Profiling of users in online platforms

This signal post drills into the topic of profiling of platform users. We will have a look at how information on users’ background together with data on their offline and online behaviour is used by platforms and allied businesses. On the one hand, profiling allows service providers to answer user needs and to tailor personalised content. On the other hand, being constantly surveyed and analysed can become too much, especially when exhaustive profiling efforts across platforms begin to limit or even control individuals based on evaluations, groupings and ratings. The ever increasing use of smart phones and apps, as well as use of artificial intelligence and other enabling technologies, are in particular accelerating the business around profiling, and individuals as well as regulators may find themselves somewhat puzzled in this game.

What is profiling all about?

In the context of the platform economy, we understand profiling as collecting, analysis and application of user data as a part of the functioning of a platform. This means that e.g. algorithms are used to access and process vast amounts of data, such as personal background information and records of online behaviour. The level of digital profiling can vary greatly, and a simple example would contain a user profile created by an individual and their record of activities within one platform. A more complex case could be a multi-platform user ID that not only records all of the user’s actions on several platforms but also makes use of externally acquired data, such as data on credit card usage.

The core purpose of profiling is for the platforms to simply better understand their customers and develop their services. User profiles for individuals or groups allow targeting and personalisation of the offering based on user needs and preferences, and practical examples of making use of this knowledge include tailoring of services, price-discrimination, fraud detection and filtering of either services or users.

Pros and cons of profiling

From the user perspective, profiling is often discussed regarding problems that arise. Firstly, the data collected is largely from sources other than the individuals themselves, and the whole process of information gathering and processing is often a non-transparent activity. The user may thus have little or no knowledge of what is being known and recorded of them or how their user profile data is analysed. Secondly, how profiles are made use of in platforms, as well as how this data may be redistributed and sold onwards, is a concern. Discrimination may apply not only to needs-based tailoring of service offering and pricing but extend into ethically questionable decisions based on income, ethnicity, religion, age, location, the circle of friends, gender, etc. It should also be acknowledged that profiling may lead to misjudgement and faulty conclusions, and it may be impossible for the user to correct and escape such situations. The third and most serious problem area with profiling is when data and information on users is applied in harmful and malicious ways. This involves, for example, intentionally narrowing down options and exposure of the user to information or services or aggressively manipulating, shaping and influencing user behaviour. In practice this can mean filter bubbles, fake news, exclusion, political propaganda, etc. And in fact, the very idea of everything we do online or offline being recorded and corporations and governments being able to access this information can be pretty intimidating. Let alone the risk of this information being hacked and used for criminal purposes. Add advanced data analytics and artificial intelligence to the equation and the threats seem even less manageable.

However, profiling can and should rather be a virtuous cycle that allows platforms to create more relevant services and tailor personalised, or even hyper-personalised, content. This means a smooth “customer journey” with easy and timely access to whatever it is that an individual finds interesting or is in need of. Profiling may help you find compatible or interlinked products, reward you with personally tailored offers and for example allow services and pricing to be adjusted fairly to your lifestyle. In the future we’re also expecting behavioural analytics and psychological profiling to be used increasingly in anticipatory functions, for example to detect security, health or wellbeing deviations. These new application areas can be important not only for the individual but the society as a whole. Imagine fraud, terrorism or suicidal behaviours being tactfully addressed at early stages of emergence.

Where do we go from here?

Concerns raised over profiling are inducing actions in the public and private sectors respectively and in collaboration. A focal example in the topic of data management in Europe is the General Data Protection Regulation (GDPR) (EU) 2016/679 that will be applied in all European Union Member States from 25 May 2018 onwards. This regulation addresses the protection of natural persons with regard to the processing of personal data and on the free movement of such data. And even if launched as a European rather than a global initiative, the GDPR applies to all entities processing personal data of EU citizens, and many global players have in fact already claimed compliance in all their practices. Issues covered by the regulation include limiting the scope of personal data to be collected, the individual’s right to access data on them and detailed responsibilities for those processing personal data.

While the EU tries to manage the protection of personal data and thus bring transparency and fairness to profiling, the Chinese government is exploring a very different direction by being taking the lead in gradually introducing a Social Credit System. This model is at the moment being piloted, with the aim to establish the ultimate profiling effort of citizens regarding their economic and social status. Examples of the functioning of the credit system include using the data sourced from a multitude of surveillance sources to control citizens’ access to transport, schools, jobs or even dating websites based on their score.

