Airbnb’s homesharing clubs

Airbnb has been encouraging people who let their apartment through Airbnb to organise themselves into local ”homesharing clubs”. One main motivation behind this is to fight the increasingly strict regulations set by cities on renting apartments through Airbnb and similar services.

Why is this important?

While Airbnb is especially challenging the hotel industry, perhaps the main motivation for cities to restrict the service is the consequent rise in rental prices in downtown areas as well as losing control on the inflow of tourism. Airbnb has fought against regulations before, but the homesharing clubs are a different strategy, as they engage the local hosts to lobby for more favourable regulation. This is different from the attempts by some Uber drivers to unionize themselves, as this is driven by the platform owner, Airbnb, itself.

Things to keep an eye on

The problems with homesharing are systemic in nature and thus difficult to solve. Letting one’s apartment can provide additional income, but it can also lead to rising rental prices overall. Homesharing clubs and local organisation in general is a good idea, but the key question is whose interests the clubs represent: the platform owner’s, the hosts’ or the community in general? How this tension plays out indicates where the platform economy is heading in different regions: to delaying the inevitable, towards winner-takes-all markets, to locally and communally owned platforms, towards platforms as commons or to some other direction.

Selected articles and websites

Airbnb faces worldwide opposition. It plans a movement to rise up in its defence
Bringing People and Places to the Table
Airbnb hosts protest new rental law outside New York governor’s office

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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IBM Watson

Why is this important?

The IBM Watson ecosystem enables developers to include artificial intelligence to their services. Examples range from personalised health care advice to accelerated R&D to automated customer support. A key point to keep in mind is that the whole ecosystem is learning. As the ecosystem grows and more use cases are added, the quality and the range of things IBM Watson can do increases.

Things to keep an eye on

As the number of sensors and connected devices grows, the amount and ubiquity of data increases and this benefits machine learning services such as IBM Watson. Therefore it is useful to think how much data is gathered and where it is gathered. Another thing to consider is the potential public backlash from seeing artificial intelligence as a creepy ”big brother”. In addition, the question of who owns the data is crucial.

Selected articles and websites

IBM Watson ecosystem
R&D support: Inno360
Condé Nast Has Started Using IBM’s Watson to Find Influencers for Brands
Next Target for IBM’s Watson? Third-Grade Math

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Platform cooperatives

Why is this important?

The current big players in the platform economy operate with the aim to increase shareholder value. Although the business model is different than with most incumbents, the business logic is rather similar. However, platforms support also other forms of organisation and value distribution, for example the cooperative. What if the drivers would own the platform they use for connecting with customers? Herein lies potential impact to the way economic value is distributed.

Things to keep an eye on

Technology is not an obstacle for platform coops to scale, the hurdles lie in social organisation and practices. Trust, fair rules and efficient decision making are key things to solve. Technologies such as blockchain can help here, but it is useful to keep in mind that they are only as good as they are coded to be.

Selected articles and websites

Why Platform Cooperatives Can Be The Answer To A Fairer Sharing Economy
Platform Cooperativism Consortium
Bringing the Platform Co-op “Rebel Cities” Together: An Interview with Trebor Scholz:
Proposal: turn Twitter into a user-owned co-op

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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e-Government

New technologies such as cloud computing, virtual collaboration tools, and ubiquotous smart mobile devices are enabling new forms of public debate and policy making. At the same time, more data is collected, and it is becoming more open and accessible. Active citizens, NGOs and grassroot movements catalysed by social media are challenging the existing societal structures. These developments create both opportunities and challenges for government.

Why is this important?

Governments can use platforms to foster the growth of specific industries by e.g. ensuring open access to all publicly funded data and providing crowdfunding and other platforms for companies. At the same time, platforms challenge the way governments to work by enabling new types of decision making, suited for a truly distributed and self-organising communities. Also, governments have to cope with the impacts of current big platform players, who disrupt existing industries and challenge existing regulation.

Things to keep an eye on

Estonia is the example to keep an eye on when it comes to the digitalization of different government activities; it provides e-residency and has solved the problem of Uber and taxation. Blockchain could offer interesting solutions for “hacking the society”, starting from secure healthcare records and going on to making basic income a platform. Data privacy, access and ownership are key issues to keep in mind.

Selected articles and websites

Government as Platform
These Online Platforms Make Direct Democracy Possible
Open Government Platform – OGPL To Promote Transparency And Citizen Engagement
A federated architecture – choose and combine the tools you need for your democratic process

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Skills for platform economy

Why is this important?

Platform economy requires a new set of skills. Understanding the big picture, interpreting information in the right context, networking and collaborating with people with diverse backgrounds in growing in importance. In addition, while being able to code and understand code is needed, it is more important to understand the consequences of digitalization and have the competence to design platforms that benefit the society.

Things to keep an eye on

The shift in skills needed may easily lead to growing inequalities between different regions but also between the old and young. Learning new skills related to platforms is not just for young students, but also for those in work life. In addition, platform thinking is not disrupting all industries at once, so there are differences between different fields. Educational platforms also challenge existing educational institutions.

