Sharing Economies: The Impact of Online Platforms in Social Exclusion and Economic Marginalisation in South Africa

Abstract

The concept of sharing economies is a developing phenomenon that is highly prevalent in international economies and currently exists in South Africa as well. However, the concept of sharing economy is not totally accepted and practiced to its optimal potential. This study focuses on the population of South Africa that is considered to be socially excluded and economically marginalised. Theoretical data indicate that these individuals form part of the lower income citizens and are part of the bottom of the pyramid. This study provides evidence that the concept of sharing economy can be used via online platforms to optimise economic growth opportunities so as to minimise the current gap of social exclusion and economic marginalisation. Current literature specified that the barriers to economic growth with sharing economies in South Africa are due to a lack of internet access, unemployment, education, health and governance. South Africa is a developing nation and with the aid of enhanced governance with regard to sharing economies, training and development and cultural diversity acceptance, sharing economies is a potential catalyst to attaining equality and bridging the gap of social exclusion and economic marginalisation.

Keywords

Acceptance economic marginalisation equality sharing economies social exclusion online platforms

Introduction

Sharing economy is a global topic (Parente et al., 2018). Sharing economy can be defined as ‘A means of using online applications to conduct business and online activities to develop economies, this is seen as a network’(Wentzel et al., 2016).Internationally, majorly conducted using online platforms (Belk, 2014) it is said to be new, innovative (Gatautis, 2017) and contributes to more social welfare (Heinrichs & Grunenberg, 2012) by creating employment opportunities. It is often discussed regarding its contribution to sustainability (Frenken, 2017; Plewnia & Guenther, 2018; Wu & Zhi, 2016) as it appears as a solution to many problems around the world, such as social exclusion and economic marginalisation. Due to the fact that sharing economies and online platforms can be used to enhance economic activity and take advantage of economic opportunities.

Neuwirth (2017) explains why sharing economy is nothing new in Africa and has been a part of business issues ever since, but without technology and applications from Web 2.0. It had just been seen as‘just offline’. However, the question is did the online sharing economy reach South Africa as well and similar to western countries? As it is said to create more equality in consumption and to minimise economic marginalisation (Hamari et al., 2016). The international method of implementation of sharing economy is based on online platforms, and internet is a prerequisite. Theory states that in South Africa more than half of the inhabitants are connected to the internet. Around 75% of youngsters, up to 24 years, are connected (International Telecommunication Union, 2017). That makes South Africa (together with, e.g., Madagascar and Gabon) a country whose spread of internet is higher than in every other country in Africa (International Telecommunication Union, 2018). Thus, the assumption is that theoretically online sharing economy could have reached South Africa and there is a large part of inhabitants that are viewed as highly socially included. However, external factors that affect this social exclusion in South Africa and individuals’ access to online platforms, such as the level of literacy and access to internet in areas that are less developed are highly prevalent, indicating that theoretical assumptions are in fact misleading and results in individuals being socially excluded. The lack of free and accessible internet as a cost factor to South Africans in lower earning households will also be taken into consideration and made reference of. Sharing economies and online platforms is on arapid rise, as it has been driven primarily by factors such as economic recession, increased environmental awareness, internet technology advancement and widespread use of social media (Yeh Lin et al., 2017). This study will lead to the understanding of need forthe use of online platforms to assist South African society in minimising social exclusion and economic marginalisation.

South Africa is seen as a developing nation post democracy and has implemented many strategies for growth and development as a nation. Although there have been significant developments through policies, there is still much that needs to be developed and addressed in terms of those in need. This study focuses on sharing economies pertaining to online platforms that can be utilised as a tool to help South Africa develop as a nation and as an economy.

Sharing economies can be defined as a new economic model based on the internet and smart devices, which has boosted its popularity and received great public attention (Guo et al., 2019). When considering online platforms, South Africa has been advancing its economic development though online platforms and online applications that have been used in both public and private corporations. This has given rise to many opportunities of international corporations becoming part of the South African Economy. The concept of sharing economy is a vast developing trend and being accepted internationally. Thus South Africa has to learn how to optimise opportunities for growth using this tool, not just for corporations but also in the inclusion of small businesses in the country and as well as for those who are unemployed and looking for opportunities for economic survival and growth.

