“How developing countries can leverage the sharing economy to their benefit”

1.0 Working Title

“How developing countries can leverage the sharing economy to their benefit”

2.0 Background and Academic Context

Through an online website or an app customer to customer transactions are operating which are providing temporary access to goods and services with no transfer of ownership which excludes second hand economy in which goods are resold. With this said, public interest in sharing economy, also known as “collaborative consumption”, is growing, resulting in various impacts on today’s economic society. While there is no definite definition for sharing economy, one can look it as a web-based free compensation resource distribution (Cheng, 2016). The sharing economy idea really took off in 2011, when Silicon Valley companies Uber and Airbnb began making transportation and accommodation easy, affordable, and accessible for all. Uber now has a reported valuation of 48 billion dollars, and is one of the world’s most valuable private companies (Forbes, 2018).  It is due to the rapid development of digital technology which promote efficient use of resources which provides economic benefits for consumer product and services.

2.1 Research Topic

Easy access to services will provide a new opportunity for developing countries to afford high costs. The key benefits of the sharing economy in developing countries proposed by commentators include: improving the sustainability of consumption, enabling entrepreneurship and development and assisting with regulation.

(Retamal and Dominish, 2017). Due to increasing unemployment and technological in developed countries’ skilled workers are providing overseas services which leads to effect low-skilled workers of developed countries (Michel A.DI PIETRO, Esther Mirjam, 2007).

However the limitations of sharing economy includes that the most of the people will not own many things and they satisfy their needs through renting many essential stuff from others. Sharing economy lowers the cost of transaction which spells the end of large enterprise like Apple, Google, and Ford etc. The objective of this research is to understand how these drawbacks can be avoided with the support of World Trade Organization and how it is supporting developing countries to follow sharing economy. I will focus my research on the World Trade Organization and will also explore how effective the trade facilitation agreement is for developing countries, specifically those that are landlocked such as my home country of Magnolia as it recently ratified the trade facilitation agreement.

2.2 Key Academic Ideas.

2.2.1 Projected Growth. The increased revenue of traditional industries is relatively low compared to how much revenue is predicted to grow in the shared economy. Shared economy provides workers with the ability to have flexible schedules, and more than 2.7 million Americans are now independent contractors. Companies like Uber have provided 30,000 people in Tamil Nadu with jobs, and even provided training programs for 50,000 women throughout the entire country (Yaraghi and Ravi, 2017). Car sharing services can reduce greenhouse gas per household by 40%; this is critical in industrialized developing countries where new regulations have limited carbon emissions, for example, in India. 

2.2.2 Regulation and business formalization : Participants of sharing economy business realized a new industrial revolution which provides an opportunity for small enterprises in developing countries for global exposure. WTO also provides rules and guidelines on digital trade like a ratification of the WTO’s Trade Facilitation Agreement which provides more quick cross border transactions.(WTO, 2016 NEWS ITEMS) 

2.2.3 Innovation and Dynamic Capability behind sharing economy

Dynamic capability and Innovation focuses on the analysis of knowledge management problems and the development of new capabilities through the exploration and path-creation ideas of new processes, products, and services(Elena-Mădălina Vătămănescu Florina Magdalena Pînzaru, pp 75-94)

2.2.4 Vertical Integration. Organizations using sharing economy scheme follow vertical integration of technologies in developing countries. This includes digital Network features of both market ways and government regulation structure. Moreover physical infrastructure comes for free together with the human labor as it includes employment contracts (Florian Glatz, 2015)

2.2.5 Capacity Building. A 2014 Nielsen survey found a relatively high willingness of online customers in developing regions to participate in the sharing economy, showing “how the web can quickly become a part of the culture” (Welsum, 2016). The objective of trade organization share economy and capacity building as it provides people with skill and institution support from the organizations involved. When people have sufficient skills and resources to utilize the sharing economy, they can independently use it as trainings are provided and people from developing countries also participate in a sharing economy.

2.3 How does this research relate to existing literature?

To date, there has been little research on how trade facilitation agreements impact the sharing economy because collaborative consumption companies such as Uber and Airbnb do not typically export or import goods, but rather provide a service. This does not mean however that the share companies can go without standard trade regulation (Berglof, E. and Claessens, S., 2006). This study will aim to further explore the leverage enjoyed by the developing countries by following the sharing economy benefits.

3.0 Research Objective.

 The question this research will be answering is-

 How developing countries will leverage the sharing economy to their benefit?

The hypotheses develop after a preliminary review of  literature is the following :

1. Relevance of sharing economy for the developing countries.

2. Strengthening of private business sector in developing countries.

The specific objectives underpinning the research are:

1. Find clear indications that a sharing economy will contribute to financial success in       developing countries. – This is your hypothesis rephrased and not a research objective.

2. Identify how trade facilitation agreements contribute to a smooth transition to share economies. – This is not an objective but your hypothesis.

3. Identify the negative effects of a sharing economy. - How does this objective help you answer your research question and substantiate your hypothesis?

4. Identify barriers to a share economy in developing countries and what steps must be taken to overcome the barriers.

5. Compile recommendations for World Trade Organizations on how to efficiently bring a sharing economy into developing countries as a solution for a weak economy.

4.0 Methods and Access.

4.1 Research Strategy. I will be using interview method for finding out how developing countries use the sharing economy to the benefit specifically pointing out on the recent ratified trade agreement in Mongolia. The interview method is used to know about the benefits of sharing economy in developing countries.

4.2 Population and Sampling. The population would consist of citizens of the developing world as well as private sector business owners and employees of trade organizations. Two colleague living in the developing world have been selected as recipients of potential benefits of share economy.