Another type of initiative is the Finnish undertaking to build an alternative system empowering individuals to have an active role in defining the services and conditions under which their personal information is used. The IHAN (International Human Account Network) account system for data exchange, as promoted by the Finnish Innovation Fund Sitra, is designed analogously to the IBAN (International Bank Account Number) system used in banking. The aim with IHAN is to establish an ecosystem for fair human-driven data economy, at first starting in Finland and then extending to Europe and onwards. The plan entails creating common rules and concept for information exchange, and testing of the technical platform will be done together with pilots from areas of health, transport, agriculture, etc.

Selected articles and websites

Business Insider Nordic: China has started ranking citizens with a creepy ‘social credit’ system — here’s what you can do wrong, and the embarrassing, demeaning ways they can punish you
François Chollet: What worries me about AI
General Data Protection Regulation (EU) 2016/679 – EUR-Lex
Kirk Borne: Top Data Trends for 2018 – Part 1
Platform Value Now: Tackling fake news and misinformation in platforms
Sitra: Human-driven data economy
Wikipedia: Profiling (information science)
Wikipedia: Social Credit System
Wolfie Christl, Cracked Labs:‏ Corporate Surveillance in Everyday Life

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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Tackling fake news and misinformation in platforms

The online world is increasingly struggling with misinformation, such as fake news, that is spreading in digital platforms. Intentionally as well as unintentionally created and spread false content travels fast in platforms and may reach global audiences instantaneously. To pre-screen, monitor, correct or control the spreading is extremely difficult, and often the remedial response comes only in time to deal with the consequences.

In this signal post we study the problem of misinformation in the platform economy but also list potential solutions to it, with forerunner examples. Defining and establishing clear responsibilities through agreements and regulation is one part of the cure, and technological means such as blockchain, reputation systems, algorithms and AI will also be important. Another essential is to support and empower the users to be aware of the issue and practice source criticism, and this can be done for example by embedding critical thinking skills into educational curricula.

Misinformation − the size of the problem

Fake news or misinformation, in general, is not a new phenomenon, but the online world has provided the means to spread it faster and wider with ease. Individuals, organisations and governments alike can be the source or target audience of misinformation, and fake contents can be created and spread with malicious intentions, by accident or even with the objective of entertaining (for example the news satire organization The Onion).

Digital online platforms are often the place where misinformation is being released and then spread by liking, sharing, information searching, bots, etc. The online environment has not yet been able to adopt means to efficiently battle misinformation, and risks and concerns involved vary from reputation damage to global political crises. The most pessimistic views even warn us of an “infocalypse”, a reality-distorting information apocalypse. Others talk about the erosion of civility as a “negative externality”. This view points out that misinformation could, in fact, be tackled by companies in the platform economy analogously to how negative environmental externalities are tackled by manufacturing companies. It has also been suggested that misinformation is a symptom of deep-rooted systemic problems in our information ecosystem and that such an endemic condition in this complex context cannot be very easily fixed.

Solutions − truth, trust and transparency

Remedies to fake news and misinformation are being developed and implemented, even if designing control and repair measures may seem like a mission impossible. Fake accounts and materials are being removed by social media platforms, and efforts to update traditional journalism values and practices in the platform economy are being initiated. Identification and verification processes are a promising opportunity to improve trust, and blockchain among other technologies may prove pivotal in their implementation.

Example: The Council for Mass Media in Finland has recently launched a label for responsible journalism, which is intended to help the user to distinguish fake content and commercials from responsible and trustworthy journalism. The label is meant for both online and traditional media that comply with the guidelines for journalists as provided by the council.

Algorithms and technical design in general will also have an important part to play in ensuring that platforms provide the foundation and structure that repels misinformation. Taking on these responsibilities also calls for rethinking business models and strategies, as demand for transparency grows. One specific issue is the “filter bubble”, a situation where algorithms selectively isolate users to information that revolves around their viewpoint and block off differing information. Platforms such as Facebook are already adjusting and improving their algorithms and practices regarding, for example, their models for advertising.

Example: Digital media company BuzzFeed has launched an “outside your bubble” feature, which specifically gives the reader suggestions of articles providing differing perspectives compared to the piece of news they just read.

Example: YouTube is planning to address misinformation, specifically by adding “information cues” with links to third party sources when it comes to videos covering hoaxes and conspiracy theories. This way the user will automatically have suggestions to access further and possibly differing information on the topic.

