The coronavirus pandemic has highlighted how digital platforms are contributing to our overall resilience and allowing large parts of society to continue functioning during lockdowns. In many cases, digital platforms such as video conferencing, eCommerce, or eLearning are being used as they were originally intended. In this signal post we take a look at platforms that are being adapted or used in novel ways during the pandemic.
The entertainment and sports world has been upended as movie theatres, sports venues, and concerts have been forced to close to avoid the risks associated with large crowds. Digital platforms are helping to fill the gap. Gaming platforms, such as Fortnite and Minecraft, are being used in new and innovative ways to host live concerts and music festivals. Over 12 million people watched Travis Scott’s concert on Fortnite and after the South By South West (SXSW) music festival was cancelled, a group turned to Minecraft to recreate the experience and held a Block By Block West festival online. After sporting leagues were suspended, eSports platforms have been used to host professional athletes playing cricket, football/soccer, and even Formula One races.
Maintaining physical distance and sanitizing our hands are two of the mantras used around the world to “flatten the curve”. While the days of side-by-side selfies are on hold for a while, Apple was recently awarded a patent for Synthetic Group Selfies. While they applied for the patent in 2018, well before the coronavirus, it is perfectly suited for physical distancing because it will allow a user to add photos of other people to their selfies making it look like they were side-by-side.
Sanitizing shared vehicles, like taxis and police cars, is time-consuming and difficult. Ford has issued a software update to the vehicle management platform in their Police Interceptor Utility Vehicles to use the cabin heating system to neutralize viruses. Honda and other auto manufacturers are also looking at ways to modify their vehicle platforms to reduce the risk from the coronavirus.
With a large part of the global population staying at home, ride-hailing platforms have seen large decreases in ridership. Companies like Uber are expanding their platforms and re-directing this capacity by rolling out Uber Direct and Uber Connect to allow businesses to send packages directly to home-bound customers and allowing people to send a package from their house to a nearby friend or relative.
eLearning platforms have become the primary vehicles to educate school children and university students. However, some areas of study are more complicated and face additional challenges. Medical students rely on hands-on learning but with hospital access restricted to essential workers, Tokyo Women’s Medical University is using a specially designed Virtual Reality (VR) platform to livestream surgeries to VR headsets worn by medical students at home.
In addition to increasing the resilience of our society during the pandemic, digital platforms are also showing how resilient they are by adapting in novel ways.
Selected articles and websites
How digital platforms are helping us manage through the coronavirus
New norm: Musicians performing on video game platforms
Philly band brings international lineup to live music festival in Minecraft
Coronavirus and the virtual sports revolution
George Russell wins 3rd F1 esports race in a row in simulated Azerbaijan Grand Prix
Apple patents socially-distant selfies
How Ford Turned Its Cop Cars Into Giant Ovens to Kill Coronavirus
Moving more of what matters with delivery
A Tokyo hospital is livestreaming surgeries in Virtual Reality
How digital platforms are helping us manage through the coronavirus
In our past signal posts, we’ve highlighted many ways that digital platforms are growing and impacting our everyday lives. In this signal post, we’re highlighting how those same platforms have increased our resilience and ability to adapt to these extraordinary times of the novel coronavirus Covid-19 outbreak. Although our world is currently being turned upside down, in the age of the internet and the platform economy we have many options available.
Early detection and tracking
One of the key aspects to control a virus outbreak is to discover and track it as early as possible. Artificial Intelligence-based (AI) platforms are capable of seeing patterns in large volumes of data and raising early warning flags. China informed the World Health Organization (WHO) about the Covid-19 outbreak on January 9th. However, BlueDot’s AI-driven platform analysed foreign-language news, animal and plant disease networks, and official announcements and notified its customers of the outbreak on December 31st. Other AI platforms have been developed to predict outbreaks of viruses like Ebola and Dengue fever and suggest ways to contain the outbreaks quickly.
A fast-spreading virus with a long contagious period means people may be spreading the virus across a large network of contacts, who in turn unknowingly spread it to their networks. Several mobile phone-based contact tracking apps have been developed to help health authorities isolate an infected person’s network of contacts. Singapore’s TraceTogether app uses Bluetooth to allow a user to store identifiers from other mobile phones they’ve been in close proximity with. The data is encrypted and stored locally for 21 days. If a user becomes a suspected Covid-19 case, they can release their contact data to health authorities.
