From ordering a taxi to borrowing capital from your peers, the industry – predicted to be worth £9bn by 2025 – is making it easier to do business

Many of us use the sharing economy in our day-to-day lives – from ordering a taxi to finding a room for the night. Doing more with less eliminates the need for entire teams of people to facilitate a service; a tap of a smartphone will suffice. This is an industry set to rocket in value to £9bn by 2025.



It’s also allowing the smallest businesses to innovate in new and exciting ways. A record 4.6 million people now work for themselves; new and established professionals alike are making use of the sharing economy to find new contracts, and fund as well as run their businesses.

Getting new contracts

The biggest concern if you’re a freelancer is where the next contract is coming from. The sharing economy addresses this by changing we way we find work. The emergence of online platforms such as Upwork, a digital network connecting freelancers and clients, allows users to browse available freelancers’ profiles and interview, hire and work with them instantly.

Rich Pearson, senior vice-president of marketing and categories at Upwork, said: “Businesses in the UK are increasingly turning online to find the skills they need. With access to a global talent pool, they are able to find the talent they need when they need it, and as a result are bypassing local skills shortages. In 2015, we saw a 30% increase in the amount of money UK businesses spent hiring talent online. At the same time, professionals are also taking advantage of online work opportunities and offering their skills and expertise to businesses around the world.”

Finding workspace

As the virtual office becomes an increasingly common way to run a business, with many digital enterprises no longer needing expensive office space, increasing numbers of “work hubs” are also popping up each month. Hundreds now operate throughout the UK. Work hubs often take advantage of otherwise empty industrial spaces, such as former factories, as a place for like-minded professionals to network, collaborate and learn from each other. Membership can be flexible too; space is often rented by the hour, day or week.

Spacehop, meanwhile, is an innovative take on the Airbnb concept: it connects freelancers with available home-office space wherever they need it. Homeowners can share their property on a day-to-day basis while they’re out, meaning freelancers can run their businesses with complete flexibility.

Looking further afield, Swedish firm Hoffice is going even further. It’s a network for people who work from home, aimed at connecting people with complimentary skills – graphic designers and coders, for example – so they can share workspace, network and collaborate.

Funding your business

Acquiring finance through bank loans and credit cards is no longer the only option. Now, crowdfunding and peer-to-peer lending services allow ordinary people to provide financial backing to an enterprise, assessing individual requests based on their aversion to risk and the future potential of the enterprise.

P2P lending is taking mainstream lenders by storm as services such as Funding Circle or FundingKnight use the internet to cut out banks. Anybody can put capital forward at minimal risk, cherry-picking the most responsible borrowers and allowing freelancers and small businesses to access finance that wouldn’t otherwise be available.

It’s a global phenomena; P2P lending in China alone topped $150bn (£105bn) in 2015. However, there’s still more to be done if alternative lending sources are going to spur substantial growth for the smallest businesses. More finance needs to be made available to those who need it – the British Business Bank, for example, is a partner of Funding Circle and makes a contribution towards each loan – and professional and trade organisations such as the Association of Independent Professionals and the Self-Employed (IPSE) have a role to play in raising awareness of these alternative funding resources.

It’s the same story for currency exchange. Until recently the most common means of sending money abroad was a high street bank, which would often impose high fees for doing so. Now, TransferWise matches two people who want to send money in opposite directions and pays out in the local currency, effectively initiating a quick, free trade. Users can access the mid-market exchange rate too. When in 1994 Bill Gates said, “Banking is essential, but banks are not”, it was surely this kind of innovation he had in mind.

So what happens next?

The explosion of sharing economy services has changed the commercial landscape for good. The UK’s digital sector is growing at three times the pace of the wider economy and traditional businesses in many long-established sectors may be left behind. But that can only be a good thing for freelancers; the sharing economy model is increasing efficiency and lowering the costs of doing business. It’s likely that we’ll see fundamental change in even more sectors in future as peer-to-peer platforms become more widespread.

Andrew Chamberlain is deputy director of policy at IPSE, the Association of Independent Professionals and the Self-Employed

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