Selected articles and websites

BuzzFeed: He Predicted The 2016 Fake News Crisis. Now He’s Worried About An Information Apocalypse.
BuzzFeed: Helping You See Outside Your Bubble
Engadget: Wikipedia had no idea it would become a YouTube fact checker
Financial Times:  The tech effect, Every reason to think that social media users will become less engaged with the largest platforms
Julkisen sanan neuvosto: Mistä tiedät, että uutinen on totta?
London School of Economics and Political Science: Dealing with the disinformation dilemma: a new agenda for news media
Science: The science of fake news
The Conversation: Social media companies should ditch clickbait, and compete over trustworthiness
The Onion: About The Onion
Wikipedia: Fake news
Wikipedia: Filter bubble

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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Interpreting the platform economy against landscape-level change factors

The Prime Minister’s Office in Finland published in late 2017 a list of change factors of the global landscape, with the aim to familiarise decision-makers as well as citizens with the changes and uncertainties we will face in the future. The result of fifteen key factors of change was produced in collaboration with experts across ministries and their strategy work. They also provide the basis for dedicated futures outlooks by various ministries to be published later in 2018.

The fifteen change factors each introduce the identified change and describe the situation until 2030. Additionally, alternative paths and development directions are offered. Rather than predictions, the change factors help prepare for various alternatives around the identified change topics, all the while acknowledging uncertainties.

In this signal post, the fifteen change factors are briefly analysed in the context of the platform economy. The idea was to formulate statements as questions and portray the alternative ways the change factor may be expressed in the platform economy. Some of the change factors can act as high level trends that steer platform development from afar, whereas others have very straightforward impact mechanisms. On the other hand, platforms themselves can influence the change factors and contribute to how the changes take place. The objective of this analysis is to help to map the potential with the platform economy regarding both opportunities and threats in the changing societal landscape. In fact, as the platform economy evolves, any of the issues identified may take a positive or negative turn or a combination of the two.

Political

  1. International order in transition
    • Will the USA host as the basis for leading platform companies?
    • Can China and the rest of Asia challenge the US leadership?
    • Will platforms act as enabling tools in international policy-making?
    • Will platforms be used as enabling tools for conflicts and corruption?
  2. Development of the EU and national states
    • Will the EU develop into a competitive and uniformly close-knit platform economy?
    • Could we face a failure of joint EU activities in the platform economy?
    • Are there going to be nationally or regionally confined platform economies?
  3. Changes in democracy and multiform participation
    • Will platforms act as enablers of accessible knowledge and the information society?
    • Will platforms be used to spread polarisation and misinformation?
    • Will platforms be employed as tools to societal participation in democracy?

Economic

  1. Global economy in transition
    • Are we going to see globally reigning platform monopolies or local platform economies?
    • Is the economic growth from platforms around the world going to be even or uneven?
    • Will platforms support quick profits or sustainable growth?
  2. Economic development in Finland
    • Will Finland succeed as a balanced platform economy on its own?
    • Is Finland going to excel in its niche areas in the global platform economy?
    • Will Finland remain a minor actor in the platform business?
  3. Transition of work
    • Is all work going to be gig work on platforms?
    • Could education, training and skills be provided on platforms on an on-demand basis?

Social

  1. Demography and urbanisation
    • Can platforms bring along a counter-trend to urbanisation and migration?
    • Could platforms help to solve challenges related to ageing?
    • Will platforms be used as connectors between culturally or demographically differing groups?
  2. Changing values and attitudes
    • How will ethics and values be incorporated into platforms?
    • Could different platforms support variability in choices on lifestyles and values?
    • Will platforms be used as a destructive force?
  3. Inequality and disparity
    • Will platforms be employed to empower women and build equal opportunities globally?
    • Will platforms be used to aggravate polarisation of individuals and nations?
    • Can platforms contribute to accessible human health and wellbeing?

Technological

  1. Technological transition
    • Will blockchain, AI, robots, etc. be employed successfully in platforms?
    • Is the role of platforms and advanced technologies to be in control or as a subordinate?
    • Could we face technological underachievement and failure of the platform economy?
    • Will data be the currency of the future technological platforms?
  2. Digital competences in public administration
    • Will the public sector be active in platform management and participation?
    • Is public administration going to be incapable of deploying digital platforms in their own processes?
    • Can the public sector keep up with platform markets?
  3. Resilience of critical infrastructure
    • Will platforms bring intelligence into infrastructure management?
    • Will we be able to ensure resilience regarding digital infrastructures and cyber security?

