Often it may feel like we are all anonymous and equal in the online world, but at other times age, gender and other demographic and socio-economic factors seem to matter greatly. In this signal post, we discuss gender in the context of the platform economy. (See also previous post focussing on age.) What is the gender balance among platform users? Who designs and programs platforms? And what is the role of user behaviour and online culture?
Why is this important?
Platform economy has potential to support societal integrity by providing an abundance of opportunities to women and men alike. For example, gig work enabled by digital platforms brings flexibility regarding working hours and location, which is assumed to benefit stay-at home parents, who under other circumstances would stay outside the workforce.
Zooming into platform user populations, in social media usage, Uber passengers and consumers of the on-demand economy there has been found little or no difference in the US in the numbers of women and men. Sounds good! However, if we look at Uber drivers, as much as 86% are male. The exact opposite situation is found with a marketplace for handmade and vintage goods Etsy, where out of the 1.5 million sellers 86% are female. Could it be that platforms reflect and replicate the existing biases and traditions when it comes to the division of labour between women and men?
Another central point of interest is for whom platforms are designed. And who designs them? The inherent male-dominance in the software industry and venture capital is reflected in platforms in that it is dominantly men who design and make decisions about how platforms function. A characteristic example of challenges in this area is the recent controversy over a Google employee manifesto, which shows that despite efforts to increase diversity, old attitudes are very much alive.
An equally important question is how people behave and treat one another when using platforms. A case in point is the numerous incidents of online harassment and doxing (e.g. maliciously gathering and releasing private information about a person). One alarming example from video game culture gone astray is the Gamergate controversy. Online culture also shows in reputation and rating systems, where disclosing of background information such as gender may influence behaviour unfairly.
Things to keep an eye on
For new as well as existing platforms, the topic of gender is an important aspect of consideration in platform design. User strategies can at best pinpoint specific gender-related needs and provide targeted and tailored solutions. Platform owners should also acknowledge the responsibility and equality points of view to ensure the platform welcomes all unique users and treats them on an equal footing. Underlying algorithms as well as the culture of the user population should support equal opportunities and broadmindedness.
Also, it will be increasingly important for governments to keep gender equality in view when promoting digitalisation agendas, especially to involve women. Nations do face different types of challenges based on cultural context and nuances as well as status in financial and technological development, and some recommendations on how to harness women’s potential are given in a recent study.
Selected articles and websites
Harvard Business Review: The On-Demand Economy Is Growing, and Not Just for the Young and Wealthy
Pipes to platforms: How Digital Platforms Increase Inequality
GlobalWebIndex: The Demographics of Uber’s US Users
Uber: The Driver Roadmap
Pew Research Center: Social Media Fact Sheet
Pew Research Center: Online Harassment 2017
Poutanen & Kovalainen (2017): New Economy, Platform Economy and Gender
CNNtech: Storm at Google over engineer’s anti-diversity manifesto
Watanabe et al. (2017): ICT-driven disruptive innovation nurtures un-captured GDP – Harnessing women’s potential as untapped resources
Wikipedia: Gamergate controversy
European Parliament, Think Tank: The Situation of Workers in the Collaborative Economy
openDemocracy: Back to the future: women’s work and the gig economy
Demographic factors in the platform economy: Age
Intuitively thinking online platforms seem to be all about empowerment, hands-on innovation and equal opportunities. In the digital world, anyone can become an entrepreneur, transform ideas into business and, on the other hand, benefit from innovations, products and services provided by others. But how accessible is the platform economy for people of different age? And how evenly are the opportunities and created value distributed? Some fear that platforms are only for the young and enabling the rich get richer while the poor get poorer.
In this signal post, we discuss age in the context of the platform economy. In future postings, we will explore other factors such as gender and educational background.
Why is this important?
When it comes to ICT (Information and Communication Technology) skills and adoption, the young typically are forerunners. For example, social media platforms were in the beginning almost exclusively populated by young adults. But studies show that older generations do follow, and at the moment there is little difference in the percentage of adults in their twenties or thirties using social media in the US. And those in their fifties are not too far behind either!
