Seoul Aims To Be World Capital Of The Sharing Economy
For the last several years, South Korea's capital has made the sharing economy a priority, funding a citywide initiative that has enabled dozens of startups to emerge. But they are still struggling to export.
SEOUL — What if the sharing economy could make cities of tomorrow more sober, more human and more sustainable? The idea may seem naive, but one of the largest cities on the planet is experimenting with it: Seoul.
With 10 million residents in the city proper, and almost 25 million in its entire urban area, the South Korean capital is the world's third largest megacity, after Tokyo and Mexico City. Since 2012, it has also been the first city to claim the Sharing City title: a new model in which local authorities are developing and encouraging large-scale collaborative initiatives, whether directly or via partnerships with NGOs or private companies.
In Seoul, the sharing concept extends to all manner of living: borrowing toys, tools or camping equipment, renting municipal halls for family celebrations, and even arranging time shares for parking spots. The collective initiative has also enabled more than 100 startups to emerge. They offer gastronomic parties (ZipBob), rooms in traditional houses (Kozaza) or suits and ties to rent (OpenCloset).
Originally, one man was behind this citywide program: Park Won-soon, the mayor of Seoul since October of 2011. With a past as a human rights activist in the 1970s, the lawyer and London School of Economics alumnus was elected mayor to everyone's surprise, with no official affiliation but relying on crucial support from the Democratic Party. As public data was becoming ever more accessible and public transport expanded, Mayor Park made the sharing economy one of his priorities.
"It's seen as a way to respond, at least partly, to different problems," explains Seonae Kwon, who heads the city government's team in charge of the program. "Seoul has become a very large urban area in a relatively short period of time. This has led to high levels of pollution and resource depletion. After fter the 2008 economic crisis, life also became very expensive, especially for young adults."
Growing the ecosystem
Beyond a public campaign touting the virtues of sharing, and the creation of an annual conference on the topic, the city has established sharing centers and has a program to encourage elderly people to live with young adults. A law promoting sharing has been passed to provide a legal framework, infrastructure and financial support for companies working in this field.
Creative Commons Korea, an NGO that emerged from the promotion of open source content, is being charged with the most visible aspect of the program: development of the website ShareHub, which tracks all such initiatives, for-profit or otherwise.
"We have many different roles," explains ShareHub executive Nanshil Kwon. "We connect startups and the general public, but we also spread positive developments and let the ecosystem grow."
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Downtown Seoul — Photo: Mariosp
Funded annual by the city to the tune of 70 million won (about $60,000), ShareHub also provides training sessions to startup founders. "Since last year, we've also had a collaborative entrepreneurship program for young students," Nanshil says.
ShareHub has 120 companies listed, more than half of which the city has officially approved, which gives them access to more financing. "For now, the platform is only open to Korean companies," Seonae explains. "They can be for profit or not, but they have to provide a service to the general public. On the other hand, foreign platforms such as Uber or Airbnb operate in Korea in a gray area: We still need to establish precise rules for their activity." Last year, local authorities prohibited the low-cost service UberX, under pressure from taxi companies.
Meanwhile, the Seoul Sharing City startups are struggling to export. "The language barrier and the small size of our market are such that our companies have trouble spreading their services to other countries," Nanshil says.
To open up internationally, the city has recently created a consulting group that includes Airbnb co-founder Joe Gebbia and Shareable's Neal Gorenflo. Another major challenge will be to make Seoul Sharing City more visible on a local level. According to a survey published last year by economic daily Maeil Kyongje, fewer than two in 10 Seoul residents say they know what the sharing economy is.
Gorenflo, who describes the Seoul effort as "unique through its size and the commitment of local authorities," acknowledges that publicizing such a project in a city with 10 million inhabitants is bound to take time. It means spreading the message that a city is not just a place of consumption, but also of collaboration.