Innovation, Creativity, and Entrepreneurship: Shared Economy Report

This report delves into the shared economy, examining its opportunities and potential threats. It begins with an executive summary outlining the report's focus: discussing the advantages and disadvantages that emerge from the shared economy, comparing traditional and shared business models, and offering recommendations. The report explores the benefits for workers, businesses, and governments, such as increased flexibility and resource utilization. However, it also acknowledges disadvantages, including potential exploitation of workers and disruptions to traditional business structures. The report includes a critical analysis of the collaborative economy, incorporating the Zoom2u business model in the courier industry, and concludes with recommendations for effective implementation of policies and strategies to overcome challenges and enhance business potential. The report also includes a SWOT analysis of the courier industry.

Running head: INNOVATION, CREATIVITY AND ENTREPRENEURSHIP
Innovation, Creativity and Entrepreneurship
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Executive summary
The aim of this report is to discuss about the opportunities and threat that may get emerged from
the initiation of the shared economy. In addition, the key differences between the traditional
business model and the shared economy model had been discussed. It had been concluded that
shared economy is having both merits and demerits. Shared economy model is a new age
concept that is being extensively implemented by various organizations which attracts and
involves more number of customers. Thus, it is being recommended that, effective
implementation of the policies and strategies will help to overcome the challenges and enhance
the business potential.

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Table of Contents
Introduction......................................................................................................................................3
Advantages of the collaborative economy.......................................................................................4
For workers..................................................................................................................................4
For businesses..............................................................................................................................4
For government............................................................................................................................5
Disadvantages of the collaborative economy..................................................................................5
For workers..................................................................................................................................5
For businesses..............................................................................................................................6
For government............................................................................................................................6
Critical analysis of the collaborative economy................................................................................6
Collaborative economy model in courier industry..........................................................................8
Initiation of the collaborative economy.........................................................................................10
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

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Introduction
With the rapid evolution in the lifestyle of the customers and with having technology
advancements, several business organizations are initiating initiative and distinctive way of
creating value to their customers (Forbes.com 2017). Majority of them are not directly
competing with the traditional players in the particular industry, rather than they have
implemented innovations in their business activities to enhance the value being offered by the
existing competitors (Bucherer, Eisert and Gassmann 2012). They key competitive advantage
that is being possessed by them over the traditional players is their way of delivering the
products or services to their customers. These organizations have promoted the theory of sharing
or collaborative economy in the current business scenario.
The key business model being followed by the organizations in the collaborative
economy is delivering the existing products or services in the customers in an innovative way,
which will prove more convenient to the customers (Kostakis and Bauwens 2014). This model
helps these organizations in creating competitive advantages over their traditional rivals.
However, with the initiation of the collaborative or sharing economy, various disadvantages are
being emerging for the economy, government as well as for other stakeholders.
This report will discuss about the opportunities and threat that may get emerged from the
initiation of the shared economy. In addition, the key differences between the traditional business
model and the shared economy model will be discussed. Zoom2u is an organization operating in
this shared economy (Zoom2u 2017). Their business model will be evaluated in determining the
effectiveness of their competitors.

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Advantages of the collaborative economy
For workers
It acts as motivating factor for the workers and employees. This is due to the fact that, in
the case of the shared economy, employees have the options of working at their own
convenience without being controlled by specific corporate rules and regulations (Tricker and
Tricker 2015). Thus, the productivity of the employees get increased in the shared economy.
Another advantage for the employees in shared economy is the broad earning opportunities. In
the case of shared economy, employees will not be bound by any limit of their income, rather
than, they will earn money as per their given effort and time. Employees have the flexibility of
working from their convenience in the case of the shared economy (European Economic and
Social Committee 2017).
For businesses
Enhancement of the performance of the employees will have favorable implications on
the business organizations. The organizational productivity will get increased. The talent pool for
the organizations to select their employees will also get increased due to the fact that, more
employees will be available for these organizations due to their increased convenience
(Srivastava and Kaul 2014). Shared economy mostly operates based on renting rather than
purchasing. Thus, organizations will have the continuous flow of customer demand in the
market. Due to the fact that, organizations in the shared economy does not have to follow the
corporate rules and regulations, thus, their cost of operations is also low compared to the
traditional organizations.