Along with the megatrend of aging, it makes sense that not only the young but also the middle-aged and above are taking an active part in the platform economy. Some platform companies already acknowledge this, and tailored offering and campaigns to attract older generations have been launched for example in the US. In Australia, the growing number of baby boomers and pre-retirees in the sharing economy platforms, such as online marketplaces and ride-sourcing, has been notable. Explanatory factors include the fact that regulation and transparency around platform business have matured and sense of trust has been boosted.
One peculiar thing to be taken into account is that many platforms actually benefit from attracting diverse user segments, also in terms of age. This shows especially in peer-to-peer sharing platforms. The user population of a platform is typically heavy with millennials, who are less likely to own expensive assets such as cars or real estate. Instead, their values and financial situations favour access to ownership. But the peer-to-peer economy cannot function with only demand, so also supply is needed. It is often the older population that owns the sought-after assets, and they are growingly willing to join sharing platforms. Fascinating statistics are available, for example, of Uber. As much as 65% of Uber users are aged under 35, and less than 10% have passed their 45th birthday. The demographics of Uber drivers tell a different story: adults in their thirties cover no more than 30%, and those aged 40 or more represent half of all drivers. In a nutshell, this means that the older generation provides the service and their offspring uses it.
Things to keep an eye on
In the future, we expect to see more statistics and analysis on user and producer populations of different types of platforms. These will show what demographic segments are attracted by which applications of the platform economy as well as which age groups are possibly missing. The information will help platforms to improve and develop but also address distortion, hindrances and barriers.
It may also be of interest to the public sector to design stronger measures in support of promoting productive and fair participation in the platform economy for people of all ages. Clear and straightforward regulation and other frameworks will be important to build trust and establish common rules.
Selected articles and websites
GlobalWebIndex: The Demographics of Uber’s US Users
Growthology: Millennials and the Platform Economy
Harvard Business Review: The On-Demand Economy Is Growing, and Not Just for the Young and Wealthy
INTHEBLACK: The surprising demographic capitalising on the sharing economy
Pew Research Center: Social Media Fact Sheet
Pipes to platforms: How Digital Platforms Increase Inequality
Uber: The Driver Roadmap
Platforms and blockchain to bring on beneficial disruption to taxation
Digitalisation and platform economy are usually perceived as a challenge to taxation as it is difficult to monitor and enforce taxation in the digital and global economy. New rules are needed for deciding which activities are taxable and which are not in the in sharing, collaborative and platform economies. A recent US study points out that platform businesses such as Uber and Airbnb have an impact on all three of the major categories of revenue sources: consumption taxes, income taxes and property taxes. The situation is especially relevant for Nordic countries, where the tradition of a strong tax base has been the precondition for an affluent society. The main goal is to develop taxation so that the platform economy can strive while ensuring sufficient tax revenue without compromising innovativeness.
The platform economy could, however, be the solution to these new challenges. If we have a more comprehensive look at taxation, expanding from acute challenges to long-term system-level opportunities, platforms together with blockchain and artificial intelligence technologies could help reform and improve taxation systems.
Why is this important?
Tax authorities around the world are urgently trying to find short-term and long-term fixes to the challenges linked to digitalisation and platforms. The sharing economy is one of the areas, where heated debates have accompanied the introduction of new tax measures (see e.g. Finland, France, Sweden, the US or Australia). Approaches vary from exempting small-scale peer-to-peer activities from taxes to treating gig workers as business owners or considering ride-sourcing equal to taxi travel. The importance of the issue is put into the scale in a study by PwC, estimating the value of transactions in Finland’s collaborative market in 2016 to over 100 million euros.
