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Scottish expert advisory panel on the collaborative economy: evidence paper

Published: 29 Jan 2018
Directorate:
Economic Development Directorate
Part of:
Economy
ISBN:
9781788515627

The Scottish Expert Advisory Panel on the Collaborative Economy makes recommendations on how Scotland can position itself in the collaborative economy.

52 page PDF

548.1 kB

52 page PDF

548.1 kB

Contents
Scottish expert advisory panel on the collaborative economy: evidence paper
6. Participation of consumers and providers, and digital skills

52 page PDF

548.1 kB

6. Participation of consumers and providers, and digital skills

The fourth evidence session of the Scottish Expert Advisory Panel on the Collaborative Economy in September 2017 focused on participation of consumers and providers in the collaborative economy, and digital skills. Agenda and minutes of the meeting, as well as any submissions received, are available online [34] .

a. Background

It is important that all consumers are able to access and contribute to the opportunities offered by the collaborative economy and should be suitably empowered and protected when they decide to do so. It is also important to recognise the potential for a broader business base to seize these opportunities too, which requires supporting digital innovation and transformation both within existing and emerging businesses.

The lines between consumers and business are changing. Traditionally, businesses produced goods and services that were then purchased by consumers. The collaborative economy is changing this interaction, with people now acting as providers as well as consumers, across a variety of platforms. Trust has been described as the cornerstone of the collaborative economy [35] and facilitating trust is critical to its operation.

The collaborative economy offers significant opportunities to grow the Scottish economy. However, to realise these opportunities, there is a need to ensure that Scotland’s existing business base is effectively supported to compete and participate, and to ensure that the right conditions are created to allow emerging business models to be developed.

The panel recognised that Scotland needs to develop digital skills to enable its business base to transform and compete in the evolving market place and prepare its current and future workforce for the digital workplace by ensuring they can access courses to gain or update the skills required.

This chapter builds on the previous ones, as issues around participation cut across tourism, transport, finance, and other sectors of the collaborative economy. Some of the relevant opportunities and challenges have therefore already been covered in previous chapters.

b. Scotland specific data

YouGov found that 35 per cent of Scottish adults had used a collaborative economy platform. It also found that most Scottish consumers have had good experiences when using collaborative economy platforms, with 64 per cent of those them reporting the level of service received as good or very good. However, it found that if Scottish users of these platforms were to have an issue with poor service, just 43 per cent would know how to make an official complaint.

Moving to digital skills, the ICT and digital technology sector in Scotland employs 91,000 people and requires 12,800 new entrants each year to meet both replacement and growth demand. To achieve this target, the Scottish Government launched the “Business Excellence Partnership”, which to date has invested £8.7 million in initiatives such as DigitalBoost (a national programme of workshops, one-to-one support and online advice) and #hellodigital (a state-of-the-art centre in Inverness showcasing digital technology to SMEs). In addition, £9.5 million has been made available through Skills Development Scotland to support a programme to tackle shortages in digital skills in Scotland, including the launch of CodeClan, Scotland’s first Industry-led digital skills academy.

In recent years, there has been an increase in the number of students undertaking computing and digital technology related qualifications. However a significant gender gap remains at all levels of qualification [36] , and there is a demographic divide in digital skills, with those in social housing, those with incomes below £20,000, and those over 60 consistently being less confident in performing a variety of online activities [37] .

Overall, 26 per cent of businesses in Scotland currently undertake activities to develop employees’ digital skills, with a further 18 per cent planning to do so in the future [38] .

c. Opportunities and benefits

The changing role of consumers was highlighted in relation to opportunities for the collaborative economy in a range of evidence submissions to the panel. Key points included:

  • Extent to which the collaborative economy offers individuals the opportunity to become service providers, for example by enabling them to generate income from under-used assets such as homes and cars.
  • Opportunity for individuals to become more active participants in the provision of public services, and in democratic processes or social movements. For example, individuals supporting maintenance or running of public assets, and public sector services making use of under-used assets.
  • Diversity and flexibility of opportunities available to provide and be provided with goods or services, enabling individuals to balance these opportunities with other work or caring commitments, and to become providers with minimal capital outlay.
  • Ease of access. Citizens Advice Scotland ( CAS) noted that “ consumers are able to access the goods and services that they want, often on terms that best suit their needs”.
  • Improvements in digital connectivity providing individual in rural areas with access to platforms to sell their goods or services.
  • Potential to grow entrepreneurial activity and business start-up, including opportunities to start businesses while still in regular employment and to translate a casual use of collaborative platforms into full-time business activity.

d. Challenges and barriers

The key challenges and barriers identified in relation to participation in the collaborative economy were:

  • Issue of regulation of individuals entering the collaborative economy as providers. Citizens Advice noted that “ the regulatory framework for consumer protection was not designed with a digital, collaborative economy in mind. It is likely that this framework will need updating, without creating burdens that could inhibit the collaborative economy’s development”. The same issue was raised by the Society of Chief Officers of Trading Standards in Scotland ( SCOTSS).
  • Challenges around the blurred distinction between consumers and providers (this is covered in the chapter “ Workers’ rights”).
  • Potential lack of awareness and understanding of the existing legal and regulatory framework by individuals and small businesses entering existing markets through collaborative platforms, and need for clearer guidance and definitions to inform providers and support the enforcement of regulations. Citizens Advice noted that “ there are different sets of protection that cover business-to-consumer and consumer-to-consumer transactions that most consumers are not aware of”. For example, “ less than 40 per cent of consumers know that they have fewer rights when buying from private individuals”. An additional problem highlighted by the Federation of Small Businesses ( FSB) is that “ in relation to enforcement, the shortage of frontline regulatory staff has been broadly ignored for many years”.
  • Increased risks for consumers in the collaborative economy, with CAS listing a number of reasons for this: numerous small providers who might not be aware of regulations; lack of information regarding these providers; increased difficulty for consumers to enforce their rights; and increased potential for fraud. For example, as noted by SCOTSS, “ counterfeit goods once offered at market stalls are now sold via social media”.
  • Limited knowledge of opportunities for individuals to engage with the collaborative economy, as both consumers and providers.
  • Need to encourage collaborative platforms to provide alternative dispute resolution ( ADR) mechanisms, and ensure that “ platforms use greater consistency in branding and scheme structures, and that consumers have free access to ADR scheme”, as suggested by Citizens Advice. Where available, 25 per cent of UK consumers use these schemes when things go wrong. However, SCOTSS noted that “ ADRs have not enjoyed the success or provided the protection and benefits that consumers anticipated”.
  • Shortage of digital skills, exacerbated by insufficient investment from employers. In a survey of 1,250 citizens advice bureau clients, CAS found that 18% never used the internet and 64% would need support to complete a form or apply for a job online.
  • Inadequate broadband and digital infrastructure, especially for individual and small businesses in rural settings. FSB pointed to the Office of Communications’ (Ofcom) data showing that “ currently Scotland lags England on every measure of digital connectivity – with a particular pronounced problem associated with mobile coverage in rural Scotland”.
  • Need to build trust among consumers using collaborative economy platforms. As noted by SEUK, “ A common challenge in the sharing economy is building trust. That is why SEUK launched the TrustSeal in July 2016 which is an independently awarded kitemark, given to sharing economy companies that can show they uphold good practice principles”.

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