Background

Sharing economies exist in the international business world and can be understood as a means of networking and structuring online business. Examples of online platforms used around the world are Uber and Airbnb. These are the classical online companies that are used for research around the world when trying to gain a perspective of sharing economies and the impacts that it has. The sharing economy, often phrased as ‘platform capitalism’, enables firms such as Uber and Airbnb to monetise, through specific technologies of mediation, the networks, the assets and the precarious labour of those who are described as ‘the entrepreneurs of sharing’ (Pollio, 2019). This, however, can be seen as opportunities that exist only for those who have access to these online platforms and internet and also have funds to do so. As these classical examples mainly affect first world countries and have now slowly broadened its perspective into South Africa. The fourth industrial revolution and globalisation has made room for countries to interact and assist in the growth and development of each other’s economies. Users of these platforms are able to share labour, homes, cars, intellectual property and otherassets. The upside for each side of the market is obvious, those who need an asset can enjoy greater availability and a lower quality-adjusted price; those who have an asset can enjoy a financial return on (or the asset might otherwise go underutilised; Sinclair, 2016).

Research indicates that this interaction does not include the lower income groups that form part of the bottom of the pyramid (BoP). The BoP can be defined aslow-income markets, mainly offered by private sector (Arnold, 2018).Such that ‘Poverty is mostly concentrated in the traditional areas and urban informal areas’ (Mathebula, 2017). Hence, it then can be stated that social exclusion and economic marginalisation exists in South Africa. The aim of this study is to explain the relationship between online platforms of the sharing economy and the impact that it has in overcoming social exclusion and economic marginalisation.

The Impact of Sharing Economies on Social Exclusion and Economic Marginalisation

Social, economic, political and cultural contexts are interwoven and determining one another. Thus, social exclusion often relates to both a lack of material resources and/or capabilities, such as insufficient social participation or integration as well as access to services (health and education) and necessary goods, and the consequent lack of power (Arnold, 2018).

South Africa may be understood as ‘an economy with barriers that prevents individuals and groups from participating in the economy and society to their full potential’ (Clark, 2019). This then leads to a social division of labour which can be understood in three ways:

First, the workers are based and living in areas around the workplace. ‘The fact remains that all production has to occur somewhere, it remains deeply place based’ (Castree et al., 2004, p. 12).The result of this is that workers have to be spatially divided. ‘So most economic activity has persistently local dimension’ (Castree et al., 2004, p. 12). However, this is not always the case as ‘South Africa has a unique blend of first and third world economy. This means that the gap between rich and poor is enormous. In the large cities there is often only a few hundred meters between the wealthy suburbs and the poor townships.’

Second, workers of the 20th century have become immensely interdependent. This affects workers both locally and globally. This creates a problem as not all work situations are dependent on each other and workers are expected to maintain a level of independence. The interdependence of workers is referred to as the stretching of social relationships, such as local companies that develop means of networking their business using online platforms, and example of this is Gumtree or OLX that is used in South Africa.

Third, the social division of labour at a global level has led to a complex landscape. This can be divided into geographical difference and geographical interdependence. This is referred to as the dilemma of geographical scale (Castree et al., 2004, p. 11).In this aspect workers have to choose if they want to work only in their regions or will accept workers from other geographical areas. This is difficult as workers feel insecure when other workers gain jobs in their locations.

