We need the ‘sharing economy’

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We need the ‘sharing economy’

The government pledged to legitimize the “sharing economy,” a concept widely practiced in the United States and Europe in which people rent out their unused or under-used assets, from cars to household appliances, during a trade promotion meeting chaired by President Park Geun-hye.

The pledge was added to the government’s economic policy outline for this year in order to boost the services sector by drawing new investment of more than 6.2 trillion won ($5.1 billion). Other deregulation measures were also pledged.

The sharing economy has proven highly successful through U.S. enterprises like Airbnb, which lets people rent out their spare rooms and other spaces, and Uber, the taxi-hailing app.

Korea is late to join because the concept is illegal under current laws. Anyone wanting to rent out their car or room in their house cannot register as a legitimate business because the category simply does not exist in local laws, which are designed to serve or regulate traditional industries rather than nascent or potential business areas.

The same difficulties exist in burgeoning sectors like drones, wearables and automated vehicles. Anyone who wants to register technology as part of a new business is turned down because the administration office lacks regulations. Once legal or regulatory grounds are established, the markets will already be dominated by foreign players.

During the meeting, President Park ordered her administration to “dump all regulations that prohibit the growth of new industries and save only the ones really necessary.”

In other words, this was a command to reshape the regulatory framework to make untested and new businesses easier to start.

What matters is real action. Unless the multiple layers of regulations that have long been choking new businesses are axed, Korea Inc. won’t be able to boost either exports or domestic demand.

Meddling in the name of assistance also must not get in the way. The authorities must persuade brick-and-mortar industries like taxis and hotels to agree to share their market with newcomers from online and mobile platforms.

The law to advance the services industry needs to pass the legislature immediately. The government, legislature and local administrations all must examine their systems to encourage new industries. JoongAng Ilbo, Feb. 18, Page 34

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