How the sharing economy can transform asset-heavy industries

Businesses strive to minimise their carbon footprints, raise productivity and increase societal contributions. Yet sustainable solutions can be costly and may not result in higher yields through a business-as-usual approach. These trade-offs are of particular relevance against a backdrop of increased economic uncertainty due to the COVID-19 pandemic. The good news is that there are avenues which can advance these key imperatives without the need to choose between the environment, society, cost and productivity. The sharing economy offers one such avenue.

An exact definition of the sharing economy might be up for debate, however the basic concept includes elements of the sharing of underutilised assets in ways that improve efficiency, sustainability and community contributions. The sharing economy has grown exponentially in the last decade and is expected to continue growing at double-digit rates. It has been enabled by rapid digitalisation and cultural shifts. Some of the best-known examples include Airbnb and Uber, which revolutionised the accommodation and transportation service industries to the point where “uberization” has become a business term.

The sharing economy concept seems to be as old as humanity, however the opportunities it is creating are still not fully appreciated. Traditionally, it has been viewed as something best suited for consumer-facing businesses with opportunities to pool assets owned by others, like apartments or cars. However, there is growing evidence that the principles of the sharing economy can also be leveraged by asset-heavy industries in the business-to-business context. This opportunity has the potential to transform the way that industries think about collaboration and asset ownership.

But what does it take to identify opportunities for sharing? Which industries will benefit the most? The following criteria can help answer these questions:

When these conditions are met, it is likely that there is a significant potential to jointly utilise or invest in infrastructure, facilities, machinery or even R&D, as well as people and teams. This is an opportunity for industries from manufacturing, food and agriculture to energy, mining, chemicals and others.

According to Accenture’s Collaborate to reinvent paper, there are five main value levers that the sharing economy can unlock for most B2B industries:

The actual benefits will depend on the particular industry, scope, categories etc. For example, in the unfolding collaboration across the oil and gas value chain, estimates suggest a reduction of greenhouse gas emissions and cost of 10% for shared categories with the potential to grow up to 25%, in addition to improved safety and higher quality of services. Even greater environmental benefits are expected to be achieved when sharing enables fuel switching; carbon capture, utilisation and storage (CCUS); and hydrogen – often possibly beyond the scope of individual players due to the sheer question of scale.

The sharing economy is a mature concept in the B2C segment, however it is in its early days to become business as usual in B2B. Hence, the success of such first sharing arrangements requires commitment and a mandate from top leadership, complemented by passionate delivery teams on the ground. There are three key further recommendations:

The sharing economy concept in an asset heavy sector has been recently proven and is currently scaling within the oil and gas industry. From 2014 through 2019, the CORAL 2.0 programme was executed in Malaysia and relied on collaboration across 25 industry players achieving $2.8 billion savings while significantly reducing emissions. This included $250 million saved over four years with corresponding emissions reduction and improved supply chain productivity by increasing utilisation of logistics vessels, such as workbarges and workboats, from 60-70% to 90%. The figure below demonstrates how savings and emissions reduction are being achieved.

Inspired by this example, a group of oil and gas CEOs that represent a quarter of global oil supply (including BP, Crescent Petroleum, ENI, Enquest, Equinor, Galp, Occidental Petroleum, Pan American Energy, Petrobras, Petronas, Repsol, Saudi Aramco, Shell and Total), the World Economic Forum and Accenture are collaborating to take the concept to new heights and create many resource and logistics sharing hubs.

According to Patrick Pouyanné, CEO of Total: “We have an opportunity to leverage the principles of the sharing economy in oil and gas logistics. It is a proven concept that greatly helps minimise emissions while improving cost and productivity of assets – three strategic imperatives for our future.”

Several oil and gas hubs are targeted to be activated in 2021 in locations from Angola, Brazil, the US Gulf of Mexico, the UK North Sea, and Southeast Asia to potentially the Middle East and Argentina. According to Amjad Bseisu, CEO of Enquest: “Sharing of non-competitive assets and resources needs to become a mainstream practice to minimise the carbon footprint and increase productivity of our industry.”

Principles of the sharing economy can be successfully leveraged by many asset-heavy industries. Sharing enables more efficient utilisation and elimination of duplicate, underutilised or redundant assets and resources. In effect, sharing reduces emissions, improves capital efficiency, decreases cost, uplifts talent and creates ecosystem improvements.

This opportunity has huge potential, though it requires a transformation of the way industries think about collaboration and asset ownership. The oil and gas industry experience offers a concrete example and a good starting point for sharing to become a mainstream business practice.

Resource and logistics sharing hubs is an initiative of the World Economic Forum’s Oil & Gas Industry community. Accenture is the initiative’s knowledge partner. Get in touch to learn more and engage at Maciej.Kolaczkowski@weforum.org.