The aspect of social construction deals with interpretations resulting from socialisation and the manner in which it influences the individual’s life from their own perspective and as well and the interpretation of socialisation into the organisation. Social reality is imperative for the functioning and communication in an organisation. As to ensure that individuals feel a sense of belonging and need to be part of the economy of South Africa. The result of social exclusion and economic marginalisation is that individuals are not being included in opportunities for economic growth, such as that of sharing economies and online platforms. Due to the fact that all individuals have different interpretations of what is expected of them and what the social environment of the organisation expects of them. It is essential that a common ground is established. An example of this common ground can be identified as norms and values of the economy. In order to survive on a social level in organisations, individuals have to adhere to these norms and values. This leads to a common purpose and creates an understanding that is vital for communicating in the organisation.

According to Kyriakidou (2011) in relation to change in organisations and the role of social construction and reality: ‘This approach requires that one pays more attention to the relational qualities of ongoing interaction processes among the parties involved, and that the individual and the organization are conceptualized as inextricably linked rather than separate entities to be related’ (Kyriakidou, 2011). ‘Specifically, the authors take the relationship as constructed by employees as the focus of analysis, illustrating that by focusing on the relational quality of the interface between individuals and organisations, new possibilities for dialogue among parties can be created and new ways of intervening can be contemplated’ (Kyriakidou, 2011).This plays a key role in establishing a common purpose, due to the fact that if there are too many views that are established then this will lead to many misunderstanding and errors.

One has to evaluate change as this occurs consistently in all organisations. In keeping with the study conducted by Kyriakidou (2011) it can be stated that when an individual enters an organisation and even when changes occur, individuals adapt to this according to their interpretation. Therefore, it is essential that these interpretations are correct as interpretation will lead to the socially acceptable patterns of behaviour in an organisation.

In essence it can be stated after the evaluation of Kyriakidou (2011) that individuals are faced with a dilemma when it comes to the interpretation of what is socially acceptable and expected of them in order to survive in an organisation. The aspect of reality then comes into play, whereby the individual had to adapt to the reality of what the organisation sees as socially desirable and acceptable. This reality can be identified as a common ground as many interpretations by individual’s are very different from one and other, and therefore will lead to problems in surviving socially in an organisation.

Understanding Sharing Economies and Online Platforms

Sharing economy is a rapidly growing economic model which has brought people efficiency and convenience; however, it also provides users the opportunity to misbehave, which has raised public concerns about the moral crisis that it might cause (Guo et al., 2019). This study will therefore discuss the positive opportunities of sharing economy and as well as public concerns related to security and governance. Based on the definition above, sharing economies are dependent on online platforms that are implemented via the use of the internet, hence this study will go further into a discussion of the role of external factors that contribute to the success of online platforms in South Africa such as access to internet, education, rate of unemployment and health.

South African organisations have been utilising online platforms over the past year and have become innovative and strategically advanced; the concern is that many of these benefits and advantages are not reaching the people of South Africa. Studies have indicated that there are international comparisons and literature available on the success of online platforms; however, there has been minimal research on this area in South Africa. Evidence also indicates that sharing economies and online platforms are tools that can advance economic development for a country and that this development is not just restricted to corporations and governance, but also beneficial to the population of the country if implemented optimally. The question then arises as to how South Africa could implement sharing economies in a manner that would serve to minimise economic marginalisation and social exclusion. This can be done by first understanding what the current obstacles are and thereafter finding a means forward to strategically overcome these challenges.

Internet Access in South Africa

The internet is seen as a core function of online platforms. However, unlike first world countries, South Africa does not have free access to internet, infrastructure is limited and the rates on data is high and not affordable to those that form the BoP. Hence, access to internet is very limited for those that form part of the category of socially excluded individuals.The lack of developed or developing infrastructure in rural areas also impact on the level of access to internet, as most people have to rely on public libraries and paid internet cafes to access the internet and are limited in amount of time that they actually have access to this. However, countries, regions or cultures having or using higher levels of technology, education, basic services, food, expectation of life and so on are very different from countries, regions or cultures developed otherwise; mostly indicated by higher levels of poverty, less education, limited basic services and expectation in life or specific diseases (Arnold, 2018). Thus, it can be said that the major challenge that South Africa faces with regard to social exclusion and online platforms can be addressed by wider access to internet.