The European Union (EU) has been active in surveying tax challenges in the digital economy and collaborative economy. Counter measures are being designed and implemented by the Member States respectively, but joint actions and strategies on a European level and globally are also needed to ensure fair operating environment. The EU agenda stresses that all economic operators, including those in collaborative economy, are subject to taxation either according to personal income, corporate income or value added tax rules.
While the authorities are baffled, so are the individual users and producers of platforms. We are currently in a paradoxical situation, where online platforms rely on digitalisation and automation, yet the related tax procedures, deductions and declarations are largely a manual and messy burden.
Things to keep an eye on
The responses from tax authorities do not, and should not, limit to quick fixes within current tax schemes but also explore long-term considerations on principles of taxation and novel means to implement them. Examples of progressive ideas include the suggestion of a specific tax on digital economy and taxation of platforms based on bandwidth or other activity measures such as number of users, flow of data, computational capacity, electricity use or number of advertisers. It has also been proposed that tax rates should differentiate according to the origin of revenues to better steer platform-based business: a different tax burden for revenues generated by one-time access and another tax rate for revenues generated by data exploitation.
Curiously enough, the challenge could be turned into the solution, as the platform economy especially together with blockchain and artificial intelligence technologies could provide the means to more efficient future schemes of taxation. One key problem is that information of and data from platforms does not reach tax authorities. By employing blockchain and distributed ledger it would be possible to remove the need for any intermediary and improve transparency and confidentiality. For example, blockchain applied to payroll would enable removal of businesses as a middle man and allow automatic tax collection using smart contracts. And having data in distributed ledgers would enable analysis of that data for monitoring of tax compliance and horizontal communication between authorities among other things. In fact, blockchain has been argued to provide solutions from digitalisation challenges ranging from anonymity and lack of paper trail to tax havens.
Another forward-looking idea to taxation from the world programmable economy domain involves smart contracts, cryptocurrencies and programmable money, such as Bitcoin or ether by Ethereum. These are currently perceived as a source of trouble to tax authorities, but what if they were soon to be the favoured choice and solution promoted by the state as an active party? This would mean tax authorities having access to the information on payments, on which employers would be obliged to report. Authorities could thus stay on-track in real-time even when the banking and currency system grows more and more decentralised. Furthermore, even national tax planning and writing could be transformed using artificial intelligence and machine learning in time.
Selected articles and websites
Australian Taxation office: Providing taxi travel services through ride-sourcing and your tax obligations
Australian Taxation office: The sharing economy and tax
EUobserver: Nordic tax collectors set sights on new economy
European Commission: A European agenda for the collaborative economy and supporting analysis
European Parliament: Tax Challenges in the Digital Economy
France Stratégie: Taxation and the digital economy: A survey of theoretical models
IBM: Blockchain: Tackling Tax Evasion in a Digital Economy
Institute on Taxation & Economic Policy (ITEP): Taxes and the On-Demand Economy
Kathleen Delaney Thomas, University of North Carolina Law School: Taxing the Gig Economy
OECD: Addressing the Tax Challenges of the Digital Economy
PWC: How blockchain technology could improve the tax system
Sitra: Digitalisation and the future of taxation
Sky Republic: Automating & Assuring Trust Using Enterprise Blockchain in the Era of the Programmable Economy
Skatteverket: Delningsekonomi – Kartläggning och analys av delningsekonomins påverkan på skattesystemet
TEM: Jakamistalous Suomessa 2016 – Nykytila ja kasvunäkymät (Collaborative Economy in Finland –Current State and Outlook)
The Financial: Artificial Intelligence to transform tax world
Verohallinto: Jakamistalous
Wikipedia: Bitcoin
Wikipedia: Ethereum
WU & NET Team: Blockchain: Taxation and Regulatory Challenges and Opportunities, Background note
Platforms and forestry
Platform economy brings along new opportunities for forestry, ranging from more efficient management to new data-driven services and enhancing of industrial ecology. Increases in the amount and accessibility of forest data as well as data on the raw material cycles enable new solutions and collaborations and invites novel cross-sectoral innovations. Combined with advances in material technology, forests are set to become a key component in the emerging circular economy.
