The sharing economy may have led to several multibillion dollar successes like AirBnb and Kickstarter, and brought community back into fashion in Europe, but it definitely has its share of critics. Many today wonder whether the sharing economy makes sense for the Arab world, and if it can solve any of the region’s problems.
A few month ago, Wamda contributors Gulay Ozkan and Ahmad Majid discussed how the sharing economy could help markets in Saudi Arabia, Turkey, and the rest of the Arab world and Wamda also explained how the sharing economy works and how easily it could be implemented in the Arab world. By now, a convincing argument has been made for the need to speed up the transition to a more collaborative region. But, if you still remain skeptical, here are four ways the sharing economy could tackle some of the region’s, and the world’s, biggest challenges.
“Accelerating poverty reduction and sustaining human development improvement are important challenges for the region in the future,” according to a recent World Bank report. In the Arab world, household consumption accounted for as much as 44% of the region’s economy, higher than China’s 35%, which indicates that as the middle class grows, consumers are buying more and more.
Sharing Solution: Sharing initiatives, like tool libraries for example, can reduce costs for families by lowering the rates of household consumption. At such facilities, books are replaced with tools in order to “mutualize” resources so that people don’t have to buy tools they would only use once in a while, such as saws, drills, or chisels. Each of these tools is available either for free or for a small fee, increasing the efficiency of each tool and helping users save money.
The sharing economy goes further than just helping you save money however; it can help you actually make money as well, by providing avenues for renting unused or underused items. Think putting your car in a car-sharing service, renting out unused rooms on AirBnB-like services, or sharing less-tangible assets such as time, and skills. Here is a list of services that could work in the Arab world.
Around 30% of youth in the Arab world want to start their own projects, a desire mainly driven by high youth unemployment rates which stand at around 25%.
Sharing Solution: The sharing economy lowers the barriers for anyone to run a small business; initiatives that support innovations, like coworking or hackerspaces, offer entrepreneurs a suitable environment to create and launch projects. People can also to fund their companies and ideas more easily in the sharing economy, thanks to initiatives like community-owned commercial centers, crowdfunding and crowdinvesting.
The sharing economy also makes it easier for people in the Arab world to work with clients across the globe, such as with the success of oDesk, or to even get a quality education for free thanks to MOOC classes – if you still haven’t taken one, I suggest to start with these.
Countries in the Arab world are highly dependent on food imports; although 50% of the Arab population is rural, agriculture, which is their primary economic activity, makes up less than 15% of GDP in the region.
Sharing Solution: Land-sharing allows a better use of arable land as it connects people who have unused acres with people who need land for cultivation purposes. Other initiatives help build local food economies that increase food security and cut prices as they reduce the number of intermediaries. These project include urban farms or community-supported food enterprise, such as France’s successful La Ruche Qui Dit Oui.
4. Traffic and pollution
Five of the 10 most polluted cities in the world are in the Middle East. In Saudi Arabia, vehicle exhaust is responsible for 50% of hydrocarbon pollution in the air. In Cairo, air pollution is more than 20 times the acceptable level according to the World Health Organization; living in Cairo is the same as smoking a pack of cigarettes each day.
Sharing Solution: Car-sharing reduces the number of cars emitting fumes on the road. It is different from traditional car rentals – users borrow cars by the hour and only pay for the usage - because users have to pay every time they need a car; they think twice before choosing a private vehicle over public transportation. Ridesharing, or carpooling, has the same effect, as it enables people going to the same destination to use the same car. Both solutions offer an alternative to owning a car, and less cars means less parking spots and less frequented city infrastructure.
In Europe, carpooling has been a massive success, moving millions of people each month. These initiatives have completely changed the transportation industry, and the Middle East is just starting to get in on the action. If done correctly, and at the right time, these services could have a huge impact on traffic and pollution in the Arab world.
The question now is: are people ready for the sharing economy in the Arab world? And who’s ready to get into the game? Some entrepreneurs already did, and are starting to get a lot of traction (notably in the classified ads department with startups like Dubizzle and Avito). As I’ve previously discussed, the list of collaborative startups is already longer than you would expect, so perhaps were getting closer to tackling these issues and solving some of the region’s greatest challenges.
Photo credit: SXSW.