Ecological

  1. Climate change
    • Could platforms and advanced technologies contribute to effective agreements in climate policy?
    • Will digital platforms increase or decrease the overall environmental burden?
    • Could the platform economy provide the means to survive with climate change impacts?
  2. State of environment and nature
    • Could platforms facilitate monitoring of natural and built environments?
  3. Sustainable use of natural resources
    • Could platforms be used as enabling tools for material and resource management, e.g. recycling?
    • Will sharing platforms promote effectively sustainable, resource-efficient lifestyles and economies?
    • Will unsustainable consumption patterns spread uncontrollably because of platforms?
    • Are platforms, data and related technologies going to increase energy consumption exceedingly?

Selected articles and websites

Prime Minister’s Office: Globaalin toimintaympäristön muutostekijät [Change factors of the global landscape]

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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Ethics in the platform economy

Technology development has reached the phase where technology provides direct actions and services without the need of a human being involvement. In platforms, data is the asset and multiple technologies are used to collect, store, analyse, share and present the data. AI makes analyses, diagnoses and decisions, robots perform human like actions and mobile phones offer everybody an access to the integrated systems (platforms) formed by the new and emerging technologies. The novel systems are not only showcases any longer but they are an essential part of our everyday life. Therefore, ethics plays an important role in these complex systems and needs to be studied carefully.

In this signal post we discuss the ethical challenges of platforms and the applied technologies and explore the possibilities to take ethics into account when designing and developing new systems.

Ethics and emerging technologies

Ethics refers to “moral principles that govern a person’s behaviour or the conducting of an activity”, “the moral correctness of specified conduct” or “the branch of knowledge that deals with moral principles”. The minimum set of ethical and moral principles are implemented in laws and regulations, which often are trailing behind the technology development. One example of such a situation is the collection and use of data: the big platform players have collected personal data for years and used it in building their systems and services. Now the EU is launching the General Data Protection Regulation (Directive 95/46/EC) which will be in force on 25 May 2018. Another area of current ethical concerns is the autonomous vehicles, both for civil and military purposes. In case of autonomous cars, how should the optimization be made, whom or what (human welfare, safety of the passenger or those on the road, environment, etc.) to prioritize and on what grounds?

On the other hand, ethical challenges in the medical and pharmaceutical R&D have been identified in time and the regulations and codes of conducts were first developed there and are in place in developed countries. However, the emerging technologies constantly trigger new ethical issues. Current ones include the genome editing and the use of robots in taking care of patients or elderly people. The modern health care platforms tend to imply all possible ethical issues from personal data protection to the use of AI and robots in any imaginable combinations.

Ethics assessment

In case of the development and application of emerging technologies, regulation may not always be timely enough and more generic forward looking guidance is needed. The EU SATORI project developed a CEN workshop agreement on ethics assessment and an ethical impact assessment framework for research and innovation. IEEE has introduced a Global Initiative for Ethical Considerations in Artificial Intelligence and Autonomous Systems. Its General Principles Committee seeks to articulate high-level ethical concerns that apply to all types of artificial intelligence and autonomous systems that:

1) “Embody the highest ideals of human rights that honour their inherent dignity and worth.
2) Prioritize the maximum benefit to humanity and the natural environment.
3) Mitigate risks and negative impacts as AI/AS evolve as socio-technical systems.”

In an ideal world, the ethical principles should be harmonized to avoid the “distant working” in such countries where the regulation allows the unethical actions. The harmonization is challenging because the interpretation of ethics is based on moral principles and those vary from culture to culture. Discussion and collaboration between technology developers, philosophers and sociologists are needed to develop the principles and necessary codes of conducts. The transparency offered by social media platforms can be helpful in raising the awareness of ethics. When taking the issue further, the prevailing culture should be built into the systems if we don’t want the systems to develop our culture in the future.

Selected articles and websites

Directive 95/46/EC, The General Data Protection Regulation
Ethics assessment for research and innovation – Part 1: Ethics committee
Ethics assessment for research and innovation – Part 2: Ethical impact assessment framework
Finland Banks on Medical Robots to Facilitate Elderly Care
SATORI- Stakeholders Acting Together On the ­ethical impact assessment of ­Research and Innovation
Shashkevich, A., Stanford scholars, researchers discuss key ethical questions self-driving cars present
The IEEE Global Initiative on Ethics of Autonomous and Intelligent Systems
What are genome editing and CRISPR-Cas9?

