Social connectivity in platforms

Platforms are all about enabling connections to form between actors, typically producers and users of any given tangible or intangible commodity. But to what extent do these connections result in social value for individuals? There are of course social media platforms that by definition focus on maintaining or creating human relationships whether based on family ties, existing friendships, professional networking, dating or shared hobbies or interests. Interaction, communication and social ties nevertheless take place in other platforms too, and the positive and negative impacts of these may come as a rather unexpected side effect to the platform owner as well as users.

For example, ride-sourcing and hospitality platforms are virtual matchmakers, whose work comes to fruition when the virtual connection proceeds to a face-to-face meeting. A ride is then being shared with or a home is being rented to someone who only a little while back was a stranger. Many suchlike relationships remain one-time transactions, but they can also grow to regular exchanges over the platform or profound relationships outside the platform. Connectivity is as much a part of peer-to-peer platforms as professional and work-related platforms. You may form a personal connection with a specific IT specialist over the IT support system platform even if you never met them offline. Or supply chain business partnerships may evolve out of a one-time task brokerage platform transaction.

Why is this important?

The benefits of platform economy regarding social connectivity are the wide outreach and extremely fast and efficient matchmaking based on personal, professional of other mutual interests. In spite of complex technologies and big data flows, these social connections on platforms can be truly personalised, intimate and rewarding. The flipside of the coin is risks around privacy, safety and security. Reputation, review and rating systems are important ways to tackle these and could help to strengthen the sense of trust and community across user populations of platforms. In fact, one interesting finding of social connectivity in platforms is that relationships are maintained and formed bilaterally between the individual as well as among groups, communities and actor ecosystems. Short-term or long-lasting, these relationships often mix online and offline realities.

Additional concerns related to social connectivity in platforms is how much they eventually promote equality and fairness or if the social interaction is more of a burden than a benefit. Reputation and rating systems may result in unfair outcomes, and it may be difficult for entrants to join in a well-established platform community. Prejudices and discrimination exist in online platforms too, and a platform may be prone to conflict if it attracts a very mixed user population. In the ideal case, this works well, e.g. those affluent enough to attain property and purchase expensive vehicles are matched with those needing temporary housing or a ride. But in a more alarming case, a task-brokerage platform may become partial to assigning jobs based on criteria irrelevant to performance, e.g. based on socio-economic background. Platforms can additionally have a stressful impact on individuals if relationships formed are but an exhaustingly numberous short-term consumable.

Emerging technologies linked to platforms are expected to bring a new flavour to social aspects of the online world. The hype around blockchain, for example, holds potential to enhance and ease social connectivity when transactions become more traceable, fair and trustworthy. It has even been claimed that blockchain may be the game changer regarding a social trend to prioritise transparency over anonymity. Blockchain could contribute to individuals and organisations as users becoming increasingly accountable and responsible for any actions they take.

Things to keep an eye on

Besides technology developers and service designers’ efforts to create socially rewarding yet safe platforms, a lot also happens in the public sector. For example, European data protection regulation is being introduced, and the EU policy-making anticipates actions for governance institutions to mobilise in response to the emergence of blockchain technology.

An interesting initiative is also the Chinese authorities’ plan for a centralised, governmental social credit system that would gather data collected from individuals to calculate a credit score that could use in any context such as loans applications or school admissions. By contrast, the US has laws that are specifically aimed to prevent such a system, although similar small-scale endeavours by private companies do to some extent already exist.

Visual signal summary: social connectivity in platforms

Selected articles and websites

Investopedia: What Is a Social Credit Score and How Can it Be Used?
General Data Protection Regulation (EU) 2016/679 – EUR-Lex
European Parliament: What if blockchain changed social values?
European Parliament: How blockchain technology could change our lives
Rahaf Harfoush: Tribes, Flocks, and Single Servings — The Evolution of Digital Behavior
Koen Frenken, Juliet Schor (2017): Putting the sharing economy into perspective, Environmental Innovation and Societal Transitions
Paolo Parigi, Bogdan State (2014): Disenchanting the World: The Impact of Technology on Relationships

Heidi Auvinen

Research Scientist VTT Technical Research Center of Finland Ltd
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Social impacts of the platform economy

Platforms create value well beyond economic profits, and the topic of social and societal impacts resulting from the emerging platform economy has been getting more and more attention lately. Platform economy undoubtedly has both positive and negative impacts on individuals and families as well as wider communities and entire societies. However, the range and depth of these impacts can only be speculated, as only very early evidence and research on the topic has been produced. After all, the platform economy is only in its infancy.

Why is this important?

Platforms have potential to address major societal challenges such as those connected to health, transport, demographics, resource efficiency and security. They could massively improve our individual daily lives as well as contribute to equal opportunities and progress in developing economies. On the other hand, platform economy can result in negative impacts in the form of disruptions and new threats. Privacy and safety concerns have deservedly been acknowledged, and other possible risks include those related to social exclusion, discrimination and the ability of policies and regulations to manage with whatever platform economy may bring about.

Some examples of positive and negative social impact categories of the platform economy include the following, which may distribute equally, create further division or bridge the gap among various social segments:

  • employment and unemployment
  • livelihood and wealth
  • education and training
  • skills, knowledge and competences
  • health and physical wellbeing
  • mental health and wellbeing
  • privacy, safety and security
  • social inclusion or exclusion, access to services, etc.
  • new social ties and networks, social mixing
  • social interaction and communication: families, communities, etc.
  • behaviour and daily routines
  • living, accommodation and habitat
  • personal identity and empowerment
  • equality, equity and equal opportunities or discrimination
  • citizen participation, democracy
  • sufficiency or lack of political and regulatory frameworks.