Dissemination of information and misinformation
Social media platforms and online news sites are common places where people look to find out what’s happening in their network of friends, their city and country, or the world. Trusted news outlets, governments, international agencies, and local businesses have used online platforms to communicate information quickly to many people. This “rapid and broad” communication has kept people informed about the spread of the virus, steps they can take to slow the spread, and where they can turn if they need assistance.
While they are sources for valuable information about Covid-19, they can also be a source of misinformation. In some cases, the 24/7 news cycle is constantly looking for headlines that will make people “click” and they emphasize sensational new content. This was also an issue in the era of non-digital news, but there is a risk that the never-ending online news cycle contributes to people’s sense of panic. Misinformation and “Fake News” can also be rapidly propagated through social media networks. People witness panic buying in Hong Kong or Australia and within 24 hours there is a global shortage of supplies like toilet paper!
Distant socialising, working and learning
In these days of “distancing” and “shelter in place” orders affecting about half of the world’s population, platforms are now essential for daily life. Physical distancing does not have to mean social distancing since social media and free video chat services allow people to maintain contact with friends and family. They also allow local groups to organize and provide support to the most vulnerable and at-risk people in their area.
With many people remaining in their homes as much as possible to help slow the spread of the virus, e-commerce platforms, as well as food and grocery delivery platforms, are invaluable lifelines. These platforms are also helping businesses generate some revenue while their “bricks and mortar” locations have been ordered to close.
With gyms, fitness classes, swimming pools, and tennis courts closed, people are turning to exercise platforms like Tonal, FightCamp, Mirror, Peloton, Fressi, and Elixia. They offer fitness routines or live-streamed fitness classes to keep healthy and fit while staying in your home. Usage of streaming audio, video and online multi-player games is surging. Some platforms have offered new services to help housebound people simulate familiar group activities like getting together to watch a movie. Netflix Party allows friends to get together virtually to watch the same show with an online chat stream scrolling beside the video so friends can interact with each other.
As companies were told to close their physical locations and workers were told to remain in their homes, many companies accelerated their rollout of cloud-based platforms and virtual workplace platforms like Slack, Microsoft Teams, and Zoom. While not every job can be done remotely, these platforms are allowing many companies to keep operating during these unprecedented times.
While e-learning platforms have been changing the way education is delivered over the past decade, change has been slow and eLearning tools have typically augmented traditional approaches to education at most schools rather than replacing them. With schools from kindergarten to university closed in many countries, e-learning is quickly becoming the primary means of education.
The race for treatment and prevention
While the treatment of the virus and the development of a vaccine require a lot of hands-on work, AI and crowd-sourcing platforms are supporting the effort. Because every country on the planet requires large amounts of masks, gloves and other personal protective equipment there are widespread shortages. Crowd-sourcing platforms are being used to organize donation drives from businesses and individuals to quickly gather much-needed supplies.
Maker platforms, like Thingiverse, are encouraging makers to “Hack The Pandemic” and come up with ideas to help manage during the crisis. NordicBaltic.Tech is a new platform created by the Nordic Council of Ministers and GovTech venture company PUBLIC to showcase organisations and entrepreneurs that are developing technology responses to COVID-19.
Crowdsourcing is also being used to support the development of treatments and vaccines. Individuals are donating their home computer’s idle time to platforms like Folding@Home so they can perform complex analysis on the proteins in the Covid-19 virus in the search for better treatment options.
The ability of AI to make sense of large amounts of data is being used in several ways. Researchers are using AI to analyse protein structures, develop 3D models, and look for areas of weakness so new treatments can be developed. The effort to fast-track the development of a vaccine is using AI to determine the best way to safely trigger an immune response and build immunity to future infection. Finally, AI is being used to sort through the thousands of Covid-19 research papers that have been published since January. The Covid-19 Open Research Dataset (CORD-19) has over 44,000 articles and papers in machine-readable format so natural language processing AI platforms can connect the dots between studies to suggest hypotheses and areas for future research that might otherwise have been missed.
What does the future look like?
The platform economy and digitalisation have been growing so rapidly and changed how we live our lives in fundamental ways that it’s easy to take it for granted. Imagine if the Covid-19 crisis happened only 25 years ago. In 1995, there were less than 50 million internet users in the world, Amazon was barely getting started, Google was still several years away, and smartphones and social media platforms like Facebook and Twitter were about 10 years away.