Why is this mportant?
There are three main areas of impact platforms can have in the forestry sector. The first is the gathering, analysis and use of forest data. Digital platforms provide an easy access to forest data. Globally this is linked especially to monitoring forest growth and identifying illegal logging. In Finland the use cases have more to do with increased efficiency of forest management, transparent sales and new services based on data.
The second area of impact is the control of the flow of materials, including wood, cellulose and further refined products. Recycling and end-of-life management also come into the picture. Wood and particularly cellulose, and their recycled fractions, can be the (raw) material for a wide range of products from packaging and clothes to fuels and energy. However, this requires good data on the characteristics of material flows and the efficient coordination of these flows. Here a platform-based system and operation model can be helpful.
The third area of impact is increased collaboration between different actors. A traditional approach is to center the activities around a specific place or plant, and there are signs of a new wave of such industrial ecology platforms, such as the Äänekoski bioproduct mill. What is especially interesting from the point of view of platform economy are the more data-driven and virtual collaborations.
Things to keep an eye on
Having good and reliable data on forests as well as the flow of wood-based materials is essential. Therefore it is worth following how the Finnish law concerning forest data proceeds, as well as what kind of players exist in the forest data business. For example, the US company Trimble acquired two Finnish companies, Silvadata and Savcor, in 2017. Furthermore, as an increasing number of new cellulose-based materials enter the market, it is good to look at the bigger picture of material flows and collaboration between actors.
Selected articles and websites
Bittejä ja biomassaa – Tiekartta digitalisaation vauhdittamaan biotalouteen
Design Driven Value Chains in the World of Cellulose dWoC
Trimble Connected Forest
Infinited Fiber brings radical change to the textile industry
Forest Solutions Platform
Global Forest Watch
The Äänekoski bioproduct mill – a new chapter in the Finnish forest industry
Trimble doubles down on Finnish companies
Finnish plastic replacement raises EUR 1 million
Metsätietolain muuttaminen
Accounting of information flows: Data balance sheet
Systematic accounting of data and information flows is about to be acknowledged as an integral part of regular internal and public reporting by organisations. Alongside finances and corporate social responsibility, the topic of data has now found its way to annual reports. Forerunners publish even dedicated accounting reports for data and information flows, something which can be recommended in data-driven sectors.
For example, Finnish Transport Safety Agency Trafi recently published their second data balance sheet (tietotilinpäätös), an annual report describing their data strategy, related architectures and inventory of data and information flows. This supports Trafi in their aim to be a forerunner in collecting data but also opening it up for maximum use for societal benefit. Through digital public sector services and open data policy, Trafi among others encourages data flows between authorities, between authorities and (typically data-producing) users and towards companies to boost business. Examples of Trafi’s data include statistics and registers on vehicles, licences, permits and accidents. Another pioneer in data accounting is the Finnish Population Register Centre, having compiled data balance sheets since 2010, although due to the nature of the registers only a summary of the report is available for the public.
Why is this important?
Platform economy is all about unleashing the cornucopia of opportunities linked to data. Users and producers as well as the functioning of the platform create, process, store and exchange data, and these data and information flows form the key type of interaction in platform economy. Furthermore, many of the emerging technology areas linked to platforms, such as artificial intelligence, blockchain or automation, are extremely data-intensive.
Management of data has therefore become an increasingly critical and strategic part of activities of companies, public sector authorities and even individuals. On the one hand, data is an asset of real value, but on the other hand, this value can only come to fruition and grow through sharing and opening. This challenges existing business logics in many sectors, where data previously had little or no role or where data flows and information systems used to be strictly in-house matters.
Arguments favouring the introduction of data accounting to regular managerial and strategy work of organisations include both discovering opportunities but also addressing threats and uncertainties. Systematic data accounting helps internal monitoring and improvement, and an open approach helps to expand collaboration and partnerships with others (users, customers, companies and authorities). Accounting should also include responses and preparedness for safety and security issues as well as strategies related to data ownership, surveillance and fulfilment of possible regulatory requirements.