Selected articles and websites

Design It Like Our Livelihoods Depend on It: 8 Principles for creating on-demand platforms for better work futures
Learning is earning in the national learning economy
The 10 skills you need to thrive in the Fourth Industrial Revolution

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Workers in platforms

Why is this important?

Moving towards platform economy is changing the way people work. Platforms enable more flexible and efficient matching of labour and tasks, provide new ways of working (e.g. Uber) and offer ways to monetize existing assets (e.g. Airbnb). Simply talking about platform entrepreneurs or gig workers leads to a narrow view of the diversity of the workers in the platforms of tomorrow.

Things to keep an eye on

Working through global platforms is a problem especially for governments: how to make sure taxation and welfare works? From the worker’s point of view the interesting question is whether it is possible to earn a decent living from a platform, or will platform economy lead to a polarization of wages: some top experts can earn huge amounts, while a majority is competing at very low salaries.

Selected articles and websites

Voices of workable futures
Independent work: Choice, necessity, and the gig economy
The situation of workers in the collaborative economy
Here’s Why The Freelancer Economy Is On The Rise

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Biases in artificial intelligence

Why is this important?

The second wave of machine learning, powered by neural networks and deep learning, is accelerating the development of what artificial intelligence can do. However, it is useful to keep in mind that what the artificial intelligence is learning reflects the biases of our past and present. Because the learning is based on existing datasets, artificial intelligence repeats the behaviour that is inherent in that data.

Things to keep an eye on

When using machine learning it is crucial to understand what data is being fed into the algorithm and what kind of biases it could have. Also the power of people just messing around should not be underestimated, when it comes to releasing an artificial intelligence “into the wild” to learn, as Microsoft’s Tay demonstrated. However, we are not doomed to repeat our mistakes: the racist, misogynous biases can be detected and corrected.

Selected articles and websites

Can computers be racist? Big data, inequality, and discrimination
Artificial Intelligence’s White Guy Problem
Biased bots: How do we teach them ‘good values’, and is that even possible?

 

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Artificial Intelligence

Artificial intelligence has made tremendous progress over the last decades, moving from beating humans at games towards a wide range of fields. In 1999, IBM’s big blue defeated the world best Jeopardy champions, and 17 years later Google bested the world’s champion “go” player. Recently, Big Blue was employed to develop an antiviral to attack the Zika virus with great success. The new “macromolecule” was effective against not only Zika but multiple other viruses as well. LTP news estimates that “AI is going to change every endeavor of human activity from Medicine to Government to Manufacturing, Law, Finance and beyond.  By 2025, AI Will Have a 5-Trillion-Dollar Direct Impact on the Workforce“.

Why is this important?

  •  AI replaces jobs, and platforms enable this: platforms act as the mediator between the AI and the user, and offer the interface and central place to ask for e.g. law advice.
  •  AI provides new services. This is especially the case for healthcare, where improved pattern recognition can detect tumors, or evolutionary algorithms can design new medicine. Add to this the possibility to turn code into biological products via synthetic biology, and the range of services expands.
  •  AI provides the boost that data analytics needed to make sense of the data collected and created via platforms. Platforms enable the recording of every transaction, which results in vast amounts of data, which can be useful also outside the interests of marketing.

Things to keep an eye on

The range of application areas of AI will expand, covering new industries, such as financial analytics, advising, insurance and law. Bank of America estimates the market for AI-based analytics to grow to 70 billion dollars by 2020. At the same time, artificial intelligence is becoming more and more ubiquitous; people use AI-based services everyday without realizing it. As a counter trend to the hype and excitement over the potential of AI, concern about its malevolent potential has also been raised, ranging from AI causing mass unemployment (most probable) to unleashing “a global propaganda war that sets governments and populations in opposition”.

The Finnish government recently released its action plan for enhancing the innovation ecosystem around intelligent robotics and automation in Finland, with a focus on security, privacy, user centricity and service design. Currently, the main innovation hub around AI and robotics in Finland is Airo island. A good example of a Finnish company applying AI is Zenrobotics, which makes recycling robots based on machine vision. The Finnish “Curious AI Company” is focusing on the development of advanced artificial intelligence and is now trying to apply its unsupervised machine learning to various pilot areas. Finns also take part in the discussion around AI, see for example the predictions on AI by Jarno M Koponen.

Selected articles and websites

A Government resolution to promote the development of intelligent robotics and automation
The next AI is no AI
AI and Communication: Machines That Can ‘Hear’ and ‘Understand’ Voices
Siri creators unveiled a new AI platform that seems to blow Siri out of the water
New Infosys AI tool could transform the way companies maintain complex systems
The AI Revolution: The Road to Superintelligence
New AI security system cleverly combines machine learning and human intuition
DimensionalMechanics raises $4.7M for enterprise artificial intelligence platform

 

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Crowdfunding

Why is this important?