The impact of the Covid-19 crisis will be severe, but digital platforms have introduced enough resiliency into our economy that large portions of it are continuing to function.
Past Signals
Below is a selection of past signal posts that highlight digital platforms helping us deal with the Coronavirus pandemic:
Deep learning and neural networks (2016-11-30)
Platforms for education and learning (2017-12-08)
Food in the platform economy: Consumer apps, production chain management and visionary ideas (2018-06-07)
Tackling fake news and misinformation in platforms (2018-04-04)
Platforms for active transport, fitness and exercise (2019-06-11)
Selected articles and websites
An AI epidemiologist sent the first warnings of the Wuhan virus
AI joins the fight against diseases like coronavirus
Singapore says it will make its contact tracing tech freely available to developers
Online learning gets its moment due to COVID-19 pandemic
Can The U.S. Crowdsource Its Way Out Of A Mask Shortage?
Folding@Home – Coronavirus – What we’re doing and how you can help
AI can help scientists find a Covid-19 vaccine
Gaming industry meets the platform economy
In this signal post we discuss the opportunities and threats in how the platform economy is changing the gaming industry. While digitalisation and the internet have already transformed the sector in many ways, technical and business models innovations are continuously giving new shape to the market. Legislative and regulatory approaches are also changing, with a strong need to address the risks and negative impacts involved. Consumer protection and money laundering are just two examples of the societally and economically important challenges in the core of gaming.
In simplified terms, gambling means wagering of money on an uncertain event and uncertain outcome, with the aim of winning more money. Gambling entails consideration and risk-taking as well as the promise of a prize. The word ‘gaming’ is typically, and in this signal post, used in reference to legal gambling, i.e. gambling services (not computer, video and mobile games, although connections to those will be discussed in the last paragraph) offered by companies in compliance with the law. These laws do, however, differ greatly between countries and regions, ranging from total bans to strategic gambling tourism as in Monaco or Macau.
Good (and not so good) use of platform strategies
Online gambling providers employ the same strategies found in other areas of the platform economy. Their systems are based on an eCommerce platform upon which various games and offerings are built. While many operate in a business to consumer (B2C) model, others also offer products and services in a business to business (B2B) model. By gathering feedback from their user base and testing new products and services, the online gambling providers create an ecosystem around their platform to drive innovation and build their customer base.
Providers that are licensed through countries with strict regulatory frameworks, such as in Europe and North America, are obligated to operate in a transparent and responsible manner. There are other countries with less robust regulations and in some cases, online gambling providers operating there use platform technologies such as blockchain, cryptocurrencies, and smart contracts to both build trust with their customers and to operate without complying with regulatory and tax laws.
European context
A recent study prepared for the European Commission paints a picture of the European regulatory landscape for online gambling. Taking into account the growing consumption of online gaming, the report addresses the many challenges that urgently require a stronger regulatory response, such as gambling addiction, protection of minors, consumer protection, integrity of sports, money laundering and crime. What makes regulating and enforcing regulations extremely complex in the online environment is that gambling services are offered across borders, often by virtual gambling facilities that may consist of layered eco-systems of service providers. Services are also available 24/7, their use is made extremely convenient, transactions take place immediately and the user may perceive the game experience as being anonymous.
The study emphasizes the importance of European level action. However, specific European Union (EU) level regulation is not suggested, which is in alignment with previous communications by the European Commission. National policies, and therefore national regulations, share a lot of objectives but have also major ideological differences. Harmonisation would, therefore, be a step too far at this point, but joint efforts in effective enforcement, for example, is in the interest of all parties.
The online gaming and betting operators established, licensed and regulated within the EU have organised themselves as the European Gaming and Betting Association (EGBA). The aim of EGBA is to ensure a safe and reliable European digital environment for online gaming by working together with national authorities, EU authorities as well as other stakeholders. The association is committed to a high level of consumer protection while developing regulated services with the goal to be attractive enough to channel users away from unregulated offers.
According to EGBA, the online gambling market in Europe has an annual growth of around 10% and the gross profits of the sector are expected to grow to €24.7 billion in 2020. Comparing online and land-based gambling, in 2017 the ratio between the two was 21:79. The top three most popular online offers are sports betting (40%), casino games (32%) and lotteries (13%). Interestingly, Europe is the leader, with the share of European services accounting for 49% of the global online gambling market in 2017. The international business opportunities for European gaming services is expected to grow further, especially in several US states where sports betting was recently legalised.
