The sharing economy dilemma: the response of incumbent firms to the rise of the sharing economy

Raz Godelnik


Objective of the Study: This paper explores whether and to what degree incumbent firms innovate in response to competition from the sharing economy.

Methodology/Approach: Data on incumbents’ actions related to the sharing economy between 2011 and 2015 was collected from multiple resources. Two conceptual frameworks, the OECD Oslo Manual and Pisano’s Innovation Landscape Map, were jointly used to determine whether incumbents’ actions could be considered as innovation and their level of innovativeness.

Originality/Relevance: As the sharing economy has grown rapidly in the last decade, offering new ways to create value, so has the discourse about its disruptive capacity. Yet, not enough is known about the sharing economy’s impact on incumbent firms beyond the disruptive capacity narrative.

Main Results: The study identified 187 actions related to the sharing economy that were taken by 134 incumbent firms between 2011 and 2015. Less than half of these actions are considered innovative, and the majority among them are at the lowest end of the innovation continuum.

Theoretical/Methodological Contribution: This study contributes to the literature on the sharing economy by developing a synthesized innovation-based framework to evaluate incumbent firms’ response to sharing economy entrants.

Social/management contributions: The results of this study and the methodology it uses provide benchmarking opportunities for incumbents in similar circumstances, and also puts into question the disruptive narrative around the sharing economy.


Sharing economy; Innovation; Incumbents; Disruptive innovation; Collaborative consumption.

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