Raija Koivisto

VTT Technical Research Centre of Finland Ltd.
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Platforms for education and learning

A digital platform is in many ways the ideal tool to manage inflow, storage and outflow of knowledge. Data, information, news, knowledge and other types of content can be produced and collected on a platform. A platform also serves as a mediator and broker of these contents, providing access and enabling algorithmic or collaborative means to process it. Furthermore, a platform provides an interface for absorbing knowledge, i.e. to learn, study and be informed.

In this signal post we will have a look at some examples of platform economy entering the world of education and learning. The two topics under analysis are: (1) e-learning platforms in formal education and (2) online education resources and degrees.

E-learning platforms in formal education

Online platforms have been adopted in formal education on levels. Schools and universities manage their curriculum, learning materials, assignments, distance education, etc. in platforms. These e-learning platforms help the educational establishments and teachers to organise their work as well as the students to organise theirs. In a way, you could think of the platform being the teachers’ room, classroom and personal study space in one. Online environment additionally facilitates collaboration, for example between students in projects or between teachers, students and parents. E-learning platforms have replaced some of the previously ‘manual’ functions, but they have also provided completely new opportunities. In the big picture, they do nevertheless support and complement traditional classroom-type formal education rather than fully replace it.

One of the best known e-learning platforms is Moodle. It belongs to the tradition of open source software, and it is popular all over the world. The key traits of the system include the opportunity to scale, adapt and modify it and the flexibility to create personalised learning environments under one umbrella.

Online education resources and degrees

Another type of application of the platform economy is the fully online education and learning platforms such as Khan Academy (free online learning resource) and Udacity (free online classes and commercial nanodegrees). Suchlike platforms can provide programs similar to those by formal educational institutions or smaller study entities for vocational or personal learning. Online education resources and degrees are typically open for all, enabling worldwide attendance, and targeting mainly adults. Some function as free non-profit initiatives while others are run as profitable businesses, much like open universities and municipal or commercial education centres.

For example, Khan Academy provides a free, no-ad online education platform that partners with respected institutions such as NASA and MIT. The offering stretches from kindergarten level to science and programming.  Udacity, on the other hand, has developed a so-called online nanodegree program product, where industry leaders and expert instructors offer a personalised learning experience. These intensive programs of 6-12 months even guarantee the graduates to land a job within six months of graduation or their tuition is refunded.

Things to keep an eye on

While the platform economy is employing digitalisation to make education and learning more efficient and accessible, there are also factors of uncertainty and risk. One question of uncertainty is what will be the future balance of formal and informal education. New types of education platforms may in fact have a significant role as the timely provider of new skills and competences required at different career stages. Another issue is the risks involved in the online environment, where it is difficult to verify quality or address ethical and cultural aspects of the vast flow of new information and new services.

Regarding advanced technologies linked to the platform economy, such as blockchain and artificial intelligence (AI), the education sector among others is likely to be affected. For example, the European Commission’s Joint Research Centre’s (JRC) recently published a study on blockchain in education, and the report describes promising opportunities to involve blockchain technologies in student information systems and granting or verifying certificates, etc. And according to cloud platform company Tokbox, AI may further transform the education experience by bringing along for example smart content, intelligent tutoring systems, 3D environments and universal online learning.

Selected articles and websites

Grech, A. and Camilleri, A. F. (2017). Blockchain in Education. Inamorato dos Santos, A. (ed.)
Liu, H. Men and J. Han (2009). Comparative Study of Open-Source E-Learning Management Platform. 2009 International Conference on Computational Intelligence and Software Engineering, Wuhan, pp. 1-4
Khan Academy: A personalized learning resource for all ages
Moodle: Moodle learning platform
TokBox: The Edge of Automation: Artificial Intelligence in Education
Udacity: Free online classes and Nanodegrees

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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Guest post: Rules and laws for platforms (Youtube gaming)

This time we have a guest author, who provides a fresh and personal view into the platform economy. Akseli spent two weeks at VTT Technical Research Centre of Finland Ltd in November 2017, completing his work practice programme. One of the tasks Akseli took on was to familiarize himself with the concept of the platform economy and write his very own signal post on a topic of his choice.