Case of Finland
In Finland, the gaming system is based on the exclusive right principle, and since the merger in 2017, all gambling games are being offered by one single operator Veikkaus Oy. The company is owned by the Finnish State, and the offering covers lucky games, slot machines, instant games and skill games, with one-third of its activity taking place online. Veikkaus has a strong obligation and commitment to operate games responsibly and mitigate risks, and the revenue generated is used for societal causes in its entirety. This means that roughly one billion euros per year is distributed, via the relevant ministries, to beneficiaries in culture, sports, science, youth work, etc.
Even with the long tradition and strong value basis, debates about Veikkaus and the Finnish gaming system in general get heated from time to time. For example, last autumn Veikkaus’ new strategy aimed to address the public discussions about whether the fact that revenues benefit the common good justifies the problems caused, and typically these problems are being borne by those in the weakest position. Building a safe and more responsible gaming environment is one of the big strategic goals of Veikkaus, and the decision to speed up the adoption of compulsory identification on slot machines is one practical step. This means that starting in January 2021 Veikkaus will introduce new technology that will better prevent underage gaming as well as enable players to set a ban on their own gaming.
When it comes to the digital and online world, Veikkaus is a pioneer in esports solutions, and it was among the first companies in the world to offer legal esports betting in 2014. Service development in the esports domain is continuous, and products, services and platforms around esports have been developed in collaboration with Veikkaus and others using a unique concept, the Innovation Challenge Week. The winner last year was German GameBuddy, with their innovation of a social community platform for gamers.
Interesting insights into the Finnish case are also found in the survey commissioned by Kasino Curt in 2019 that gathered citizens’ views on the monopoly, political decision making and negative impacts around gaming. One clear finding is that Finns are not fully content with the current mitigation actions to fix problem gaming: 27% of respondents said enough was done, whereas 44% disagreed. 58% went so far as to agree that gambling machines should be removed from everyday environments such as grocery stores, but 29% would not make such changes. A majority of respondents also thought Finland should break away from the monopoly and introduce a licensing system instead, totalling 40%, whereas 29% disagreed on this. The gaming market and industry implications of such a change would be significant. Public discussions comparing future alternatives are active, and the pros and cons of the licensing system option should be studied carefully in order to see if licensing could be a viable approach in the increasingly global gaming environment expressed in the platform economy.
Connections to computer, video and mobile games
Millennials and Generation Z have grown up in a digital world with easy access to computer, video and mobile games. They have a preference for entertainment where there is skill involved and there is the option to play against other players. Not only are online gambling providers catering to this preference, but physical casinos are starting to replace traditional slot machines with games that resemble video games in an effort to attract younger customers. Additionally, these younger generations grew up playing on multi-player game platforms like Fortnite, CS:GO, and Defence Of The Ancients (DOTA) and are now driving the demand for professional esports tournaments and esports betting.
The near-ubiquitous presence of tablets and mobile device platforms means young people have unprecedented access to mobile games. In many cases, these are simple entertainment. However, there is a growing segment social casino games that are introducing young people to virtual gambling. Social casino games simulate typical card and table games but players wager virtual credits and no money changes hands. The games are often integrated into social media platforms and the outcomes are not always random. Instead, they are based on psychological theories that increase engagement and player satisfaction. In some cases, online gaming providers also produce social casino games and there is growing concern that the use of social casino games amongst young people is a “gateway” to money gambling in adulthood that may contribute to gambling addiction.
Selected articles and websites
Alison Drain: White Paper, The Converging of the Gaming and Gambling Ecosystems
Esportsearning: Top Games Awarding Prize Money
European Gaming and Betting Association (EGBA)
Hackernoon: What is the Future of Gambling Industry?