The Bottom of the Pyramid

The BoP are individuals that are ranked as lower income and blue collar workers. Many of those that form part of the BoP in South Africa have low levels of education, are unemployed and have limited access to the formal economy of the country.

The seventeen Sustainable Development Goals stress unsolved global topics, such as mitigating poverty and exclusion. Inclusive approaches often highlight frugal innovations for the BoP and low-income markets, mainly offered by the private sector. In the context of sustainability, the private sector is both, a major driver of exclusionary processes as well as for enforcing new inclusive solutions enhancing quality of life, participation and incomes (Arnold, 2018). It is therefore evident that those who form part of the BoP are socially excluded and economically marginalised. It is therefore vital that measures are taken through initiatives in education, health, unemployment, governance and training and development to minimise existing gap.

Education

Recent studies have indicated that 60% of students in grade 5 cannot read and write to a satisfactory level. The number of South Africans that complete tertiary education has dramatically dropped over the past years and many that form part of the BoP in rural areas do not have any access to education (Okanga & Groenewald, 2017). Hence it can be said that the lack of education directly impacts on the use of online platforms in the sharing economies, as people are not trained or literate enough to be able to use these platforms, for personal survival or their economic contribution and stability.

South Africa has a host of dispersed and uncoordinated programmes and systems that are used to promote the usage of information and communication technology (ICT) at various levels of the education system, particularly in the formal schools sector (Isaacs, 2007). Some of the individual government departments of education have had their own provincial ICT initiatives for their schools. While decent work for all is the aim, the projected population growth in some developing economies and, inevitably, the projected higher number of formal jobs that these economies will need to create in the coming decades hint at the real difficulty of meeting this challenge in all countries (McKinnon, 2019).

Unemployment

The unemployment rate in South Africa is currently 60% of the population, the economy is currently in recession and inflation is soaring on a negative impact on those that are in the BoP. The majority of those who are unemployed are the youth between the ages 21 and 30 years. It can therefore be said that the youth of the country are being socially excluded and economically marginalised from development. Due to the limited number of employment opportunities, the youth can then turn towards entrepreneurship as a means of economic stability, online platforms can be the route to entrepreneurship and development of youth in the country. With regards to the youth and unemployment in South Africa post 1994, one can state that there are many evident challenges that are introduced. These can be identified as skill shortages, poverty, low literacy levels and poor qualifications to name a few. The major concern is the level of youth unemployment that exists. ‘ It is estimated that those aged between 15 and 24 accounted for some 89 million of the total 1921 million people out of work’. This alarming level of unemployed youth directly affect the growth of an economy and poses a challenge to work and labour in South Africa post 1994. In order to successfully manage business conditions at the BoP, companies must beinnovative in their approach and customise their products, production and prices tothe realities in BoP markets. Companies chasing high margins will miss out on the

opportunities at the BoP, while companies that think out of the box, innovate and

focus on overall profits are likely to thrive at the BoP.

The various reasons for youth unemployment can be listed as firstly the low level of literacy that the youth possess. ‘A total of 130 million young people are illiterate, having missed out on, or been forced to drop out of primary education in their childhood’. This is seen as their downfall, as jobsin the global economy require skill and education. Businesses of today also operate with high levels of technology, which essentially requires literacy. They are thus disadvantaged as there are jobs opportunities that are created both locally and internationally, but due to their low literacy levels do not have the required literacy and thus remain unemployed. ‘Unfortunately, in many cases the economies in which they live have been unable to provide opportunities that meet these expectations’. African countries are experiencing population growthrates of 5% annually. The South African population in particular is growing by an annual rate of 1.6%, with the rural population growing at a rate of approximately 0.17% annually (Rubio-Mondéjar & Garrués-Irurzun, 2016).

