Sharing Economy in Western Balkans: Potential for Rural Development (doi: 10.14706/icesos171)

Abstract: With the development of technology, especially information and communication systems, new ways of providing services emerged, based on the model of "collective consumption" or "sharing economy". This represents a trending economic phenomenon when it comes to consumption. Within sharing economy, consumers are organized by using specific technological platforms that enable them to innovatively consume or produce a particular product/service. These models provide maximum use of scarce resources on the basis of technological support and social capital of the community. Consequently, efficiency and confidence are essential for the functioning of sharing economy, whose size is estimated at 225 billion dollars by 2025. However, these trends are not evenly distributed and the development of the sharing economy depends on a series of conditions, which will be discussed in the paper. Thus, sharing economy makes tremendous challenges for all relevant stakeholders, especially the governments, in the context of adjusting the regulatory framework to meet its demands. Compared to developed countries, Western Balkan countries are significantly lagging when it comes to sharing economy. This is reflected in the lack of foreign and domestic investment in this area. The aim of this paper is to present the conceptual framework for this new economic trend, with the emphasis on the current state of sharing economy in Western Balkans. Paper will focus on the discussion of development potentials of sharing economy in the function of rural business development. Based on this, a set of recommendations will be made for improving the state of sharing economy in the Western Balkans. Keywords: sharing economy, Internet, rural development, Western Balkans JEL Classification: O18, O33, M1