Context: With everyone adopting social distancing and self isolation, in the wake of forced sick leave due to COVID-19, discussions are ongoing regarding the decline of the sharing economy and creation of an isolation economy.

An insight into functioning of Shared Economy

  • A sharing economy based on the idea of prudence in ownership of things and efficiency in sharing of such assets. 
    • For e.g. it can be a car sharing through Uber or rental space sharing through Airbnb.
  • The rapid adoption of the sharing economy has been fuelled by huge venture capital investments in this realm.


  1. No upfront need to invest in ownership of assets which might not be used on a daily basis.
  2. It also provides flexibility to experiment with new products
  3. Value of assets are derived through high-capacity utilization by the service providers.


Changes due to COVID-19

  • Long before the COVID-19 outbreak, Society in a general sense had been increasingly getting isolated.
    • Joint families transformed rapidly into nuclear families in turn single families. 
    • New opportunities have encouraged people to move to newer locations in search of jobs. Technology has enabled one to work remotely, eliminating the need of an office space.
    • E-commerce and delivery systems have made the brick and mortar spaces obsolete.
    • Social media, Zoom calls and virtual house parties have increased means of connection with our closed ones.

Genesis of  Isolation economy 

  • Due to the rapid global spread of the coronavirus and subsequent isolation measures. 

Driver of Isolation economy

  • Technology  -with pervasive mobile broadband networks, smartphones and useful apps, we are able to experience reality virtually. 
  • Lockdowns globally have forced people, organizations and societies to experiment with new ways of being  leading to innovation.

Impact on businesses around the world

  1. Negative Impacts
    1. Travel and hospitality will be badly impacted.
    2. Rising cost of sharing 
    3. Global supply chains of people and goods may be hampered.
  2. Positive Impacts
    1. Huge growth for  Virtual reality applications as well as e-commerce cum delivery businesses.
    2. Digital learning and conferencing will become the norm. 
    3. Investments in mobile and fixed broadband networks and data centres will see a surge.


Image Source: Mint