Sharing economy is seen as a method that can be used to include these unemployed citizens into the economy of the country, for example Uber creates an opportunity of empowerment through formalisation such that if drivers are able to prove the ownership of a car and go through the necessary paperwork, they can become self-employed entrepreneurs. Uber is then a technology that vitalises ‘dead’ capital, ideally moving it to the formal, sharing economy (Pollio, 2019).

Health

First world countries have been utilising online platforms as a tool to assist people to access health advise, rent a doctor or gain immediate medical assistance.Literature indicated that the majority of the current population prefer using online platforms for food rather than health, as the most popular platforms that are used in South Africa are manly Uber eats and food delivery companies. Overall, wellness and healthcentres, daycares, early childhood centres and immigrant and government service centres were praised for their contribution to wealth creation, for encouraging settlement and for contributing to the quality of life of localities (Picton & Skinner, 2015). Entrepreneurs and those adopting sharing economy platforms, need to look at current trends and patterns that exist and are successful in other countries and use that as a benchmark and guideline to develop similar programs in health that can assist the BoP while utilising sharing economies and online platforms

Governance and Accessibility

There has been a vast transformation in the work due to the changing nature of work in the 4th industrial age. It is therefore vital that organisations understand the need to manage this transformation with a systematic approach, so as to ensure that change and the method of inclusivity and accommodation of the diverse components of the workforce are implemented harmoniously and successfully. In particular, to attract and retain employees of all ages, appraisal and compensation policies and practices might be aligned with the idea of age diversity management, that is, the goal of treating employees of different ages fairly and with respect. Regulation and accessibility can be identified as the contributing factors to the lack of awareness and success of online platforms in the country. Strategic alignment and incorporation can predominantly have a positive impact on online platforms, if governance and accessibility are directed in the correct manner and are specifically inclined towards assisting those that are in the BoP, so as to ensure that social exclusion and economic marginalisation are minimised.

Examples of the exercise of economic power in economic life include: taxes and government spending; fiscal and monetary policy; health and safety regulations; environmental regulations; advertising and the sales effort; firms organising and coordinatingthe activities of their employees and the most basic, people spending money (Clark, 2019).

Based on the literature above it can be sated that governance plays a pivotal role in the successful adoption and implementation of online platforms, as it is a guideline and reassurance for those new to the phenomena, and allows individuals to understand what is acceptable or not in economic participation.

Training and Development

South Africa has strategically advanced in the economic development, due to the transition of labour processes and legislation that existed and was invented post-apartheid .The introduction of the different systems of work with the influence of the system of labour process has created a dramatic shift to the form of work in South Africa. In the current phase of globalisation, labour markets have been evolving in the direction of greater economic insecurity and greater levels of most forms of inequality, adversely affecting the opportunity of people to live a life of decent work and satisfactory employment. Training and development can be broken down onto two definitions. Training: ‘Bring to desired standard of performance or behaviour by instruction and practice’ (Lundy & Cowling, 1996). Development: ‘Make of become bigger or fuller or more elaborate or systematic, bring or come to achieve or visible state or to maturity’ (Lundy & Cowling, 1996).These concepts form part of strategic human resource planning and are highly influenced by job analysis. ‘Strategic training and development has a central part to play in bringing about the alignment of organizations Human Resource capability with strategies’ (Lundy & Cowling, 1996).

When it comes to the training and development of individuals, then it could be said that it consists of ‘A number of skills are instilled in employees through training and development’. This process entails ‘Training refers to a planned effort to facilitate the learning of job related knowledge, skills and behavior of employees’. Development on the other hand entails ‘Acquiring knowledge, skills and behavior that improve employees ability to meet the challenges of a variety of existing jobs and ones that do not exist as yet’.

The feature training and development can be used to assist organisations and as well as South Africans in developing small business or applications for online platforms. Training and development can be implemented in all the areas discussed in this study, so as to ensure that people that are currently socially excluded will then be able to become aware of opportunities that exist in the economy. This training and development can also assist in the level of insecurity and challenges that currently exist with the notion on sharing economies and online platforms.