Hyoun S. Kim: Social Casino Games: Current Evidence and Future Directions
Kasino Curtin tilaama tutkimus osoittaa: suomalaiset eivät luota kansanedustajiin rahapeliasioissa
MintDice: How Cryptocurrency is Changing Online Gambling in Europe
NewsBTC: MECA Coin – Creating a Democratized Online Gambling Ecosystem on Blockchain
Publications Office of the European Union, 2018: Evaluation of regulatory tools for enforcing online gambling rules and channelling demand towards controlled offers
Veikkaus: German GameBuddy wins Veikkaus Innovation Challenge Week
Veikkaus: Responsibility for the individual in focus in Veikkaus’ new strategy – compulsory identification on slot machines brought forward by a year
Veikkaus: Veikkaus – a Finnish gaming company with a special mission
Veikkaus: Veikkaus to hold an Innovation Challenge Week to find startups and begin collaboration – focus on esports
Wikipedia: Gambling
Takeaways from the Platform Economy Summit 2019
In this signal post I will share my takeaways from attending the Platform Economy Summit Europe in Frankfurt, September 17-18, 2019. The summit brought together business leaders, investors, policy makers and platform strategists to discuss opportunities and threats of platform-based business models. Political, technological and societal dimensions were also explored, especially from the European perspective, and a wide range of strategies to harness the potential of the platform economy were laid out.
The two-day summit featured inspirational in-depth talks by the platform economy experts and gurus, most notably by Professor Marshall Van Alstyne from MIT IDE and co-author of Platform Revolution Sangeet Paul Choudary. Success stories, lessons learned as well as future aspirations were shared by companies and organisations from all walks of life, such as Alibaba Group, Deutsche Bank, European Commission, World Economic Forum, Apigee, FoundersLane, MaaS Global and Amadeus. Lively panel discussions occasionally evolved into profound debates, and the interactive participation of the audience ensured all points of view were being heard.
Next I will summarise my main takeaways under the following statements:
- “The platform game has only just begun.”
- “There is no ONE platform strategy.”
- “Emerging technologies will rule in round two.”
- “The bold yet patient mindset will succeed.”
These statements reflect the overall tone of discussions at the summit, and I will explain them using what was heard and seen in the presentations, talks, panel discussions, message board conversations and polls, written materials and networking activities.
”The platform game has only just begun”
As discussed in one of our previous signal posts, the platform economy is still in its infancy, and we have only seen the very first success stories. This was also the message at the summit, and future potential across different sectors and industries was widely discussed. In fact, platforms have potential to transform all and any traditional industries but also to blur sectoral boundaries. Platform business is all about ecosystems (not egosystems) that allow different fields to collaborate and innovate something new.
Expected next steps in platform development assume tighter B2B ecosystems to form and blossom. Platforms and “platforms of platforms” will enable business relationships among competitors as well as complementors to evolve. From the European perspective the regulatory harmonisation and solid foundations in public digital infrastructure provide a good breeding ground for this. Unlike what we often hear in the mass media, various speakers at the summit saw European public sector initiatives as profoundly productive support actions to foster responsible and healthy platform business. Examples include national and EU-led actions to re-regulate and de-regulate, such as the GDPR (General Data Protection Regulation) and PSD2 (Payment Services Directive 2). European Single Market was also seen as an encouraging environment for European platforms to grow in and scale up from, on the path from local or national to global business.
Silicon Valley may be the mecca of technological innovation, and China has recently established itself as the leading business model innovator. Europe can learns from these, but also highlight its own strengths, such as its special focus on social and societal value creation. Awareness of the various pros as well as cons of the platform economy is high in Europe and keeps growing, and this attitude supports balanced and responsible development of platform activities.
”There is no ONE platform strategy”
All companies, organisations, business sectors, industries and markets have their unique qualities, and consequently there cannot be one single platform strategy that would fit all. The “digital natives” that have grown into global platform giants are obviously very different from moderate-sized incumbents in traditional industries, local markets and long business traditions. Understanding of what types of platform strategies fit with different situations is growing, and an integral part of it is also to find your own role relative to other actors in the so called ecosystem economy.
The strengths and weaknesses of an organisation help determine the best platform strategy. The size, maturity, traditions, legacy, resources, capabilities and skills are all important factors. Not everyone needs to set up their own platform, and an important step is to assess which one of the basic roles in the platform economy could suit you: the orchestrator, partner or contributor. You also need to consider who you want to join forces with and experiment and collaborate with. And who do you want to challenge and compete against?
”Emerging technologies will rule in round two”
Discussions on the platform economy are often coloured with technologically visionary ideas on AI (artificial intelligence), machine learning, blockchain technologies, big data and APIs (application programming interfaces), cloud computing, IoT (internet of things), etc. These technologies will improve functionalities such as identity management, ecosystem coordination, fostering of openness and trust, decision assistance and anomaly detection. These and more opportunities were addressed at the Platform Economy Summit, and amazing future aspirations were laid out by speakers on how these advanced technologies will be harnessed in the future.
