New research into the collaborative economy in NSW has found that the sector has grown significantly over the last 12 months in terms of revenue, increased competition and business innovation.
The collaborative economy, sometimes called the sharing or peer-to-peer economy, links customers directly with providers typically through online and mobile platforms.
The types of goods and services available through the collaborative economy is growing every day, and includes car sharing, ride sharing, accommodation, second-hand goods, personal and employment services and other goods and services.
In early 2016, the NSW Government released its position paper on the collaborative economy, noting the significant economic and employment opportunities it presents. At that time, Deloitte Access Economics estimated that the value of the collaborative economy in NSW was $504 million and growing.
The government’s position paper is built on five guiding principles to position NSW to take advantage of opportunities presented by the sector:
- Support a culture of innovation
- Ensure regulation is fit for purpose in the digital age
- Maintain consumer protection and safety
- Promote competition
- Adopt an agile approach to government procurement
The position paper also acknowledges that the collaborative economy presents some challenges and sets out how the government will approach regulatory issues to ensure that regulation is fair and flexible for all market participants.
The latest findings
Twelve months on from the release of the government’s position paper DFSI engaged Deloitte Access Economics to provide an update on how the sector was faring. Deloitte’s report found significant markers of growth in NSW:
- Key existing collaborative economy businesses saw revenue growth of 68 per cent, from an estimated $1.6 billion in 2014-15 to $2.6 billion in 2015-16
- A number of new businesses have entered the market, services have expanded into regional NSW, and new niche sectors have continued to emerge
- Businesses providing financial services saw particularly rapid growth, with a 345 per cent increase in revenue. Crowdfunding and peer-to-peer lending are continuing to disrupt the financial services industry, competing with traditional providers
- Other categories analysed in the research also saw high revenue growth, including transportation and automotive (242 per cent); goods and redistribution (67 per cent); services and labour hire (57 per cent); and accommodation services (55 per cent)
- The number of people earning income through these platforms has also doubled – from 45,000 to 92,400 people.
Support for the collaborative economy forms a key component of the NSW innovation agenda, spearheaded by the NSW Government Innovation Strategy. The Strategy sets out government’s vision and actions for boosting innovation in the state, including ways to make Sydney and NSW even better for entrepreneurs and investors. We welcome ongoing feedback and comments, which can be submitted at firstname.lastname@example.org or through NIC, the NSW Innovation Concierge.