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For government
Shared economy runs on the theory of reuse and recycles. Unused and spare items are
being commercially used under this concept. Thus, for the government, it is beneficial due to the
fact that the available resources are being effectively utilized. The rate of unemployment will be
reduced (Williams 2012). Organizations in the shared economy will have broader reach than the
traditional business organizations. This is due to the reason that, traditional organizations select
their employees on the basis of certain criterions that are not applicable for all, whereas in the
case of the shared economy, the individual skills possessed by the candidates are being leveraged
by the organizations. Shared economy also helps in sustainable development of the society,
which is beneficial for the government (Griggs et al. 2013).
Disadvantages of the collaborative economy
For workers
In the shared economy, employees are being deprived from the basic amenities from their
workplace. In the case of traditional organizations, employees have the benefits of various
monetary and nonmonetary perquisites, which are not available to the employees in the shared
economy (Kwon and Hein 213). Thus, employees facilities in the shared economy is less
compared to the traditional organizations. Another key disadvantage for this concept is the
probability of fraud. This is due to the fact that, shared economy organizations runs on the basis
of shared community (Francis et al. 2012). Thus, they do not have the affiliation and recognition,
which is required by the traditional organizations. Moreover, the core motives of shared
community get diluted due to the presence of large capitalist organizations.

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For businesses
Traditional business organizations will be adversely affected due to the emergence of the
shared or collaborative economy (Pourmohamadi and Dong 2013). The traditional business
structure will get disrupted due to this. In the case of the shared economy, organizations have
less control on the business operations due to the reason that the employees in these
organizations mostly works as freelancer. Thus, probability of occurrence of unwarranted
incidents will be more for these organizations.
For government
Due to the fact that, organizations operating in the shared community does not need to
adhere with corporate rules and regulations, thus, government get deprived of having corporate
tax from them (Badertscher, Katz and Rego 2013). Thus, the tax structure will get affected
adversely. Moreover, the employment being generated by these organizations in on temporary
basis and thus, it cannot be treated as the yardstick of reducing the rate of unemployment. Thus,
eventually the actual unemployment will not get reduced.
Critical analysis of the collaborative economy
Various literatures are being done to determine the effectiveness of the collaborative
economy. Researchers have been given both for and against the potentiality of the concept of
shared economy. According to Heinrichs (2013), shared economy is the new mean of
sustainability. Under this concept, communities and societies are being involved in the business
activities. Thus, holistic up liftment of the society can be achieved. According to Huckle et al.
(2016), advancement of the internet and technologies is further enhancing the potentiality of the
collaborative or shared economy. They also stated that, the majority of the organizations

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operating on the basis of shared economy are being driven by internet and technologies. This is
due to the fact that, the majority of the organizations driven by this concept are providing
customer convenience by the means of internet.
Several researchers such as Hamari, Sjoklint and Ukkonen (2016), have thrown the light
on the motivation of the people in getting involved in the concept of the shared economy.
According to them, the freedom and flexibility that are being offered by these organizations is
the main motivating factor for the people. People those who are joining in these organizations are
enjoying the flexibility of working. It is up to them that too what extent they want to associate
with the particular job. However, several other authors have given the opinions that there are
various negative effects of initiation of the concept of collaborative economy. According to
Sundararajan (2014), the key negative implication of this concept is their immunity in adhering
to the rules and regulations for the corporate. According to the author, organizations driven by
this concept are being treated as the community driven platform rather than a full-fledged
corporate organization. Thus, according to him, this may pose challenge for all the stakeholders
in future. This is due to the fact that, any type of mishaps or fraud that may get generated in their
course of business, which cannot be prevented.
According to Owyang, Tran and Silva (2013), the negative impact of the concept of
shared economy will also adversely affect the government also. This is due to the fact that, one
of the key earnings of the government is from the corporate tax. Thus, due to the reason that
organizations in the shared economy are not adhering with the legislations, thus, government will
not receive any tax from them. Thus, according to the author, at the end of the day, the whole
economy will be adversely affected. Therefore, from the above critical analysis, it is been seen

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that, initiation of the shared economy is having both advantages as well as disadvantages for the
whole economy as well as for all the stakeholders.
Collaborative economy model in courier industry
The current scenario of the courier industry is showing positive trend with generating
annual turnover of $171.6 billion. It is growing at the rate of 2.4 percent and being forecasted
that it would grow by 2.2 percent by 2022. Majority of the market share are being hold by
FedEx, DHL and Australia Post. However, the traditional business model drives all of these
organizations (Wang, Jie and Abareshi 2014). According to the traditional business model, the
core business activities of the organizations include initiation of effective organizational
structure and procedures and effective promotion of their products in the market, which will
result in inflow, and outflow of cash (Casadesus-Masanell and Zhu 2013).
Figure: 1
Traditional business model
In the case of Australian courier industry, the key activities of the players in this market
involve having employees, warehouses and other resources in order to drive their business
activities effectively. Distribution hub is being maintained by them in order to effectively carry

