The “Sharing Economy” Presents Challenges and Opportunities for the Profession
Over the past few years there’s been exponential growth in the sharing economy, characterized by collaborative consumption where we share space, cars, skills, whatever. Perhaps the most prominent example of this trend is the success of Airbnb and Uber, businesses that have leveraged technology to create virtual marketplaces matching supply and demand—for a room, a ride, a task, etc. These businesses have significantly disrupted the hotel and taxi industries and broken down traditional business models, and, in some cases, now accommodate and transport more people than their traditional equivalents.
This trend surfaces an important question: could the accountancy profession find itself similarly “disrupted,”—or Uberized, as Bill Sheridan, Chief Communications Officer for the Maryland Association of CPAs, puts it? Rachel Botsman, a global expert on the power of sharing and collaboration, in conversation with Bill Sheridan, says the accountancy industry is already being disrupted. To be sure, the sharing economy presents our profession with a unique set of challenges, but, by the same token, also corresponding opportunities.
On the challenge side of the ledger there is, for example, a risk that accounting firms could be substituted by individuals—including those that cannot legitimately call themselves a professional accountant—offering discrete tasks, like bookkeeping and tax returns, perhaps through an app.
On the opportunity side of the ledger there's the fact that the success of businesses like Uber is based on trust, influence, and "reputation capital," as Botsman explains in a TEDTalk. Trust and reputation are things the accountancy profession prides itself on. IFAC President Olivia Kirtley, speaking in Ghana recently, said that ethics, trust, and credibility were the three key pillars of the global accountancy profession and that a professional accountancy qualification was a visible reminder of integrity, expertise, and trust, and a mark of a trusted advisor. This reputation of trust gives our profession a crucial competitive advantage in the sharing economy. We just need to be smart at leveraging it.
So what might the sharing accountancy economy look like? Botsman looks at three apps that offer a glimpse, each of which is more disruptive of the existing accountancy business model. First, TaskRabbit is an online, mobile marketplace that allows users to outsource small jobs and tasks to others in their neighborhood. Users name the task they need done and the price they are willing to pay, and a network of pre-approved contractors bid to complete the job. Could simple accounting services like a tax return or bank reconciliation for a small business become a TaskRabbit task? Second, UpCounsel connects clients with vetted attorneys who best match their needs and budgets—without a law firm being involved. Again, it’s easy to see how this could be applied to accountancy. And third, VouchedFor is a UK-based service that matches clients with independent advisors, including accountants—completely cutting out accountancy firms.
How is IFAC helping the global accountancy profession prepare and adjust to trends such as the sharing economy? Our Strategic Plan for 2016-2018—which has been informed by a survey of our member organizations and key stakeholders on macro trends, their implications for the profession, and the possible IFAC responses—identifies rapid advances in Information and Communications Technology (ICT) as one of the trends that is having the most profound impact on the profession, and we aim to help the profession respond in a robust and timely manner to such trends.
One of the ways we do this is by leveraging our role as a credible knowledge convener and providing a global forum to share, synthesize, and create knowledge to support professional accountants in providing high-quality services. For example, the IFAC Global Knowledge Gateway, on which this article is posted, seeks to match demand and supply for news, resources, and debate for the profession. On the Gateway and through other channels, we hope to gather a variety of responses to emerging trends impacting the profession and share them for the benefit of all. Another way IFAC helps the profession prepare for trends with seismic implications for the profession is through speaking out to raise awareness and put the profession on alert. For example, in October, President Kirtley spoke at the 70th Congress of the CSOEC, The Digital Accountant, regarding technology and how it is impacting our profession.
In her conversation with Sheridan, Botsman concludes by saying, “We have three options, essentially a Hobson’s choice: bury our heads in the sand and wait to die; fight the disruption and lose; or become pioneers and embrace the disruption as an opportunity.” In the sharing economy, businesses will either disrupt or be disrupted. We need to find different ways to offer value to our clients. We need to find ways to leverage technology. But, above all, we need to realize the opportunity presented by our profession’s reputation, integrity, and trust.