However, the message was also pretty clear that there is no need to procrastinate and wait for all of these technology solutions to mature, even if they will be game changers later on, in the “round two” of the platform economy. Currently available technologies are more than enough to get started with, and the first round of the platform economy game is in full swing. To get your platform strategy ready and implemented is the thing to do right now, and in practice this could mean for example getting a good understanding of what is the potential with data in your branch of business. There is static and dynamic data, and there is also primary and secondary data. APIs are an important tool in ecosystem building, and B2B API activity correlates well with business growth and success.
”The bold yet patient mindset will succeed”
The often repeated message of the summit was, that companies willing to embrace the platform economy should get started and crystallise their platform strategy as soon as possible. Studies show that even a “failed” platform strategy results in better financial outcomes than no strategy at all. Developing a platform strategy necessitates boldness, radically innovative thinking and support from the top management. A platform strategy needs to go beyond digitalisation and incremental improvements, with the aim to operationalise new business models enabled by platforms. It needs to be integrated into the overall corporate strategy and show willingness to change and rethink the old ways.
But even if a platform strategy requires risk taking and changes in many aspects, including the company culture, it does not need to mean suddenly abandoning the core business. Instead, the platform strategy could be implemented, for example, in a separate business unit that is granted the resources and support to explore and develop the company in its new role as an actor in platform ecosystems.
Lack of boldness and leadership were mentioned as the common delimiting factors in platform strategy uptake. But along the next steps, if platform opportunities were being explored, the consequent challenge was often the lack of patience in fostering platform business growth. We are so used to hearing the overnight success stories of global platform corporations that our expectations of the pace of growth may be unrealistic. Instead, a patient mindset is needed, so that innovation horizons are conquered one step at a time. Also, monitoring the development of platform initiatives may often require different performance metrics and KPIs than what the traditional business is measures with. Therefore new approaches and patience will be also needed in follow-up processes.
Selected articles and websites
Jacobides, Michael G. (2019). In the Ecosystem Economy, What’s Your Strategy? Harvard Business Review
MIT: Marshall Van Alstyne
Platform Economy Summit Europe
Platform Strategist: Sangeet Paul Choudary
Is cyber security next to be disrupted by digital platforms?
In this signal, we will examine the driving forces, pressures and trends of digitization in the platform economy that are affecting the security of governments, corporations, and individuals. As digitization becomes more pervasive, we are at the stage where we can no longer afford even a brief outage without significant consequences. IBM in a research study interviewed 500 companies around the world who had experienced a data breach between July 2018 and April 2019. The study reported that the total average cost of a data breach totals to 3.92 M$ and that it takes as long as 279 days to identify and contain it.
At the same time as security threats are increasing, businesses are going through other digital transformations and expanding their digital ecosystems, shifting to cloud services and adding more devices to their networks (IoT, Internet of Things). All of these put tremendous pressure on IT infrastructure and required expertise of the staff. These challenges are discussed among different stakeholders in cyber security conferences like GCCS (Global Conference on CyberSpace) aiming to discuss the development of an international strategic cyber security framework. This is an indication of how complex and important an issue security has become and the need for international collaboration to aid in solving the problem.
Are there clear leaders leading the cyber security solutions?
Security has many aspects, such as physical security, identity management, authentication, access control, confidentiality, data integrity, and physical security to name a few. There is no one solution to meet all protection needs.
For example, take a look at Gartner’s August 2019 magic Quadrant for endpoint protection platforms, where companies are mapped in terms of completeness of their vision and their ability to execute. It seems that there is no particularly strong leader or challenger with a supreme ability to execute.
There is no one size fits all security product. Companies must knit together their own solutions. The problem is also compounded by manufacturers and vendors reluctance to share data. Even more concerning is the fact that raw data related to parts of critical infrastructure may be in the hands of private industry (for example power generation and distribution facilities, water, and wastewater treatment plants, transportation systems, oil and gas pipelines, and telecommunications infrastructure). This may prevent the countries national security teams from analyzing such data to aid in protecting this critical infrastructure and causing cyber blind spots.
Who owns cyber security in the enterprise?
