Balance of power

The digital economy is transforming every corner of our lives. The changes in the businesses we interact with and the way many of us are employed mean subtle but important shifts in power. Patronage, social license and convention that have served prior generations well no longer stand-up in the brave new world we are now navigating.

It was Robyn Morgan who said that “information is power” when arguing for a rebalancing of power between the genders. She went on to argue “The secreting or hoarding of knowledge or information may be an act of tyranny camouflaged as humility”. Information and power is not just an issue between genders but also between the parties involved in employment, marketing, sales and services.

Last month I talked about the importance of trust enabled through new channels (see Trust in the digital economy). Although the new platforms that are connecting service and product providers with new customers are brokering trust, they are not seeking to balance power. Whether it is ride sharing, brokering odd jobs or acting as a product marketplace, the information and power is being centralised by the platform owner.

I’ve also written previously about the creation of new jobs in the digital economy (see More but not better jobs). While there are more jobs being created than destroyed, many of the new jobs are casual or “gig” piecework. Guy Standing, a British economist, coined the term “precariat” (combining “precarious” with “proletariat”) to describe an emerging working poor who are relying on insecure work through these platforms.

We are still in the first generation of the digital economy. It is a generally accepted phenomenon that platform businesses are “winner take all”. Although this is seldom entirely true, it has been the case that social media, ride sharing and television streaming have been dominated by a small number of businesses.

The reason that platform businesses tend to dominate is the information they accumulate. The owner of the information has disproportionate power, including the ability to set prices for the providers (often the workers) and keep competition out who lack the same market information. While power often begets power, it also encourages those who lack power to find a way to overthrow perceived inequality.

One of the models that has the potential to shake-up existing platforms is the emergence of cooperative platforms where the providers group together to also own the platform.

During the nineteenth and twentieth centuries, worker and agricultural cooperatives grew around the world in response to power imbalances or vacuums where business either displayed unfair practices or were unprepared to support a sector.

We are starting to see cooperatives rise again in response to concerns about the practices of commercial platforms by workers in the gig economy. Recent examples include cooperatives of taxi drivers (e.g., Denver’s Green Taxi Cooperative), photographers (e.g., Stocksy United) and home services (e.g., Up & Go).

Trade unions have found it particularly difficult to adapt to the gig economy and support those workers dependent on new platforms. A significant part of the problem is that unions traditionally divvy up the market by particular skills, qualifications or sectors. This model worked when education preceded a lifelong career. The economy, through changes wrought by technology, is moving to one of constant change throughout careers requiring ongoing education and a wide range of different specialisations throughout most people’s lives.

Any model representing these workers, who are becoming more important every year, will need to recognise the individual rather than the particular skill they exhibit at a point in time. Perhaps the union movement of the future will become a platform enabling those seeking work to combine with those providing education and employers needing particular skills.

Regardless of how skills are gained, the idea of “set and forget” education for life doesn’t fit with the new era of employment. Education needs to find a new continuous learning revenue model. Like other businesses disrupted by digital trends, the power held by educational institutions was, in large part, due to a monopoly on information and knowledge which has now been democratised (see Universities disrupted but not displaced).

In a world where workers are constantly adjusting their skill based on continuous education, a better approach might be to have the worker organisations combine with employers to organise and pay for the education. Perhaps the platforms of the future will facilitate and fund the constant development of skills rather than rely on the tactical exploitation of skills earned elsewhere.

The information and power has moved from old structures to new in our day-to-day work. As a result, completely new categories of work have been created. The changes, though, in the power balance are far from being sorted through. History tells us they will be, the question is whether it will be solutions from the industrial revolution reinvented or something entirely new.