Things to keep an eye on
A significant change factor in the topic of data management in Europe is the data protection regulation (EU) 2016/679 that is to be applied in all European Union Member States in May 2018. This regulation addresses the protection of natural persons with regard to the processing of personal data and on the free movement of such data.
European Data Protection Supervisor lays out a definition of accountability in the meaning that organisations need to “put in place appropriate technical and organisational measures and be able to demonstrate what they did and its effectiveness when requested”. Suchlike measures include “adequate documentation on what personal data are processed, how, to what purpose, how long; documented processes and procedures aiming at tackling data protection issues at an early state when building information systems or responding to a data breach; the presence of a Data Protection Officer that be integrated in the organisation planning and operations etc.”
Another great resource on the topic is the recent publication by the Finnish Government´s analysis, assessment and research activities on use and impacts of open data. The report describes the openness of major data resources maintained by the public administration and on means to assess the economic impacts of open data in Finland. An analysis of the relationship between firms’ use of open data and their innovation production and growth is also provided. To conclude, the report proposes specific recommendations how to enhance the impact of open data in our society, including the use of tools such as data balance sheets.
The European Digital single market strategy and especially the subtopic of online platforms fits well into the above-mentioned discussion. Issues addressed under these activities include for example concerns about how online platforms collect and make use of users’ data, the fairness in business-to-business relations between online platforms and their suppliers, consumer protection and the role of online platforms in tackling illegal content online.
Guidance on how to prepare a data balance sheet is provided by for example the Finnish Data Protection Ombudsman in English and Finnish.
Selected articles and websites
General Data Protection Regulation (EU) 2016/679 – EUR-Lex
European Data Protection Supervisor: Accountability
European Commission: Digital single market – Online platforms
Valtioneuvoston kanslia: Avoimen datan hyödyntäminen ja vaikuttavuus
Liikenteen turvallisuusvirasto Trafi: Tietotilinpäätös 2016
Väestörekisterikeskus: Tietotilinpäätös
Data Protection Ombudsman: Prepare a data balance sheet
TechRepublic: Data’s new home: Your company’s balance sheet
Digital activism
Internet, platforms and digital technologies offer new ways of spreading the message and organising action for different cause-driven movements and citizen activism. This digital activism is not limited to using platforms to support existing forms of activism, but also takes advantage of the new opportunities platforms give for distributing value and providing access for information.
Why is this important?
The clear benefit of platforms for activism is new tools for communicating, deliberating, organising and connecting. Platforms such as Enspiral support a collaborative culture, constructive deliberation and collective decision making. They pool together resources such as money, time and skills to promote a jointly agreed upon set of projects. There are also platforms aimed at explaining obscure policies or laws or doing the increasingly important fact-checking.
In addition to tools, there is a quieter form of digital activism, one aimed at changing societal structures of access of information and distribution of value. Projects building ad hoc digital networks or internet access points aim to circumvent restrictions on the access to information. Platform cooperatives aim to reshape the way value is distributed within the system. In general, the aim is to improve the possibilities of those that are respressed or silenced via digital cencorship, or left out in the winner-takes-all forms of digital economy.
Things to keep an eye on
Digital activism suffers from so called “clicktivism”, where people are eager to support a cause if it just means clicking a button. Then when nothing changes, people lose their faith also in other forms of activism. Therefore digital activism needs also “off-line” activism. At best, digital activism can support other forms of activism, at worst it can undermine them.
There are also interesting examples of what can emerge out of the interface between the physical and digital in the age of smart phones and ubiquitous connectivity. One such example is the “I’m being arrested” app, which is a panic button for demonstrators to let a preselected group of people know that they are in trouble. Using location aware and camera equipped smartphones provides new tools for ensuring transparency and fair treatment.