Platforms may have very different impacts on different social groups, for example, based on age, gender, religion, ethnicity and nationality. Socioeconomic status, i.e. income, education and occupation, may also play an important role in determining what the impacts are, although it is also possible that platform economy balances out the significance of suchlike factors. One important aspect requiring special attention is how to make sure that vulnerable groups, such as the elderly or those with disabilities or suffering from poverty, can be included to benefit from the platform economy.

Things to keep an eye on

Value captured and created by platforms is at the core of our Platform Value Now (PVN) project, and there are several other on-going research strands addressing social and societal impacts of the platform economy. One key topic will be to analyse and assess impacts of the already established platform companies and initiatives, which necessitates opening the data for research purposes. To better understand the impacts and how they may develop as platform economy matures is of upmost importance to support positive progress and to enable steering, governance and regulatory measures to prevent and mitigate negative impacts.

Selected articles and websites

Koen Frenken, Juliet Schor, Putting the sharing economy into perspective, Environmental Innovation and Societal Transitions, (2017)
The Rise of the Platform Economy
Uber and the economic impact of sharing economy platforms
VTT Blog: Openness is the key to the platform economy
SUSY project: Solidarity economy

Heidi Auvinen

Research Scientist VTT Technical Research Center of Finland Ltd
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Technophobia – fear of technology

Although new technology intrigues us and makes us curious about what can be achieved with it, the flipside of the human reaction to anything new is suspicion and even fear. Technophobia means fear of technology, and it can stem, for example, from not fully understanding how something works, possibility of danger and negative impacts or risk of malicious misuse. Another flavour of technophobia is anxiety over our personal competences to deal with new technologies and the downright possibility of social exclusion if we lack the access or skills to adopt them.

Why is this important?

Some of the technology fears connected to the platform economy have been around for a long time, and they apply to pretty much any technologies linked to machines and computing. The archetype of suchlike concerns is the fear of losing our jobs because of automation, something that has been a worry for well over a century.

Another major concern in the context of platform economy is how the disruption to economy will impact us as individuals (for example moving from regulated labour market to the gig economy), as businesses (for example smaller companies being bulldozed by large platform corporations) or as society (for example governments trying to keep up with regulation, legislation and fiscal needs related to platforms).

Fears do not either escape the indirect risks and negative impacts that may arise with platformisation, such as loss of knowledge and survival mechanisms if digitalised assets are destroyed or if there’s a prolonged power cut. Intentional misuse and criminal activity is also a scare experienced by many, and evolving platform configurations may indeed be extremely vulnerable.

Examples of specific fears include:

  • Fear of technology eliminating jobs and the need for human workers.
  • Fear of technology taking over the human (individual or society).
  • Fears related to privacy and cyber security.
  • Fear of losing control and getting lost in the technology mesh.
  • Fear of not learning the skills or not having access to use a technology.
  • Fear of dependence and not surviving without the technology (for example in case of a power cut).
  • Fear of negative social and societal impacts (for example lack of face-to-face interaction).
  • Fears related to fast and vast information flows (for example validity of news).
  • Fear of governments not having the means to monitor and control malicious and criminal activity related to new technologies.

Things to keep an eye on

The important thing is to try understand the root causes of fear of technology in the context of platform economy, regardless of whether the threats are real or perceived. Also, it should we noted that technophobia may influence not only consumers but businesses and policy-makers alike. Through addressing technology-related concerns appropriately we can ensure that individuals as well as companies and other organisations have the courage to make the best of the platform economy opportunities. On the other hand, the assessment of fears helps us to pinpoint risks and vulnerabilities that need to be fixed in technological, regulatory or other terms. To dispel mistrust, impartial and validated information to support technology proficiency and awareness is needed. Similarly important are also investments in for example digital security and technology impact assessment.

Selected articles and websites

Robots have been about to take all the jobs for more than 200 years. Is it really different this time?
The Victorians had the same concerns about technology as we do
Fear of Technology
Hot Technology Pilots in 2016 – Fear & Chaos in Technology Adoption
Why do we both fear and love new technology?
Americans Are More Afraid of Robots Than Death. Technophobia, quantified
Ever-present threats from information technology: the Cyber-Paranoia and Fear Scale
The access – Platform economy: Creating a network of value
Choosing a Future in the Platform Economy: The Implications and Consequences of Digital Platforms

Heidi Auvinen

Research Scientist VTT Technical Research Center of Finland Ltd
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Reputation Economy

Why is this important?

Platform economy often requires trusting strangers. One mechanism for ensuring that everyone plays nicely is to have a reputation system in place. Customers rate the service provider (e.g. Uber driver or Airbnb apartment) and the service provider in turn rates the customer. The ratings or at least their averages are public, which influences who we trust and how we behave in the platform. Reputation is thus a valuable asset in the platform economy.

Things to keep an eye on

Because reputation is valuable, the mechanisms that affect how it is created, shared and used are important. Can the reputation scores be transferred to other services or used in a way not originally intended? Will reputation economy become a new surveillance and control system, as depicted in dystopian images of future, which do not seem so far off given the failed startup Peeple and the Sesame Credit system in place in China.

Selected articles and websites

The Reputation Economy: Are You Ready?
We’ve stopped trusting institutions and started trusting strangers
The reputation economy and its discontents
China has made obedience to the State a game
Black Mirror Is Inspired by a Real-Life Silicon Valley Disaster

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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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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