving sharing as co4owning an item with others.

+orrowing and lending that could lead to monetary gains on one end was also deemed as

sharing by more than half of the surveyKs respondents but viewed with terms lie


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Through its website, i>ub also allows 2ob postings and further promotes through their

website offline events that they organises or hosts in their office space. In a region where

the governments lac speed of savviness to build the necessary infrastructure to support

entrepreneurial tech activity, !>ersman, -#' i>ub is serving an unfulfilled need. As a

testimonial to i>ub1s mission of catalysing and growing the Benyan tech community, i>ub

has seen over @- companies spun out of their community in the last years. !CairobiKs

Innovation >ub, -#@'

As noted, the participants in this case study do not actually own the worspace and the

e0uipment in it but are still able to en2oy the benefits that come with it. It is in this case as

stated by Bevin Belly in his article that access is better than ownership. !Belly, --$'The

authors however are not taing a stand on any one of the two options being superior and

posit that the advantage over the other differs on a case basis.

/e offer counter examples of sharing in the form of co4ownership, such as those found in

collective farms lie the Israeli ibbut8im. As emphasised by Spiro !#$@6', the ibbut8 is

an agricultural village where with only minor exceptions, all property is collectively owned.

!Spiro, #$@6' The ibbut8 also serves as an early example of another aspect of the

sharing economy that we would highlight in the preceding segments 4 collective

production.

The authors also found it interesting to note that the number of these communities started

decreasing in the #$$-s after a steady rise from the first ibbut8 in #$#- when factors

such as economic crises and globalisation started to affect them negatively. !TN8er, -#'

It was yet another economic crisis that again drove the sharing economy a decade or so

later !+otsman D Rogers, /hatKs mine is yours9 The rise of collaborative consumption,

-#-' but the numbers had not rose as noted in --%. !TN8er, -#'

4.1.2. Collaborative Lifestyle

The collaborative lifestyle segment is when participants come together to share and

exchange tangible assets through borrowing and lending between peers and also

intangible assets such as time and sills. There is a greater emphasis on ownership by

direct participants as compared to the first segment of product service systems.

A social enterprise that adopts this aspect of the sharing economy model is Streetban.

Streetban provides a platform for neighbours to connect and share with each other. /itha free to 2oin model, the social enterpriseKs mains aims are to promote en2oying oneKs

things and oneKs neighbours more. !Streetban, n.d.' StreetbanKs 7ounder, Sam


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Stephens, communicated that they had saved members over O--,--- pounds in -#.

Streetban also incorporates gifting where neighbours give away used things. A peer to

peer !""' model, involving tangible and intangible goods, Streetban serves mainly as a

platform in connecting the community. According to its website, there are currently over

6-,--- members sharing tools worth approximately #.@ million pounds !Streetban, -#@'

and it was voted one of The TimesK top @- websites you cannot live without. !The Times,

-#' Streetban estimates that they are providing access to anyone 2oining Streetban

an average of O&$ worth of things and sills at no cost and within a mile of their home.

They had further estimated saving #% tons from landfill in -# and facilitating the

meeting of #@-- people every month. !Streetban, -#'

A study on the car4sharing industry had found that in contrast to the altruistic model of

sharing, maret4mediated access of this type is primarily guided by self4serving and

utilitarian motivation rather than prosocial motivations. As commonly found in car sharing,

the type of access focused on in the study uses tangible ob2ects for short time periods

with clear property boundaries. !+ardhi D Echardt, -#'

In contrast, we see the social value that social enterprises lie Streetban is bringing

through adoption of the sharing model. Cumerous testimonials can be found on how

through the website, consumers had been able to mae a connection with their

community aside from the money savings. In a society lie the )B where a -# research

had showed that &- per cent of people unable to recall their neighbour1s full names.

!(hurchill >ome Insurance, -#', Streetban is helping to foster a stronger community

connection.

4.1.3 Redistribution markets

Redistribution marets function by encouraging unwanted or underused goods to be

redistributed by the owner to another4 Thus items are shared through a transfer of

ownership. These 3"eer to "eer1 exchanges are also more efficient since no additional

resources are used to create assets. The assets already in the possession of the

community are either gifted or exchanged within the community.

Redistribution marets are directly lined with de4growth. Authors 5artine8 Alier, "ascual,

?omini0ue, and Laccai !-#-' define de4growth as a voluntary societal shrining of production and consumption. Several authors also consider redistribution between peers

to be part of the downshifting movement. Authors Celson and Rademacher !--&' explain


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it as a phenomena where people become downshifters


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Exchange between Peers: Tradeschool

Exchange between peers as the name suggests runs on the premise that participants

would give away an owned asset !physical or intellectual' to another in return for

something they need. Also termed as +arter economy, estimates suggest that the trade in

this inds of peer to peer exchange might be in the range of P# billion per year

!Spit8nagel, -#'. Exact figures would be hard to find since a large part of the dealings

occur in the informal economy.

Even within the peer to peer exchange there are variations based on how locali8ed an

organi8ation is. 7or instance there are several websites lie yerdle.com for instance which

cater to a much wider audience, where members can list items and generate points for

each item they are able to give away and can then use the points to get other items that

have been posted by other users. Exchange can also be in the form of non physical items

lie in the case of Tradeschool where people within communities can teach each other

sills.

Tradeschool is a barter4for4nowledge networ which was formed in the year -#- in Cew

Qor by Social(are Ideas 7actory with the aim of maing practical tools sill available to alarger section of the population who may not necessarily have access to educational

facilities to learn them. The first Tradeschool event attracted %-- people and lasted @

days.

