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.
- No upfront need to invest in ownership of assets which might not be used on a daily basis.
- It also provides flexibility to experiment with new products.
- 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
- Negative Impacts
- Travel and hospitality will be badly impacted.
- Rising cost of sharing
- Global supply chains of people and goods may be hampered.
- Positive Impacts
- Huge growth for Virtual reality applications as well as e-commerce cum delivery businesses.
- Digital learning and conferencing will become the norm.
- Investments in mobile and fixed broadband networks and data centres will see a surge.
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