The sharing economy in Korea is sadly mired in regulation and protocol

The boom from the sharing economy is spreading, and millions of travelers around the world are finding accommodations through lodging-sharing services. According to global consulting firm PricewaterhouseCoopers, the size of sharing economy is expected to grow from $15 billion in 2013 to $335 billion by 2025.

In response, countries and local governments worldwide are revising laws and regulations to accommodate new technologies, innovation and services. Last year, many cities, including London, Paris, Amsterdam and Milan revised laws to permit the use of lodging services like Airbnb.

Japan and Singapore are also reviewing new regulations to permit accommodation-sharing services. Investment from innovative companies also benefit local residents.

But while many cities implement new laws, related laws in Korea remain complicated and confusing. These laws were established for other industries in the past and are not relevant to this new trend that is the sharing economy.

Innovation often clashes with existing regulations. While Korea boasts world-class information and communications infrastructure and widely used online financial services, there is no online-only bank here because these financial services are perceived based only on the standards of financial industry regulations, neglecting innovation and convergence.

However, bucking the trend cannot reverse the flow. We are at a crossroads.

We need to choose whether to limit innovation and individual choices with existing regulations or establish new rules for the future.

When consumer choices are expanded, more people can benefit from new services and their use. Strong economies around the world have started revising their laws to support this new and rapidly growing economy to help local residents. They are building a fire for a future growth engine.

Korea should not commit to the folly of throwing a wet blanket on the fire.

*A professor in Yonsei University’s Graduate School of International Studies

by Lee Hee-jin