Akseli chose to look into Youtube gaming, and how gaming companies, gamers and regulators are currently in a difficult situation. Many interesting things are happening in this area, but the rules of the game are not always so clear…


Hi! I’m Akseli Ala-Juusela, I’m 15 years old, and I was instructed to write a blog post on platform economy, so here we are!

Many people around the world take advantage of platforms like Uber, AirBnB and Youtube. Some problems have emerged, though, as huge corporations are looking for their share in advertisements and profits from the platform.

Challenges of Youtube gaming

I’m going to use Youtube as an example since I’m most aware of its issues. You see there are underlying problems for anybody trying to play videogames for an online audience. The entertainers need to have written permission from the maker according to some, and just purchasing the game and commenting on what is happening on the screen is enough according to others. There are some clear copyright violations like uploading the whole of Star Wars to Youtube without permission from Lucasarts and Disney. But there are also some borderland cases, for example, playing a game while adding your own jokes and commentary.

This leads to all kinds of law talk that I will never understand without going to a law school. But the gist of it is that one court decision could kill a big business and ruin lives of game based internet entertainers who are one of the biggest things dependent on Youtube. These channels are desperately trying to migrate to other forms of entertainment like vlogs (video blogs) and skits (comedy shorts).

We need worldwide rules

The only smart way of going about it is by defining the rules of the internet that will either affect on a global or a local scale. I would suggest the global version as it is much easier to regulate and harder to bypass. The only problem with global rules is that it is hard to punish those you don’t find or can’t reach.

Youtube also has a unique problem that they will probably never completely solve: there are 300 hours of video added there daily [1] which makes weeding out propaganda and terrorists a lot harder. Some countries like Germany require platforms like Youtube to take illegal content off in 24 hours [2], so it is near impossible to please everybody. More so, Germany threatens with a 5-50 million euro fine for not complying so the answer to them was to make a bot that could identify and eliminate anything that could be considered as inflammatory or illegal.

In conclusion: In my opinion, this is a lackluster way to handle situations, and we need a wider set of internationally recognised rules, that are endorsed, for online platforms.

Selected articles and websites

[1] Fortunelords: 36 Mind Blowing YouTube Facts, Figures and Statistics – 2017
[2] BBC News: Germany votes for 50m euro social media fines


A big thank you to Akseli!

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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Finland’s master plan for platform economy

A couple of weeks ago (October 2017) the Prime Minister’s Office, Ministry of Economic Affairs and Employment and Finnish Funding Agency for Innovation Tekes published the national roadmap for digital platform economy for Finland. The first half of the report paints the present picture of the platform economy as a global phenomenon and Finland’s position in it.  The second half drills into the national future aspirations for success and growth and introduces a vision and roadmap for Finland. Furthermore, an atlas of ten sector-specific roadmaps is presented and an action plan to fulfil the vision is outlined.

Top-down meets bottom-up

Finland is a pioneer in launching such a comprehensive national vision, roadmap and implementation plan for digital platform economy. Germany, Japan, Singapore and even the EU have touched upon the topic in their industrial or STI (science, technology and innovation) policies, but not with such focused dedication as Finland. The Finnish strategy is to harness platform economy as an enabling tool that has potential to generate growth for businesses as well as enhance productivity of the entire society. A key element of the vision is to develop national competitive edge out of the platform economy.

But why the choice of national and collective approach, when the leading platforms (from the US) have typically emerged as market-based business innovations? The Finnish initiative seems to embrace the platform economy as a wider phenomenon that covers the potential for value creation and capture not just for companies but for citizens and the state alike. Platform ecosystems therefore extend to all actors in the society, and governmental institutions can step up to take active part. According to the report, the foreseen role of public sector includes for example:

  • facilitating society-wide dialogue and aligned national vision
  • implementing a competitiveness partnership between public and private sectors
  • strengthening the development and business environment for platforms
  • developing the knowledge base, resources and tools
  • showing example by open public data and platforms launched by the public sector
  • other enabling support such as regulative measures.

In short, the Finnish hypothesis for how to accelerate and benefit from the platform economy is to activate both the bottom-up (innovators, businesses, individuals, etc.) and top-down (governments, authorities, regulators, etc.) stakeholders. No getting stuck in the chicken-and-egg dilemma, but getting started on all levels and in a nationwide public-private-partnership.