On the flipside, digital activism raises also questions about ethics and responsibilities. Whistleblowing and the leaking of classified information may be a necessary alarm call in some cases, and in others it may just do more harm through unintended side effects. It is worth noting where the activism rises and what are its underlying intentions. There is also the question of drawing a line between civil disobedience, mischief “for the lolz” and outright criminal activity.
A potential transformation may happen through the adoption of the tools for collective decision making and deliberation, as they find their way increasingly to more conventional arenas of decision making. It is interesting to see if they change the forms of governance.
Selected articles and websites
How a new wave of digital activists is changing society
Digital and Online Activism
Flex your political activist muscles with these resources
Mobile Justice (Team Human podcast with Jason van Anden)
Enspiral – more people working on stuff that matters
Loomio – making decisions together
See also our signal on persuasive computing
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
Agriculture in the platform economy
The opportunities with platforms do not limit to specific high-tech industries only, but spread across the society and the economy. One sector that has so far received little attention, yet holds great economic, societal and environmental promise, is agriculture.
Why is this important?
Applying digital technologies to agriculture could improve the quality, efficiency and safety of farming and the down-stream industries such as food, textiles and fuels. Although digitalisation within agriculture has been modest compared to some other sectors, platforms have been or are being developed to for example the following use contexts:
- farm management information systems
- machine and equipment management; including asset-sharing
- irrigation, fertilization and pesticides; including monitoring and optimisation
- use of automation and robotics
- food processing
- management of subsidies.
In the centre of it all is the farm and the farmer, and platforms could, besides boosting performance of the farm as a unit, facilitate interaction between producers and other businesses along value chains and value networks. Platforms could even involve the end-customers as well as the public sector, in their roles as consumers and authorities.
The opportunities of platform economy paint a more sustainable picture of agriculture, enabling better economic performance as well as less environmental burden. Animal health and welfare could be improved and aspects of safety and ethics of end-products could be better addressed and traced. Imagine being able, as a consumer, to make affordable and fully informed choices on food and clothes, matching your personal values!
Things to keep an eye on
Currently most platforms in the agriculture sector are fragmented to small, unique solutions with little or no connectivity or interoperability to other systems. However, the vast potential of more integrated and interactive solutions to connect entire value networks are envisioned, and strategic efforts are on-going for example on the European level. The Digitising European Industry initiative has carried out extensive work, including exploration of platforms for industry, and Smart Agriculture has been identified as one vertical perspective of specific importance.
Empowering the farmers is a prerequisite for boosting digital technologies and platform economy development in agriculture. Technology developers need to establish an alliance with farmers to pinpoint concrete opportunities and co-innovate.
Selected articles and websites
Working Group 2: Strengthening Leadership in Digital Technologies and in Digital Industrial Platforms across Value Chains in all Sectors of the Economy, First report (December 2016)
Digitising European Industry initiative
EIP-AGRI: Agriculture & Innovation
GODAN, Global Open Data for Agriculture and Nutrition
365FarmNet: Agricultural management software
SMAG, Smart Agriculture: Farming information systems, cloud computing & SaaS, mobile applications
Digital Twins (of products)
The concept of a ‘digital twin’ has been suggested as one of the top technology trends for 2017, but what is it all about? The digital twin is the virtual counterpart of a real physical product, and it captures the data and information related to a product’s lifecycle from design and manufacturing all the way to use and final disposal.
Why is this important?
The existing applications of digital twins include for example storing and accessing product information using RFID codes and computer-aided 3D design models. However, technology development under the megatrend of digitalisation holds promise for way more radical progress with digital twins: In-house manufacturing applications are about to step up towards solutions across entire supply chains and end-use. The lacking connection and integration between the virtual model and the physical product will be intensified towards dynamic use of data and information flow. And the advances in blockchain technologies, artificial intelligence (AI) and autonomous systems will level up the importance of digital twins, as decision-making, transactions and learning will growingly rely on interconnected products and systems, i.e. Industry 4.0 and the internet of things (IoT).