Cyber security touches so many assets within an organization that it needs to definitely have oversight by the companies board of directors. At the same time, IT management and chief security officers need to learn how to communicate risks to CEO’s and boards. Given what assets need protecting is different for each company, it becomes a risk conversation and often needs to also involve the legal department.
Can blockchain help to increase the security of platforms?
A core feature of blockchain technology is encryption and decentralized data storage which can provide increased security for cloud platform infrastructures. Blockchain is being explored in the cyber security space to assist companies to maintain data integrity and to manage digital identities. PWC’s 2018 Global Blockchain Survey showed that 84% of the 600 executives surveyed across 15 territories indicated they were actively looking at blockchain. Blockchain could be a promising solution for security, but it is not yet applied widely.
What role will AI play in preventing cyber security breaches?
AI tools are being used to identify attempted, successful and failed cybersecurity attacks, learn from these attacks and update algorithms to detect these types of attacks in the future. AI may be used in endpoint protection software and vulnerability management software solutions in the future. Examples of some companies working on these types of solutions are IBM, Cylance, and Darktrace.
Examples of Security Platforms
Security is an actively developing field. In Finland alone, we can identify 375 companies dealing with security. F-Secure is one of the leading companies offering cybersecurity and privacy detection and response solutions. Given Finland’s reputation of being reliable, they have an opportunity to offer trustworthy solutions to the world.
Although we mentioned about not having a one size fits all integrated security platform there are companies with platform business models addressing pieces of the problems. Anomali Threat Platform integrates seamlessly with many security and IT systems to operationalize threat intelligence and their Developer SDK allows organizations to build custom integrations as well. GRF (Global Resilience Federation) builds, develops and connects security information-sharing communities. GRF is a provider and hub for cyber, supply chain, physical and geopolitical threat intelligence exchange between information sharing and analysis centers (ISACs), organizations (ISAOs) and computer emergency readiness/response teams (CERTs) from many different sectors and regions around the world. ILOQ advances in physical security with self-powered digital locking and mobile access management solutions that are revolutionizing the locking industry. Security Now RiskSense Solution is a vulnerability management and cyber risk platform, which helps companies manage their cyber risks through their vulnerabilities.
Selected Articles and Additional Websites
IBM Security (2019): Cost of a Data Breach Report
Internet Society (2017) GCCS – Global Conference on Cyber Space
Gartner (2019) GCCS – Global Conference on Cyber Space
The Hill – Dave Weinstein (2019): Cyber Blind Spots
PWC (2018): Blockchain in Business
IBM: Artificial intelligence for a smarter kind of cybersecurity
Cylance. AI Driven Threat Protection
Darktrace. Cyber AI Platform
Security Informed. Security Companies in Finland
Anomali. Secure Platform for trusted collaboration
F-secure
Global Resilience Federation. Multi Sector Security
Ilog. Self-powereed digital locking system
Security Now (2018). RiskSense Platform Demonstration
Cyber Balance Sheet (2018) Report Sponsored by Focal Point Data Risk
Wedge Networks (2016) Orestrated threat management
Gartner (2019). Top 7 Security and Risk Trends for 2019
Gartner 2019). 5 security questions boards will definitely ask
Elections, campaigns and voting in the platform economy
This coming spring in Finland is going to entail lively political discussions. The campaigns for the Parliamentary Elections (April 2019) are already in full swing. And after having dealt with domestic issues, the European Elections will follow (May 2019). Political debates are taking place in the media as well as workplaces, schools and other arenas where people meet. This includes also digital meeting places, and platforms of different type are growingly important in delivering political messages with wide outreach.
In this signal post, we will discuss three aspects of how the platform economy is facilitating political discourse. We will identify both positive and negative impacts on democracy, especially at the time of elections. The three topics are:
- targeted political campaigns
- fake news in politics
- electronic and online voting.
Targeted political campaigns
Digitalisation and the platform economy are changing the way that political campaigns are carried out nowadays. Voting advice applications act as platforms for candidates and parties to declare their agendas and for voters to find a match from their point of view. Another way to benefit from the wide outreach enabled by platforms is for electoral candidates to be active on social media.
While the platform economy promotes broad societal discussions and better informed decision-making, new types of problems also arise. Organized mass campaigns are masked as non-political one-to-one chitchat. Data about voters is being collected, and platform giants together with consultancies like Cambridge Analytica have been known to take targeted political campaigns and personalized adverts to a whole new level. There is little transparency, and the ways used to influence voting decisions are questionable.
