Across Europe, cities are increasingly investing in the sharing economy as a way to address key urban challenges. Swedish cities, especially those who were part of the previous programme Sharing Cities Sweden (2017-2021), are leading the way in this area.
Gothenburg, known for its forward-thinking approach, has launched an innovative new fund specifically dedicated to the circular and sharing economy—a rare and unique initiative in Europe. This fund allows organisations to apply for grants aimed at supporting their sharing economy projects.
We recently spoke with Ingela Andersson from the municipality of Gothenburg, who played a crucial role in the creation and management of this groundbreaking fund.
The creation of the fund
According to Andersson, the creation of the Circular and Sharing Economy Fund was a collaborative effort between the municipality and the civil society. While Gothenburg already had several other grant schemes to support social, cultural, and sports-related initiatives, it became clear that sharing economy projects often fell through the cracks. These projects didn’t fit neatly into the existing categories for funding, which typically focused on traditional sectors such as social services, culture, or sports.
As these projects struggled to meet the guidelines of the more general grant schemes, advocates from the projects themselves and the sharing economy sector raised the issue with local politicians, calling for a dedicated fund. This push highlighted the growing importance of initiatives such as bike-sharing, repair cafés, and collaborative mobility services, which align with key goals like sustainability, affordability, and healthier living. The outcome was the creation of a separate fund tailored specifically to support sharing economy and repair initiatives. This article will mainly highlight the sharing economy part of the fund.
The sharing economy grant
Following two years of collaboration between municipal departments and civil society, Gothenburg’s Circular and Sharing Economy Fund was launched. This is the first fund in Europe, dedicated to the sharing economy. The fund, a total of 2 million Swedish kronor (1 million from the Social Administration Department and 1 million from the Sports Department), provides financial support to a range of initiatives. This is between €172,000 – €176,000. In 2024, six organisations received grants, including the toy libraries ‘Högsbo’ and ‘Majorna’, the collaborative economy NGO ‘Kollaborativ Ekonomi Sverige (Sweden)’, and ‘Returkultur’, which manages shared resource pools among members. Funding also supported ‘Omställningsnätverket’ (Transition Network), a nonprofit that advances local transition initiatives, and ‘Skjutsgruppen’, a nonprofit facilitating ridesharing.
The fund sets no maximum limit for applications, allowing organisations to request support based on their specific needs. It is designed to strengthen and consolidate existing initiatives rather than launch new projects, emphasising stability and long-term impact over short-term activities.
This fund is an excellent example of how a municipality can actively contribute to the development of the sharing economy by supporting its local players.
Credit: IIIEE, Lund University
Fund structure and criteria
The fund is structured to support two types of projects:
- Service-oriented projects: These initiatives directly facilitate the sharing of goods and services, such as bike-sharing programs.
- Awareness-raising initiatives: This includes projects focused on educating the public and shifting behaviours towards more sustainable, shared consumption.
To apply, organisations must meet certain criteria, including demonstrating that they are not-for-profit, have a democratic organisational structure and adherence to association rules.
One of the key challenges in managing the fund has been navigating the different guidelines set by the two departments involved, Social Administration, and Sports and Associations Administration. Andersson points out that each department has its own set of requirements, making the process more complicated for applicants.
For example, when evaluating projects, the criteria can vary widely depending on the field. A sports initiative might be assessed based on clear, tangible KPIs—like the number of participants, frequency of activities, or improvements in physical health. In contrast, social projects often aim for more qualitative outcomes, such as increased community cohesion or improved well-being, which are harder to quantify.
For future iterations it would be recommended to consolidate the fund under one department that would most likely make internal work smoother.
Key challenges and lessons learned
While Gothenburg’s Circular and Sharing Economy Fund is a step forward, there have been some lessons learned that could inform other cities considering similar initiatives.
- Funding allocation: The current structure, which divides the fund between the Social Administration, and Sports and Associations Administration Departments, is difficult to manage due to the differences between the two departments. It would be better if such a fund would be managed by a single department. In this way, the fund could be paid through this specific department, avoiding the use of resources from the existing budgets allocated to both social or sports initiatives.
- Defining the sharing economy: One of the ongoing challenges is defining what constitutes a “sharing economy” initiative. For example, second-hand shops applied for funding but were not eligible under the fund’s guidelines. This highlights the difficulty of drawing clear boundaries for what fits within this new and evolving sector.
- Subsidising staff: In Sweden, where volunteering is deeply ingrained in the culture, there has been considerable debate about whether to subsidise staff salaries for sharing economy initiatives, and if yes, what would be the maximum shared of staff to be funded. The new generation of entrepreneurs in this space want to make a living from their work, whilst there is still a reluctance to pay for roles that have traditionally been voluntary. This raises a crucial question for the sharing economy: What tasks can be left to volunteers, and which roles should be compensated?
Credit: Klara Silvemark
Looking ahead: a model for other cities
Gothenburg’s Circular and Sharing Economy Fund is a promising model for other cities looking to support the circular and sharing economy. In a time when many cities are grappling with how to fund innovative, sustainable projects, Gothenburg’s experience offers valuable lessons. By creating a dedicated fund, the municipality has shown its commitment to fostering a local sharing economy ecosystem, one that is aligned with broader sustainability and social goals. More cities across Europe should consider implementing similar schemes to support their own growing sharing economy sectors, thereby creating a more liveable city for their residents.
As these projects struggled to meet the guidelines of the more general grant schemes, advocates from the projects themselves and the sharing economy sector raised the issue with local politicians, calling for a dedicated fund. This push highlighted the growing importance of initiatives such as bike-sharing, repair cafés, and collaborative mobility services, which align with key goals like sustainability, affordability, and healthier living. The outcome was the creation of a separate fund tailored specifically to support sharing economy initiatives.
Writer: Nienke De Jong, Bax Innovation.