Gig economy

The new ways of working enabled by platforms are referred to with term such as gig economy, on-demand economy or open talent economy. What is common to all of these is that they redefine the relationship between the employer and employee. While connecting supply and demand of work through a platform is nothing new, there is currently a massive growth in the size of the gig economy, fuelled by increasing online access and willingness to do disparate tasks.

Why is this important?

The welfare system, especially in the Nordic Countries, is based on the assumption of a steady employment with one employer. The current legislation and regulation is not capable of dealing with the new ways of working emerging from the platform economy as traditional criteria for what is considered as taxable income or work regulated by labour legislation no longer fits the scheme. Is everyone an entrepreneur in the platform economy or should the platform be viewed as an employer? How can social security and fair working conditions be ensured?

Gig economy proponents highlight the flexibility and freedom that platforms provide for the worker as well as the company. Especially SMEs benefit from the gig economy, as they are often agile enough to recruit quickly and are more prone to experience changing demand. Critics state that the work is unstable, isolating, stressful and devoid of welfare benefits. Gig economy favours highly skilled people with good health and thus may contribute to societal polarization. Furthermore, it is driving wages down globally, as platforms enable outsourcing of a variety of tasks, thus expanding the global marketplace.

Things to keep an eye on

To ensure fair and decent working conditions, a mix of regulation, new practices and worker collective action is required. The big benefit but also the central challenge with gig economy is that it is global. Regulation puts countries at different positions and workers have a tough time coming together and bargaining in a dispersed global network. For new practices and ways of operating, platform cooperatives are worth keeping an eye on.

For a company wanting to benefit from gig economy the focus should be on improving human relation practices. Employing should be swift and there should be a good balance between full-time and temporary workers. Different metrics to gauge employee satisfaction and working conditions should be in place and up-to-date.

Selected articles and websites

What’s After The Gig Economy? The Talent Economy
What the Gig Economy Looks Like Around the World
How The Gig Economy Will Change In 2017
The Gig Economy Celebrates Working Yourself To Death
Harnessing The Power Of The Open Talent Economy
10 Ways the Gig Economy Can Help Small Manufacturing Businesses
LinkedIn Finds Small Businesses Driving Gig Economy
Ukko.fi saa tuhat uutta asiakasta kuukaudessa – “Lainsäädäntö ei pysy mukana”
Mistä on kevytyrittäjät tehty?

Mikko Dufva

Research Scientist VTT Technical Research Centre 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 Centre 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 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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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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