Things to keep an eye on
The role of the digital twin in the platform economy is central, as it can ideally be the universal access point for all product information as well as accumulated data along a product’s lifecycle. For design, modelling and manufacturing of products the use of digital twins is typically managed with dynamic software models. These will be in the near-future even more closely interconnected to production processes and equipment, and applications are expected to spread and evolve from manufacturing industries to many other contexts such as end-user interfaces, transport sector, service industries, etc. Platforms managing and making use of all these data, information and interconnections will evolve, and the business models to product and service industries are going to change too. Visionaries anticipate even more radical opportunities in the longer term as digital twins of products and services will be followed by digital representations of facilities, environments, people, businesses and processes.
The digital twin is much more an opportunity than a threat, as the involvement of the virtual dimension aims to improve the quality, efficiency and performance of products, services and processes rather than replacing or displacing the real physical counterpart. In fact, the digital twin has been claimed to support the human knowledge kit, boosting problem solving and innovation by enhancing our uniquely human capacity to conceptualise, compare and collaborate.
Selected articles and websites
Gartner’s Top 10 Strategic Technology Trends for 2017
How To Put Your Digital Twin On Steroids
Leveraging Digital Twins To Breathe New Life Into Your Products And Services
Digital Twin: Manufacturing Excellence through Virtual Factory Replication
About The Importance of Autonomy and Digital Twins for the Future of Manufacturing
Digital Twin Data Modeling with AutomationML and a Communication Methodology for Data Exchange
Digitalization in machine building: The digital twin
GE Digital Twin Game
Crowdfunding
Why is this important?
Crowdfunding projects have in the past has been mostly associated with consumer products and not an equity investment. According to Catherine Clifford, of Entrepreneur Magazine, “Crowdfunding is, at its heart, driven by a grandiose, ideological utopian vision of a democratization of finance in which the power of the purse strings is pulled down from the elite circles of legacy hierarchy and put in the hands of the people. It’s born of a rather anti-venture capital ethos”. But a major change in US Security Exchange Commision rules has opened the door to equity crowd funding via Reg A+ rules (Read Ruling). Chance Barnett of Forbes estimates that crowdfunding will surpass venture capital: “Just five years ago there was a relatively small market of early adopters crowdfunding online to the tune of a reported $880 million in 2010. Fast forward to today and we saw $16 billion crowd funded in 2014, with 2015 estimated to grow to over $34 billion. In comparison, the Venture Capital industry invests an average of $30 billion each year”. Crowdfund insider predicts that more and more companies will pursue equity crowdfunding, including new industries such as Agriculture, Sports, Energy, Transportation, and Biotech. Part of this growth is driven by cheap digital tools.
Things to keep an eye on
In Finland, the status of crowdfunding has been problematic, but now the situation is improving, as the government is proposing a new law on crowd funding, which should come into action in July (VNK). The new law clarifies the guidelines and makes it easier for companies to use crowd funding. Nordea has already started a crowdfunding platform for growth companies (Nordea). In addition, a crowdfunding platform for piloting and experiments was proposed in a report to the Prime Minister’s Office (VNK). In the energy sector, there are interesting examples of using crowdfunding for financing new solar power plants, such as the Finnoonportti project by Joukon Voima. Crowdfunding thus is seen to be a tool to fund startup companies aiming for growth as well as enable societal experiments or achieve a shift in the existing system.
Selected articles and websites
Crowdfunding in 2016: Five Predictions
10 Secrets of Highly Successful Crowdfunding Campaigns
An Unlikely Romance Between a Venture Capital Fund and a Crowdfunding Platform Promises to Shake Up Startup Financing
Spurring on the startup industry
Next Generation Crowdfunding Starts May 16. Expect Opportunity and Growing Pains.
How crowdfunding can help save Silicon Valley from its harebrained investors
Proposal: Funding platform for piloting and experiments
Nordea to introduce crowdfunding service to the market