Crowdfunding projects have in the past has been mostly associated with consumer products and not an equity investment. According to Catherine Clifford, of Entrepreneur Magazine, “Crowdfunding is, at its heart, driven by a grandiose, ideological utopian vision of a democratization of finance in which the power of the purse strings is pulled down from the elite circles of legacy hierarchy and put in the hands of the people. It’s born of a rather anti-venture capital ethos”.  But a major change in US  Security Exchange Commision rules has opened the door to equity crowd funding via Reg A+ rules (Read Ruling). Chance Barnett of Forbes estimates that crowdfunding will surpass venture capital: “Just five years ago there was a relatively small market of early adopters crowdfunding online to the tune of a reported $880 million in 2010. Fast forward to today and we saw $16 billion crowd funded in 2014, with 2015 estimated to grow to over $34 billion. In comparison, the Venture Capital  industry invests an average of $30 billion each year”. Crowdfund insider predicts that more and more companies will pursue equity crowdfunding, including new industries such as Agriculture, Sports, Energy, Transportation, and Biotech. Part of this growth is driven by cheap digital tools.

Things to keep an eye on

In Finland, the status of crowdfunding has been problematic, but now the situation is improving, as the government is proposing a new law on crowd funding, which should come into action in July (VNK). The new law clarifies the guidelines and makes it easier for companies to use crowd funding. Nordea has already started a crowdfunding platform for growth companies (Nordea). In addition, a crowdfunding platform for piloting and experiments was proposed in a report to the Prime Minister’s Office (VNK). In the energy sector, there are interesting examples of using crowdfunding for financing new solar power plants, such as the Finnoonportti project by Joukon Voima. Crowdfunding thus is seen to be a tool to fund startup companies aiming for growth as well as enable societal experiments or achieve a shift in the existing system.

Selected articles and websites

Crowdfunding in 2016: Five Predictions
10 Secrets of Highly Successful Crowdfunding Campaigns
An Unlikely Romance Between a Venture Capital Fund and a Crowdfunding Platform Promises to Shake Up Startup Financing
Spurring on the startup industry
Next Generation Crowdfunding Starts May 16. Expect Opportunity and Growing Pains.
How crowdfunding can help save Silicon Valley from its harebrained investors
Proposal: Funding platform for piloting and experiments
Nordea to introduce crowdfunding service to the market

Victor Vurpillat

Global X-Network

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Blockchain

Blockchain is a technology that enables distributed permission-less database of transactions, verified by the network. It is mostly known for powering the Bitcoin, but it will have an impact far broader than enabling digital currency.

Why is this important?

The blockchain is said to be a disruption on the scale of the internet itself. The most prominent impact is on the financial sector – blockchain has been claimed to replace 80-90% of the cost of Wall street (Coinfox) and there are several blockchain powered trading and investment platforms available (LTP). However, in addition to banking and financial markets, blockchain is said to disrupt any sector with legacy databases, including healthcare, insurance, real estate, government and voting (VLAB, ShapingTomorrow). Estonia is already looking into using blockchain for health care records (Quartz), and Sony is developing an education platform powered by blockchain (TechCrunch).

One of the key impacts of blockchain is that it provides a technology of trust and eliminates the need for a middleman. This will allow truly distributed systems as well as new functionality such as smart contracts (LTP). Ethereum is one blockchain app platform, which aims to make blockchain based smart contracts easy to make (Medium). MIT has developed a platform called Enigma for secure data sharing, which enables analyzing the data by external applications while keeping the data itself private (BitcoinMagazine).

Things to keep an eye on

Blockchain potential has been noted by the business community, and 55% of firms in the global securities industry are engaged in R&D around it (ChainFinance). However, it is also useful to be aware of the challenges facing blockchain, which have less to do with the technology itself, but more on how it is applied. For example Bitcoin is suffering from problems in scaling and the power in the network falling to just a handful of people (Medium).

In Finland there is growing interest in blockchain, but it is not yet in the everyday vocabulary (Digitalist). It is included in one of the recent TEKES calls and there is a new Facebook group on the subject. ETLA has made a report on the subject last Autumn (ETLA). There are some startups focusing exclusively on blockchain, such as Nordledger, ”a blockchain venture production studio”. The potential of blockchain beyond the financial sector has been recognised also in Finland. One recent interesting initiative is the Thing2Data project, which aims to provide a platform for making everyday object ”smart” by adding unique identifiers to them and utilising blockchain to store and verify the data (TiVi).

Selected articles and websites

Know more about blockchain: overview, technology, application areas and use cases
Satoshi Roundtable: Blockchain is bigger than the Internet
Blockchain-Powered Trading and Investment Platforms
More than Money: Get the gist on bitcoins, blockchains, & smart contracts
Blockchain-Enabled Smart Contracts: Applications and Challenges
Programmable blockchains in context: Ethereum’s future
Global Securities Industry Group Survey Finds 55% of Firms Engaging in Blockchain Tech R&D
The resolution of the Bitcoin experiment

 

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd

Victor Vurpillat

Global X-Network
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