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The Future Of Innovation And The Gig Economy

The Future Of Innovation And The Gig Economy

Corporate innovator and digital transformation expert Lital Marom helps organizations unlock the potential of their business by leveraging emerging technologies and new economic models. In a recent article for Forbes, Lital discusses the emerging “platform economy” where services such as Amazon and Uber have become such a regular part of our daily lives that their conveniences are no longer questioned and their names have become verbs.

She breaks down what organizations need to know in order to successfully to navigate this new economy model, including regulations and managing the transition for your current workforce. Read her recommendations below, and see the full article here.

1. Complying with good data practices can be a win-win.

Take the General Data Protection Regulation (GDPR) legislation that went into effect in the EU earlier this year. Complying with GDPR requires a level of good quality data practice. For a business owner, an incentive to explore data quality initiatives will create opportunities for greater customer trust and engagement.

2. Regulations around labor present opportunities for worker enfranchisement.

Over recent years, we have seen platforms commodify workers to various degrees, which led many to believe these workers are being exploited. A recently published study by MIT, which surveyed over 1,100 Uber and Lyft drivers, found that the median profit was $3.37 per hour after commission and other outputs were paid, adding fuel to the fire surrounding debates on worker conditions in the gig economy. This has especially been the case when platforms exchange highly standardized work the way that Uber does.

Considering these concerns alongside perceived job threats from artificial intelligence and automation, regulations on labor are responding to concerns of unequal distribution of wealth generated and job security.

To face these concerns, the economic benefits of platforms must be understood by the public. Take eBay as an example of enabling people to participate differently in the economy. While generally only 3% of small and medium-sized enterprises sell globally, 98% of vendors on eBay are multinationals. Such opportunities for participation in the labor market can enfranchise workers.

In this way, regulations present an opportunity to think differently about the role of the workforce and how we organize the economy. What if labor wasn’t seen as an input that needed to be minimized, but as an output? Successful co-op business models, such as REI, show that this model is not mutually exclusive with outperforming your competitors.

3. The capacities of the platform-economy workforce can be augmented.

Regulations influencing platforms’ labor practices offer opportunities for business owners to empower their workers while facilitating growth and innovation. Let’s consider the reputation of workers on platforms. Currently, reputation is not carried cross-platform. When a new driver signs up for Lyft, Lyft’s main focus is failure avoidance rather than driver reputation. This means that your reputation as a driver on Uber might appear vastly different than your reputation on Lyft.

If regulators were to provide a portable reputation system that translated data from every platform into a single rating, then platforms could bypass their failure avoidance issues and focus on empowering their workers. Furthermore, imagine how this type of reputation system could eventually affect your own hiring process.

If platforms augment the capacities of their employees, they will be in a better position to fit in with regulations over labor laws (both existing and upcoming) while maintaining the ability to innovate and grow. Take the examples of Uber and Lyft again. These apps facilitate cognitive augmentation by telling drivers where to find passengers and how to get to them. The number of people providing driving services today far exceeds those driving taxis before Uber and Lyft.

4. Regulators need to understand the platforms they are regulating.

Regulators have been focusing on integrity, trust and how to position platforms within the market, defining rules of engagement and transparency to enable competition and increase the possibilities of interoperability.

To facilitate these new rules, they’ve had to create new tools. Algorithms are being created to act as middle managers between regulators and platforms. These systems collect data that is then shared with municipalities so they can have a say in how these platforms operate, from who they serve to when and how much.

In order to govern platforms without stifling innovation, an appropriate balance between regulation and digital platform innovation must be met.

Key in this search for balance must be the avoidance of a “one size fits all” regulation of algorithms. This will require regulators to recognize that not all algorithms are equal. Oftentimes, regulators want algorithms to be transparent. This poses an issue, as business owners may prefer some information to remain classified. Furthermore, this becomes more complicated for certain deep learning algorithms, considering that they’re often not even transparent to their own creators.

Regulators must become experts with respect to the types of data that platforms need to collect and utilize in order to ensure new regulations do not affect those platforms’ ability to function as a whole — or threaten their competitive edge.

Currently the founder and president of the consultancy UNFOLD, Lital Marom works closely with leading global brands to drive digital transformation through the integration of new business models and the application of emerging technologies, such as distributed ledgers (blockchain), artificial intelligence (AI), and machine learning (ML).

In her practical and engaging talks, Lital inspires business leaders to “disrupt themselves” and push beyond their limitations to future proof their businesses.

Interested in learning more about Lital and what she can bring to your next event? Email us at [email protected].

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