The platform economy, taken as a whole is perhaps the most singularly disruptive force impacting work and the future of work. Whilst technologies can create significant shifts in what we do, the broad spectrum of change from platforms will change how we work, and more. A platform economy could be described as one in which tools and frameworks based on external ecosystems (such as the Internet but also other networks) shape our economic and social lives. Platforms – in all their guises – act as frameworks for collaboration between users, providers and peers, and also result in these definitions blurring somewhat. Since the top 15 public ‘platform’ companies already represent $2.6 trillion in market capitalization globally, it is no surprise that 81% of executives say platform-based business models will be core to their growth strategy within three years[i]. Collaboration has clearly become more than a buzzword.
Whilst platforms have proven themselves in terms of their innovation potential, part of their disruptive nature lies in their ability to create external challenges that must be met; innovation is creating the need for further innovation. Fundamental rules of strategy are broken – with emphasis placed on external interactions, generating ecosystem value and harnessing network effects. Failure to appreciate this shift is one obvious source of disruption for business lacking the agility or culture to adapt, but the nature of the disruption means that its impact will be felt beyond those industries more obviously suited to platforms, such as manufacturing. For one, with GDP as a measurement of economic growth increasingly unable to measure the value of digital services, the need to develop new methods of assessing wealth will become pressing. It is only fitting that a new economy designs new measurement tools
Platforms will also create new standards for which there are no clear policies or in some cases, supporting structures. The traditional work model – already under pressure from other issues such as automation, will likely break, necessitating a revolution in the way that benefits are provided. One need only think of the prospect of a large minority contingent workforce to see the scale of change needed; health insurance, pensions and other provisions will need to be recalibrated in an era where the pace of technological and organisational change is outstripping the ability of both labour markets and the capacity of government to respond. Regulatory frameworks, corporate practices, access to the internet, data-ownership issues and even individual mindsets will need to change if the enormous benefits from talent platforms alone are to be realised.
Since the potential gains are so significant, developing supporting frameworks for this new economy is critical. McKinsey suggests online talent platforms alone could add $2.7 trillion to global GDP by 2025, creating work for 540 million[ii]. The old industrial model has proven incapable of providing for these people, and is responsible in many ways for inducing severe labour and talent shortages across a wide range of industries and geographies – as well perhaps for migration. Since all business are now technology businesses (or at least in various stages of becoming so), platforms offer a way of creating new opportunities and new economic and social mechanisms that are better equipped in dealing with some of our most pressing problems.