Other interesting messages

Strengthening of the knowledge base and education to support skills in the platform economy has received a lot of attention in the Finnish roadmap report. This covers both formal education as well as further training along the career path. What is especially highlighted is software design skills, but what about entrepreneurial mindset, data-driven innovativeness and cross-sectoral service thinking?

The value of data and the vast potential for its usage is also emphasized in the report. Data economy as a concept is being mentioned, and especially the role of the public sector is explored in terms of developing rules, providing common technical specifications as well as showing the way with public data resources.

Selected articles and websites

National roadmap report: Digitaalisen alustatalouden tiekartasto
Videos from the launching event (October 23, 2017): Suomi ja tekoäly alustatalouden aikakaudella
Further information: Suomi ja tekoäly alustatalouden aikakaudella

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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The environmental footprint of the platform economy

The platform economy is inevitably responsible for a myriad of environmental impacts, both positive and negative. These impacts are, however, difficult to identify and measure because of the complex impact chains and rebound effects. Very little research results (especially quantitative) on the topic exists at present moment. In the accompanying video, we list some key factors of the environmental footprint of the platform economy relating to (1) technology, (2) digitalisation and (3) patterns of consumption and production.

Technology

Platforms, as any other digital products and services, rely on large volumes of data centres and computing power. These require considerable amounts of energy, especially in the form of electricity and cooling. On the other hand, in the most hands-on meaning of technology, we need various devices to access platforms. Production of smart phones, tablets, computers, etc. is resource consuming and new models come up constantly. Short-lived, out-dated devices end up as electronic waste.

Digitalisation

Intuitively one might assume that through digitalisation, the platform economy would replace physical and material functions with digital and virtual solutions, and thus diminish use of natural resources and reduce harmful environmental impacts. But in fact, oftentimes platforms have a way of mixing the virtual and physical worlds, in some cases even accelerating material transactions. Secondly, digitalisation enables a global outreach, which in turn can increase global logistics. We have already seen this phenomenon with ever-growing online market places with global user populations.

Consumption and production

Perhaps the most intriguing and crucial factor is the question of consumption and production patterns in the platform economy. It brings us to analyse issues such as societal values, user behaviour, business strategies and political agendas. Will our underlying objective within the platform economy be “more with less”, “more and more” or “less is more”? The topical concepts of the circular economy and sharing economy highlight sustainable and responsible aspirations. In the optimal case the platform economy can align with these concepts and for example implement in practice innovations that promote access instead of ownership.

Selected articles and websites

World Economic Forum: How can digital enable the transition to a more sustainable world?
MRonline: The hidden environmental impacts of “platform capitalism”
Government of the Netherlands, Ministry of Economic Affairs: Argument map The Platform Economy
Bemine, Emma Terämä: Sharing – more common than ever & an integral step on our way to sustainable consumption

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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Commons, zebras and team economy

The platform economy is much more than business giants Uber, Amazon or Google. Platforms can facilitate a transformation in ways of organising work, value creation, sharing, and resources. While the currently dominant development direction tends to favour large platform companies with monopoly statuses, alternative undercurrents can be identified.

Why is this important?

The focus in the platform economy has largely been on how it enables new ways to create value. Value comes from both users and producers while the platform adds its value to the ecosystem by providing tools for matching and curating the content. Network effects further multiply the value based on the extensiveness of the network.

The sole focus on value creation has, however, lead to ignoring the mechanisms by which value is distributed in the network. Platforms both mediate value creation and add value through connecting actors, sharing resources, and integrating systems, but the question is, how is this value shared? Especially platforms with near monopoly status tend to aggregate much of the value to the platform itself and not share it back to the users of the platforms in a fair amount. Platform companies, like other companies, give the surplus to their shareholders. In some cases, it could even be said that platforms exploit their users by treating them as workforce without benefits or as sources of data to be sold to advertisers. At the same time, little attention is put into how platforms serve society. The discussion is more about how they disrupt existing industries and navigate in the gray areas of legislation.

Three approaches challenging the dominant platform business

Although the big platform companies produce most of the headlines, there are interesting initiatives for alternative forms of platform economy. One is the revitalisation of the idea of commons. In the context of platforms and peer-to-peer economy, commons is understood as a mode of societal organisation, along with market and the state, and combines a resource with a community and a set of protocols. A key question related to platform economy is what data, tools or infrastructure should be treated as commons, how to govern them and how to build both for-profit and non-profit services on top of them. These and other questions of a “commons economy” are being experimented with in peer-to-peer initiatives, platform cooperatives, and blockchain-based distributed autonomous organizations.

