Australian businesses are increasingly looking at the opportunity to share assets as they are put under new competitive pressures from globally insurgent competitors, according to a new study.
That will help drive the value of the sharing economy in Australia from $14.5 billion in 2016 to more than $55 billion by 2021.
The Commonwealth Bank’s (CBA) asset finance report, Equip: Changing Economies reveals that almost three quarters (74 per cent) of Australian businesses say they are not prepared for a new wave of digital and emerging technology-driven globalisation.
The authors of the report argue that the uptake of technologies, such as Internet of Things (IoT) and blockchain, has contributed to a new era of globalisation, allowing new international companies to sell direct to customers. This evolving marketplace is placing increased cost and revenue pressures on local businesses, with many feeling the pinch from overseas (86 per cent) and online (96 per cent) competitors.
It is not all bad news – nine out of 10 businesses indicated that they have seen positive impacts from the easier access to overseas suppliers, providing more choice and the increasing ability to directly import used machinery.
According to the CBA, the report showed the majority of Australian businesses (92 per cent) are actively considering sharing assets or resources to boost revenue and/or lower costs, as they adopt digital and emerging technologies to remain competitive.
Impact on businesses
Sylvia Terry, Managing Director of Asset Finance, CBA, said, “Businesses need to use technology to be responsive to the range of new local and global competition that is taking place right now. Those businesses that look to new technologies to innovate and build new efficiencies into their operations will thrive and remain competitive.
“Encouragingly in asset finance, we are seeing businesses start to challenge the status quo of asset ownership and the high capital costs associated with it. Businesses are becoming savvy to the sharing economy and the benefits this can bring to capital-intensive industries.”
The value in sharing
Currently, only a small minority of surveyed businesses are participating in the sharing economy. From Commonwealth Bank’s research, just 9 per cent of businesses are currently sharing assets to cut costs and only 7 per cent are sharing underutilised assets to generate new revenue.
According to Terry ,“We know the sharing economy has the potential to help businesses maximise the utilisation and efficiency of their assets, however, it is an approach that has a long way to go.
“For a lot of businesses, the main barrier is trust. We know many businesses are willing to consider sharing assets from other businesses, but are hesitant to share their own,” she said,
“We see this as an opportunity where emerging technologies, such as smart contracts that run on blockchain could be applied on a trustable platform providing businesses with the structure and governance they need.”
The rise of a sharing economy highlights the impact of renewed business confidence and increased business investment, with nearly three quarters (72 per cent) of businesses surveyed in an expansionary or stable replacement mode.