“The world has enough for everyone’s need, but not enough for everyone’s greed.”

— Mahatama Gandhi

GLOBAL. International markets have been taken over with thought leader Rachel Botman’s “What’s mine is yours” concept, with success stories of sublime growth, like those of Airbnb, TaskRabbit and RelayRides, gain in popularity – and revenue. Today, there is a burgeoning need for collaborative production and consumption; the community shaped as a result is interdependent and thriving on personal connections.

To understand the development of this sharing economy, and how collaboration models can be successfully implemented by policymakers, we need to discern the factors that stimulate such growth. We also need to discern the elements that empowered the sharing industry, those elements beyond the implementation of efficient and sophisticated technologies.

he underlying factor that has given impetus to the sharing economy is the constraint of resources. Collaboration is no more a futuristic concept, but the only ray of hope in the dark tunnel not only of the economic crisis but also of the depletion of natural resources.

Depleting natural resources, such as water, coal, and oil, not only endangers powerful governments and multi-billion dollar businesses, but also questions our basic instincts to survive – Maslow’s hierarchy of needs at its crude best. This instigates a need to protect and use efficiently what we already have, leading us to discover new approaches for community-based consumption and by exploring underutilized assets or idle resources.

People are invited to use tools of innovation, like crowdfunding. Economies are invited to scale down unnecessary costs and wastage of resources via community building, coupled with advanced and smart technology deployments. And governments are invited to generate welfare and wealth by encouraging resilient market behaviors and innovation.

In the end, what is at play in the collaborative economy is beyond the realms of economic growth alone: creating value. As Nate Blecharczyk, one of Airbnb’s founders, said, “We couldn’t have existed ten years ago, before Facebook, because people weren’t really into sharing.” The big cloud makes sharing even stronger, and so, other industries follow suit.

It is easy to assume that possibilities are infinite when we annex the technological component to our model of sharing economy. But especially policymakers must know that collaboration can be successful without technology.

Arduously studied by the Harvard Business School, India’s “Dabbawala Case Study” is one such brilliant example. Dabbawala, the Hindi word for lunch box, is a case of millions of lunch-boxes supplied in India in form of reusable (recycling/upcycling) takeout containers, helping save resources, maximizing idle time and building personal connections as a community, hence contributing to overall welfare.

The Dabbawala case reflects all the features of a sharing economy, starting with the efficient use of resources. Statistics say that the steel lunch box container is used at least 350 times, and still looks brand new. The lunch boxes are rented with a sense of “ownership”. The consumer pays less while “owning” the box for a short period, adding to the consumer surplus via consumer satisfaction.

But what if a a consumer decides not to return the container or damage it in some other form?

Here begin the challenges for policymakers, and the questions they should ask themselves before launching a sharing model:

  • How can sharing models remain accountable and transparent? Online, customer profiles can be checked, but how can governments ensure this for other models?
  • How can we create a consumer market large enough, but not too large, to sustain the ecosystem of sharing?
  • How can we create sustainable innovative technology-related and business management-related strategies to bolster and maintain consumer loyalty?
  • What legal regulations framework can we use to monitor, and reform, the policies that constitute the concept of “ownership”?
  • How can we adapt sharing models to different cultural barriers? What preferences of “ownership” do we have to consider when working across cities, regions, countries? Quite simply speaking, Americans are open to booking hotels via their Facebook profile, while citizens from other countries might find this daunting.

The future of the sharing economy will see the glorious sun of surplus and growth only when nation states identify opportunities to utilize their sleeping assets, establish legal shareable environment and implement mechanisms for robust growth. It is then the myth of the “shareable city” will really come to life.