In the same way that commons challenges the notion of ownership, a growing number of companies called “Zebras” are challenging the notion of growth. “Zebras” are companies that aim for a sustainable prosperity instead of maximal growth like “Unicorns”. They can still be for-profit but also do social good. An interesting question is whether platform economy can be used to transform the current growth-based economic system towards a more sustainable version, or will the “Zebras” as well as cooperatives and commons be left to the margins in the dominance of platform monopolies.

A third interesting idea utilising the new possibilities of connecting and collaborating through digital platforms is the idea of team economy by GoCo. It challenges the idea of a permanent organisation. In team economy, groups form around an issue or a problem and disperse once the work is done. In contrast to gig economy, the tasks aren’t simplified or clearly defined, but rather what needs to be done is jointly explored with the customer. A platform is needed to connect and offer a collaborative workplace but also provides a record of everything a person has done, a sort of online CV for the platform age.

It remains to be seen to what extent commons, “zebras” and team economy can influence the development of platform economy, but they are interesting ideas to keep an eye on.

Selected articles and websites

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Demographic factors in the platform economy: Gender

Often it may feel like we are all anonymous and equal in the online world, but at other times age, gender and other demographic and socio-economic factors seem to matter greatly. In this signal post, we discuss gender in the context of the platform economy. (See also previous post focussing on age.) What is the gender balance among platform users? Who designs and programs platforms? And what is the role of user behaviour and online culture?


Why is this important?

Platform economy has potential to support societal integrity by providing an abundance of opportunities to women and men alike. For example, gig work enabled by digital platforms brings flexibility regarding working hours and location, which is assumed to benefit stay-at home parents, who under other circumstances would stay outside the workforce.

Zooming into platform user populations, in social media usage, Uber passengers and consumers of the on-demand economy there has been found little or no difference in the US in the numbers of women and men. Sounds good! However, if we look at Uber drivers, as much as 86% are male. The exact opposite situation is found with a marketplace for handmade and vintage goods Etsy, where out of the 1.5 million sellers 86% are female. Could it be that platforms reflect and replicate the existing biases and traditions when it comes to the division of labour between women and men?

Another central point of interest is for whom platforms are designed. And who designs them? The inherent male-dominance in the software industry and venture capital is reflected in platforms in that it is dominantly men who design and make decisions about how platforms function. A characteristic example of challenges in this area is the recent controversy over a Google employee manifesto, which shows that despite efforts to increase diversity, old attitudes are very much alive.

An equally important question is how people behave and treat one another when using platforms. A case in point is the numerous incidents of online harassment and doxing (e.g. maliciously gathering and releasing private information about a person). One alarming example from video game culture gone astray is the Gamergate controversy. Online culture also shows in reputation and rating systems, where disclosing of background information such as gender may influence behaviour unfairly.

Things to keep an eye on

For new as well as existing platforms, the topic of gender is an important aspect of consideration in platform design. User strategies can at best pinpoint specific gender-related needs and provide targeted and tailored solutions. Platform owners should also acknowledge the responsibility and equality points of view to ensure the platform welcomes all unique users and treats them on an equal footing. Underlying algorithms as well as the culture of the user population should support equal opportunities and broadmindedness.

Also, it will be increasingly important for governments to keep gender equality in view when promoting digitalisation agendas, especially to involve women. Nations do face different types of challenges based on cultural context and nuances as well as status in financial and technological development, and some recommendations on how to harness women’s potential are given in a recent study.

Selected articles and websites

Harvard Business Review: The On-Demand Economy Is Growing, and Not Just for the Young and Wealthy
Pipes to platforms: How Digital Platforms Increase Inequality
GlobalWebIndex: The Demographics of Uber’s US Users
Uber: The Driver Roadmap
Pew Research Center: Social Media Fact Sheet
Pew Research Center: Online Harassment 2017
Poutanen & Kovalainen (2017): New Economy, Platform Economy and Gender
CNNtech: Storm at Google over engineer’s anti-diversity manifesto
Watanabe et al. (2017): ICT-driven disruptive innovation nurtures un-captured GDP – Harnessing women’s potential as untapped resources
Wikipedia: Gamergate controversy
European Parliament, Think Tank: The Situation of Workers in the Collaborative Economy
openDemocracy: Back to the future: women’s work and the gig economy

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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