4.3 Data Collection Methods. I will be using primarily secondary data for my research, consisting of data and research from academic books and the websites data from WTO. For the purpose of looking at something as broad as shared economy, it helps to see larger scale results, for example looking at statistics concerning trade flow. – You need to be much more specific. Exactly what secondary data will you be using, and why those?

4.3.1 Questionnaire. A self administered questionnaire asking questions about background (age, educational background, gender, etc.) will be sent to interviewees prior to the interview so more time can be spent focusing on the topic during interview. – Two questionnaires? There is no point in putting together a questionnaire for two people; this is not the purpose of questionnaires in research.

4.3.2 Interviews. I will conducting interviews with people from developing countries to get an inside perspective of how this type of economy is affecting them, how rapidly it is increasing, and how helpful it is in their opinion in improving the quality of life - plus the implications. I plan to interview a former colleague from the Economic Cooperation and Trade Department of the Ministry of Foreign Affairs to gather insight regarding what they are doing in that section of economy to promote collaborative consumption in developing countries and what is currently happening, how is the reactions from others, etc. Again, you cannot base your MSc dissertation on two interviews.

4.4 Analysis of result. Data from reports will be analyzed by personal stories to get better sense of the benefits developing countries using in relation to sharing economy. I will be analyzing the leverage developing countries taking under world trade regulations.

WTO is also investing on training government official for the safe and bebneficial implementation in developing countries because they have large quantities of digital trade and technology with valuable information.

4.5 Credibility of the Research. Credibility will be established through the triangulation method to gain a more complete understanding of the topic. – I am afraid I cannot see what you are going to be triangulating with what.

4.6 Access. The majority of the data I need is provided by the trade organizations online and from  two colleagues that I know personally. I am using this approach because it will be the best way to gather the most information I possibly can under the time given, and there are countless documents which are accessible to the public without a charge or problem of obtaining them.

5.0 Research Ethics

5.1 Confidentiality and Anonymity. There is a possibility that through my interviews I will obtain information that may be confidential or not intended for readers, but purely accidentally. I will preserve the anonymity of all the people I interview. I will also value their wishes and will delete or leave out any information they wish me to. I will also not force them to disclose anything they are not comfortable with. The rest of my information will be gathered from public access points online, so I will not come across any confidentiality issues there.

6.0 References

Burri, M. and Cottier.T (2012).Trade governance in the digital age, Cambridge: Cambridge Univ. Press. pp.17-91.

https://www.ipsos.com/sites/default/files/CanadaNext-The_Sharing_Economy.pdf

delingsokonomi.dep.no/files/2015/11/NOU_2017-4_chapter_1.pdf

https://www.ons.gov.uk/economy/.../thefeasibilityofmeasuringthesharingeconomy/nov...

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Retamal, M. and Dominish, E. (2017) The Sharing Economy in Developing countries.Prepared by the Institute for Sustainable Futures at the University of Technology Sydney (UTS) for Tearfund UK.

Michel A. DI PIETRO, Esther Mirjam GIRSBERGER, Alain VUILLE Swiss Federal Statistical Office (FSO), Switzerland

Knowledge Management in the Sharing Economy pp 75-94 Available at: https://link.springer.com/chapter/10.1007%2F978-3-319-66890-1_5

Florian Glatz, Available at : https://medium.com/@heckerhut/modes-of-contractual-governance-in-an-on-demand-service-economy-1833629f379b

Berglof, E. and Claessens, S.(2006). Enforcement and good corporate governance in developing countries and transition economies.World Bank Research Observer [online], Volume 21(1), pp. 123–150. Available at: https://www.researchgate.net/publication/44837462_Enforcement_and_Good_Corporate_Governance_in_Developing_Countries_and_Transition_Economies. [Accessed 20 Apr. 2018].

Cheng, Mingming (2016). Sharing economy: A review and agenda for future research.International Journal of Hospitality Management [online].  Volume 57, pp. 60-70. Available at: http://daneshyari.com/article/preview/1009173.pdf [Accessed 12 Apr. 2018].

Gamble, P. and Blackwell, J. (2001). Knowledge management.London, Kogan pp.45-110.

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Gansky, L.(2010). The Mesh: Why the future of business is sharing. Penguin.pp.3-70.

Frenken, K. and Schor, J. (2017).Putting the sharing economy into perspective.Environmental Innovation and Societal Transitions.p.p. 3-10.

Heinrichs, H. (2013). Sharing Economy: A Potential New Pathway to Sustainability.Gaia ,[online], pp 228-231. Available at: https://pdfs.semanticscholar.org/4e91/16758a648724c637597825af1065a8c50dbe.pdf [Accessed 20 Apr. 2018].

Farronato, C., Levin, J.Abele, M., Iacangelo, S., Brusson, N. and Schmid, C. (2015).The sharing economy, New opportunities, New questions. Global Investor 2.15.pp.6-54.

Macchiavello, R. (2009). Vertical Integration and Investor Protection in Developing Countries.SSRN Electronic Journal.

Taeihagh, A. (2017). Crowdsourcing, Sharing Economies and Development.Journal of Developing Societies [online], Vol 33(2): 191–222. Available at: https://arxiv.org/pdf/1707.06603.pdf [Accessed 20 Apr. 2018]

Retamal, M. and Dominish, E. (2017) The Sharing Economy in Developing countries.Prepared by the Institute for Sustainable Futures at the University of Technology Sydney (UTS) for Tearfund UK.

Welsum, D.V.(2016). Sharing is Caring? Not quite. Some observations about the 'sharing economy’.World Development Report 2016 [online], World Bank. Available at: http://pubdocs.worldbank.org/en/308161452529903561/WDR16-BP-Sharing-is-caring-DWELSUMl.pdf