As per the founders of the movement, they wanted to use sills as a currency to empower

people and provide opportunities. The organi8ation believes that it is possible for

everyone to contribute meaningfully to development, even if they do not have financial

resources to do so. Tradeschool was born with the idea that social4learning can helpbridge the gaps of ine0uality in society. >ow it wors is, communities are encouraged to

create groups of participants who would lie to learn from one another. Instructors who

decide to conduct a session can then decide how they would lie to be reimbursed. /hile

no money can be exchanged, students can be ased for help !for instance to move

furniture' or to bring vegetables or even to teach a sill to the instructor.

Trade school offers development tools for people interested in creating schools in other

parts of the world, by offering to set up a free website and support from staff. Trade Schoolhas grown and now has affiliates in Europe, Asia and South America with schools in over

@- cities


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4.2. Collaborative %roduction + lands&are, --/

As with the many terms in the paper, collaborative production is also often used

interchangeably with crowdsourcing, commons based peer production, peer production, to

name a few. The authors define collective production in the sharing economy as when

participants produce goods and services collaboratively, collectively or cooperatively.

It is widely understood that aside from being able to share tangible things lie one1s food

or car, we are also able to share intangible things lie ideas and nowledge. >ence, the

following case studies explores collaborative production in the form of tangible items

!*andshare' and intangible items !Bhan Academy'

*aunched in --$ and spearheaded by celebrity chef and TF personality >ugh 7earnley4

/hittingstall, *andshare is a social enterprise1s initiative to promote garden sharing and

currently has over &,--- members. !landshare, n.d.' *andshare offers itself mainly as a

platform to connect people who are willing to share their available plots of lands !sharers'

and people who are looing to cultivate their own food but lac the land resource

!growers'. Additionally, people who simply want to help in any way be it the sharing of

nowledge of lending of tools to helping out on the plot are also welcomed to participate

!helpers'. *andshare fosters a community and provides relevant support through providing

documentation for agreements between sharers and growers to instructions on gardening.

Through helping to establish partnerships between hospice care to dementia patient

hospitals and volunteers, *andshare is producing intangible and hard to measure but

nonetheless valuable benefits to the community. This is exemplified in a case study found

on their website for the partnership between a dementia care home and a primary school

with the home involving the local community in the home1s vegetable garden. Through

this, the home is able to provide the residents with gardening activities that provideseveral benefits from helping to relieve their boredom to providing them a sense of

usefulness. /oring together with the children on gardening activities also provide a

common topic for discussion and hence help foster relationships. The children

volunteering also gain from learning additional gardening sills and learning how to relate

to people from other generations.

The collaborative production of intangible goods is highly related to a term coined by

>arvard *aw School professor Qochai +enler 4


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and to produce a shared outcome. !+enler, --6'. In his boo, +enler identified two

main reasons for the emergence of peer production. The first being the access to basic

physical capital that allowed the creation of digital materials and communication and

cooperation with others regardless of geographical distance. The second is the possibility

of tapping into a big pool of human interest, talent, nowledge and experience, where

people are willing to contribute and share for a cause they have an interest in. !+enler,

--6'

The social enterprise, Bhan Academy had adopted the collaborative production model into

its business model for expansion purpose. Bhan Academy started out with Salman Bhan

providing micro4lectures through videos to his family members via another "" platform,

Qoutube. /ord spread and students all around the world began using his videos to learn.

Students as well as their parents and teacher are now able to receive instant feedbac

and trac their progress through the online dashboard.

In -#-, Bhan Academy started porting their video lectures and tests into over #6 foreign

languages to extend their outreach to the non4English speaers. *ead by Bhan Academy

?ean of Translations +ilal 5usharraf, the pro2ect crowd4sourced volunteers from the

Internet to wor with Bhan Academy supervisors to create foreign language and closed4

caption translations and voiceovers for the lectures. Each language has an official


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0. Conclusion

The case studies and examples cited through the paper /e see to highlight how

utilisation of sharing economy models help these enterprises reach a larger audience,

generate social capital and and mae a bigger impact which could not have otherwise

been possible in a more traditional business setting. There are 0uestions however that

remain unanswered due to the lac of information available in the public domain for social

enterprises. It would be interesting to contrast the growth of enterprises which do not

utilise a sharing economy model to those that do using non financial metrics, lie gain in

social capital for the community. In furtherance of this paper, we would therefore

recommend a 0ualitative or 0uantitative study could be conducted to analyse the gains in

social capital for social enterprises that utilise the sharing economy versus those that do

not.

As documented, the sharing economy was historically born out of more altruistic

motivations, with a view to provide resources for those who have been disenfranchised

from the traditional economy. >owever the organisations we see today in the guise of

sharing economy do not truly fulfill this need. :overnments, social groups and labou

unions alie have been concerned about the lac of oversight. This is especially alarming

for individuals for whom the sharing economy is the sole source of employment since they

do not receive the same benefits !healthcare and pension' that they would otherwise.

Additionally the sharing economy is also threatening existing businesses that employ

possibly millions of people and is unable to cope with competition due to governmental

regulations for the protection of the employees !taxi unions for instance'. Therefore social

enterprises should now utilise more aggressively the tools available to address these

needs. 7or instance Tradeschool wants to utilise its peer to peer education model to

address racial discrimination and biases.


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sharing economy and social entrepreneurship

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