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out their distribution activities (Rushton, Croucher and Baker 2014). They are also maintaining
transportation for quick and secured transportation of the couriers. Sales and marketing is being
done on an extensive manner in order to attract more number of customers. The main criteria of
enhancing the value creation of the customers in the traditional business model are quick
delivery of the products with less chance of damage. FedEx is the leading business organization
currently operating in the Australian industry. The main competitive advantages that they
possess are the timely delivery of the logistics material to their customers (Wagner III and
Hollenbeck 214). Technological advancement and innovations help this industry to enhance the
value creation of the customers. Technologies are being involved in letting the customers track
the status of their orders by own. Moreover, online availability enable this industry to help the
customers in choose their pick and drop location more effectively.
SWOT analysis will be used to determine the external and internal threats and
opportunities of the courier industry in Australia. The key strengths of this industry are the
market penetration among the customers. Courier service is having no close substitutes in the
market. Moreover, with the reduction in the service cost, more and more customers are being
attracted. The key weaknesses include the dependence on the third party transportation medium
for the distribution of the orders. This caused delay in the service delivery due to the
inconvenience caused in the mode of transportation.
Opportunities include the rapid advancement of the technologies in this filed. The more
effective will be the technologies, the more will be the effectiveness of the service delivery.
Moreover, with the emergence of the e-commerce sectors, opportunities are more for this
industry. This is due to the reason that, the goods in the e-commerce sectors are being delivered
by the courier organizations. Threats are also present in this industry and the key threat is from

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the internal environment. Emergence of the shared economy concept in this sector is also posing
threat to the traditional players operating in this sector. Organizations driven by the sharing
economy are offering the similar services at more cost effective manner. Thus, the market
potentiality of the traditional business organizations is decreasing.
Initiation of the collaborative economy
As discussed earlier, more and more organizations driven by the concept of collaborative
economy are entering in the courier industry in Australia. One of the prominent entrants is
Zoom2u. They are offering courier services to their customers similar as the traditional players.
However, their competitive advantages are the cost effectiveness that they offered to their
customers. According to the concept being followed by them, the employees are not being
selected for permanent basis, rather than they join the organization as freelancer and as their
interest. Majority of their employees are fond of traveling and along with that, they are earning
money through delivering the orders of Zoom2u. Thus, the transportation cost is being reduced
for this organization (Redding and Turner 2014). This helped them in providing cost effective
services to their customers.
Thus, according to the model of shared economy, the core business activities of Zoom2u
are being operating on the basis of sharing of activities by their employees. In addition, the
competitive advantages that they are possessing over their conventional competitors are the cost
effectiveness and the initiation of latest technologies. Initiation of the newer technologies is
helping them in providing more convenience to their customers. Zoom2u enables the customer to
track the real time movement of their orders along with selecting the chosen delivery person by
own. This feature enables them in enhancing the value creation of the customers.

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Moreover, the reach of the collaborative economy is more rapidly increasing than that of
the traditional business model in this industry. This is due to the reason that, the more
involvement of the people in the shared economy model is helping to generate positive word of
mouth. SWOT analysis will be initiated in order to determine the future opportunities and threats
for Zoom2u. Strengths of Zoom2u include the initiation of the latest technologies in their
business activities. More implementation of the technologies will help to enhance the
convenience of the customers. In addition, due to the fact that they are driven by the concept of
shared economy, the cost of operation for them is less. Employee cost and other cost of resources
are less for them due to the fact that, employees are working in this organization as freelancers.
The weaknesses of them include, less experience in the market. Being a new entrant in
this industry, Zoom2u do not have the required brand equity or identity compared to other
traditional players. This may have adverse impact in attracting new customers. Moreover,
reliability of the freelancing employees is not proven and it may hamper their service
effectiveness. Opportunities of this organization include advancement of the technologies. This
is due to the reason that, with the advancement of the technologies, more and business
opportunities will be generated for them. Zoom2u may also have certain threats for them, which
include initiation of the shared economy model by the established player in the market. Another
threat includes fraud committed by the freelancing employees, as they do not have direct control
over their employees. This may have adverse affect on their business potential.
Conclusion
Having analyzed the various aspects of the shared economy model over the traditional
business model, it can be concluded that shared economy is having both merits and demerits.