Culture and Diversity

South Africa is known as the rainbow nation, as it has many different cultures and is extremely divers in all spheres. The difference in cultures result in the challenge in accepting and practicing differences and changes of traditional background and religion and as well as that of social class. Divisions of social class, based on ranking, hierarchies and inequalities are found nearly everywhere. However, the specific formation and particular relationality of social classes are bound by their cultural milieu, and productive sociological approaches used to identify and analyze class will be affected by, and have to account for, these specific markers (Silva, 2015).

It is common for inexperienced expatriate individuals to be taken completely by surprise at the deep cultural differences in their posted country, as South Africa has many immigrants that form part of our social economy. The differences in religion are one example. In other countries such as Thailand is graciously Buddhist, Indonesia is gently (but intensely) Islamic and Philippines is completely Catholic. As for Singaporeans, some say their only religion is work. Managing such varied peoples obviously requires very different tactics. It is therefore evident that these differences in culture and diversity are not restricted to South Africa, but exist internationally. South Africa can therefore adopt exiting online platforms and develop them further to suit their specific needs. Hence, creating employment and including those that are currently economically marginalised. This aspect of culture and diversity can also be linked with education and training and development in this study, as these concepts can be strategically implemented with the inclusion of creating and understating of culture and diversity.

Recommendations

The South African Government and international corporation that have invested in South Africa need to remain active in convincing mainstream industry that the current status quo is not in their interest. The old approaches are not proving to minimise the gap of social exclusion and economic marginalisation to date, as it is still prevalent.

Much work needs to be done on a local government level in terms of educating communities, managers, local economic development officers and soon how the industry of sharing economies and online platforms work.

There needs to be a better understanding of the market demands, and in addition, the absolute pre requisite of using a sustainable online frameworks or models. It must include representations of urban African culture social innovation; social innovation is a buzzword used frequently by policymakers in the context of development and marginalisation in urban and, recently, in rural contexts (Bock, 2016). Social innovation differs in its orientation on citizen issues, socio-economic fragility and problems resulting from welfare state reforms and austerity measures, which reflects the changing political economy of rural development with seriously limited state support (Bock, 2016).Cultural tourism entrepreneurs can be seen as a result of social innovation, where one must engage with organisations to ensure that they provide that much needed support to the existing enterprises providing quality cultural business opportunities. We must engage around initiatives like the cluster initiates, and see whether they bear fruit, and whether South Africa post 1994 is assisting effectively.

Companies and government must support those champions of cultural entrepreneurship that currently exist such as that of Uber, Airbnb and Mr D Delivery. We must benchmark what is good and working, and we must ensure that we continue to find ways to facilitate pro poor business linkages.

This can be achieved through social entrepreneurship defined as a key community agent who, formally or informally, uses communityassociations and networking to produce desired social outcomes. When entire communities adapt existing institutional arrangements to promote and foster the development of social entrepreneurs, the term ‘social entrepreneurship’ can apply (Picton & Skinner, 2015). Hence resulting in the implementation and adoption of online platforms of those who form the BoP.

Conclusion

In conclusion it can be said that sharing economies via online platforms can be used as an optimal tool to boost economic growth; however,much needs to be done to achieve social inclusion of marginalised communities in South Africa, as these individuals are currently not adopting the concept and benefiting from the opportunities that exist on economic growth. This study reflects that social exclusion of minorities is evident, and that South Africa can in fact strategically minimise this gap and great social inclusion with the aid of good governance and improvement in areas of education, health, unemployment, training and development and cultural diversity. This study has pointed out methods that can be used in the South African economy and methods that are not restricted to just companies and government, but also those individual’s that form part of the division of social exclusion in the country. Such as enhanced education surrounding the topic, training and development and incorporating cultural diversity into the concept of online platforms and sharing economies.South Africa is a developing nation with much opportunity and ability to grow its economy and overcome challenges that exist, by ensuring that the historically marginalised are included and actively involved in economic growth through meaningful participation.

Footnotes

Declaration of Conflicting Interests

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

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