The online or platform economy faces a number of challenges as it continues to reshape the way people do business.
This was the central topic of the inception conference on “The Emergence of the Platform Economy: Challenges and Opportunities in Developing Asia” organized by the Asian Development Bank (ADB), National University of Singapore, and the Philippine Institute for Development Studies (PIDS) at the ADB headquarters recently.
Noting its lack of commonly accepted definition, PIDS Senior Research Fellow Jose Ramon Albert defined online platforms “as digital intermediaries, which match supply and demand of goods, services, and information, in a multisided market of actors through the internet”.
The emergence of online platforms has opened opportunities for workers, consumers, and businesses. Such opportunities include flexible working schedules, maximized use of personal assets (Uber for cars; Airbnb for houses), and development of new products, services, and even careers.
However, PIDS Senior Research Fellow Francis Quimba said that it has also resulted in the displacement of workers and service providers, disruption of existing organization of economic activity, and possibly, the virtual monopoly of a platform owner.
Moreover, Quimba pointed out that these online platforms have widened the digital divide “across and within countries, platforms, and consumers”, citing a 2019 report by the United Nations Conference on Trade and Development that showed the connectivity gap between developed and developing countries in terms of internet use, mobile, and broadband subscriptions.
He also noted that as economies start to become highly connected, especially in urban and wealthier environments, digital activities tend to focus more on social media and social connectivity. Indonesia, for instance, has “far less [online] usage directed towards economic, trade, or social development activity”.
Quimba further explained that inequality is evident across platforms, with “people renting out their assets on ‘capital platforms’ like Airbnb to bring in supplemental income” versus those “who sign up for ‘labor platforms’ like Uber to offset shortfalls in their monthly earnings”.
Similarly, PIDS Senior Research Fellow Connie Dacuycuy said that in the increasingly on-demand “gig work”, gender gaps are also emerging, particularly in terms of participation, occupational segregation, and compensation.
“Women are less likely to work regularly than men in the on-demand gig economy. When they do, they are more likely to exit from their gig work,” Dacuycuy explained, adding that women are more engaged in housework services, while men can be found more in transport or food delivery. She also noted that women earn less than men.
These gaps, among other things, can be addressed if there is sufficient data to help understand and measure the platform economy, according to Albert.
“Measurement of digital products and transactions, especially platforms, could improve the accuracy of various statistics such as inflation, productivity, as well as other economic and financial statistics,” he said. However, obtaining data from digital platforms is challenging because these are “often located abroad” and “not always financial”, and they “don’t easily fit in official classification systems”.
To measure the platform economy, Albert suggested establishing a clearer definition of online platforms as well as identifying key data and statistical indicators to be measured.
He also proposed the implementation of regulations to ensure fair competition, decent working conditions, and protection of consumer rights to prevent the abuse of online platforms. Albert likewise reminded regulators “not to frustrate these innovative developments”. ###
This was the central topic of the inception conference on “The Emergence of the Platform Economy: Challenges and Opportunities in Developing Asia” organized by the Asian Development Bank (ADB), National University of Singapore, and the Philippine Institute for Development Studies (PIDS) at the ADB headquarters recently.
Noting its lack of commonly accepted definition, PIDS Senior Research Fellow Jose Ramon Albert defined online platforms “as digital intermediaries, which match supply and demand of goods, services, and information, in a multisided market of actors through the internet”.
The emergence of online platforms has opened opportunities for workers, consumers, and businesses. Such opportunities include flexible working schedules, maximized use of personal assets (Uber for cars; Airbnb for houses), and development of new products, services, and even careers.
However, PIDS Senior Research Fellow Francis Quimba said that it has also resulted in the displacement of workers and service providers, disruption of existing organization of economic activity, and possibly, the virtual monopoly of a platform owner.
Moreover, Quimba pointed out that these online platforms have widened the digital divide “across and within countries, platforms, and consumers”, citing a 2019 report by the United Nations Conference on Trade and Development that showed the connectivity gap between developed and developing countries in terms of internet use, mobile, and broadband subscriptions.
He also noted that as economies start to become highly connected, especially in urban and wealthier environments, digital activities tend to focus more on social media and social connectivity. Indonesia, for instance, has “far less [online] usage directed towards economic, trade, or social development activity”.
Quimba further explained that inequality is evident across platforms, with “people renting out their assets on ‘capital platforms’ like Airbnb to bring in supplemental income” versus those “who sign up for ‘labor platforms’ like Uber to offset shortfalls in their monthly earnings”.
Similarly, PIDS Senior Research Fellow Connie Dacuycuy said that in the increasingly on-demand “gig work”, gender gaps are also emerging, particularly in terms of participation, occupational segregation, and compensation.
“Women are less likely to work regularly than men in the on-demand gig economy. When they do, they are more likely to exit from their gig work,” Dacuycuy explained, adding that women are more engaged in housework services, while men can be found more in transport or food delivery. She also noted that women earn less than men.
These gaps, among other things, can be addressed if there is sufficient data to help understand and measure the platform economy, according to Albert.
“Measurement of digital products and transactions, especially platforms, could improve the accuracy of various statistics such as inflation, productivity, as well as other economic and financial statistics,” he said. However, obtaining data from digital platforms is challenging because these are “often located abroad” and “not always financial”, and they “don’t easily fit in official classification systems”.
To measure the platform economy, Albert suggested establishing a clearer definition of online platforms as well as identifying key data and statistical indicators to be measured.
He also proposed the implementation of regulations to ensure fair competition, decent working conditions, and protection of consumer rights to prevent the abuse of online platforms. Albert likewise reminded regulators “not to frustrate these innovative developments”. ###