It is very appropriate that platform-based solutions have been developed to tackle these issues. In Finland, the Vaalivahti initiative has been launched to help citizens identify when political adverts are displayed on Facebook. A simple browser extension, based on the software developed by Who Targets Me, needs to be installed, and an analysis of political ads and why you were being targeted is provided. The platform maintains an up-to-date database of targeted political campaigns, which is open also for researchers and journalists to examine.
Fake news in politics
The 2016 US presidential election, and the alleged fake news attacks surrounding it, was a big wake-up call around the world. Studies and investigations have been conducted with the aim to reveal what really happened, how much fake news and misinformation was being released and by whom, what the real influence on voters was and whether the very election result was affected. One example is the recent study that suggests that the exposure of the average American to pro-Trump fake news was higher than that of pro-Clinton, but the authors emphasize that rash conclusions cannot be made based on this knowledge.
Fake news by foreign or domestic, political or economic actors has the potential to disrupt democracy, especially close to elections. The forms adopted range from fake news promoting to bashing one candidate, but they may also intend to inhibit political speech and suppress voting altogether. Social media and other platforms are being used as the tools and means to distribute fake news, and regulatory governance and rule setting may be needed to address these issues.
An example of suggestions to fix problems with regulatory measures is to require transparency of political advertising on digital media by informative real-time ad disclosure. Such data includes the sponsor, money spent, targeting parameters, etc. This real-time information provided along with the ad should also be compiled and stored for later review.
Electronic and online voting
Platforms can also facilitate the casting and counting of votes by using electronic means. For example, an electronic voting platform could build on voting machines at polling stations. Or, take a few more steps forward, an online voting platform could allow those entitled to vote exercise their right from anywhere, using any device as long as they can connect to the internet.
In Finland, the topic of electronic voting has been discussed from the early 2000s on and several studies and pilots have been conducted by the Ministry of Justice. Electronic voting at polling stations was trialled in three municipalities in the 2008 municipal elections, but problems were encountered in registering votes. Work to develop electronic voting was thus discontinued around 2010, but discussions were reopened in 2016. A working group was then appointed, and a feasibility study on the introduction of online voting in Finland was published in 2017. The conclusion was that even though viable electronic voting systems already existed, they did not meet the requirements and risks outweighed benefits. Core problems included, for example, the reliability of the system and guaranteeing verification and election secrecy at the same time.
New technologies, such as blockchain, may however help solve the issues mentioned above. Blockchain could be used to fight electoral fraud and vote buying while ensuring integrity and inclusiveness. Service development with blockchain-based voting platforms is vibrant, and pilots are showing great promise.
Selected articles and websites
Greenspon Edward and Owen Taylor (2018). Democracy Divided: Countering Disinformation and Hate in the Digital Public Sphere
Hunt Allcott and Gentzkow Matthew (2017). Social Media and Fake News in the 2016 Election. Journal of Economic Perspectives, 31 (2): 211-36
Ministry of Justice. 2017. Online voting in Finland, A feasibility study
Ministry of Justice. Electronic voting in Finland
Palermo Frank, Forbes. Is Blockchain The Answer To Election Tampering?
Palmisano Tonino, The Cryptonomist: Voting in the days of Blockchain technology
Vaalivahti
Who Targets Me
Wikipedia. Voting advice application
Profiling of users in online platforms
This signal post drills into the topic of profiling of platform users. We will have a look at how information on users’ background together with data on their offline and online behaviour is used by platforms and allied businesses. On the one hand, profiling allows service providers to answer user needs and to tailor personalised content. On the other hand, being constantly surveyed and analysed can become too much, especially when exhaustive profiling efforts across platforms begin to limit or even control individuals based on evaluations, groupings and ratings. The ever increasing use of smart phones and apps, as well as use of artificial intelligence and other enabling technologies, are in particular accelerating the business around profiling, and individuals as well as regulators may find themselves somewhat puzzled in this game.
What is profiling all about?
In the context of the platform economy, we understand profiling as collecting, analysis and application of user data as a part of the functioning of a platform. This means that e.g. algorithms are used to access and process vast amounts of data, such as personal background information and records of online behaviour. The level of digital profiling can vary greatly, and a simple example would contain a user profile created by an individual and their record of activities within one platform. A more complex case could be a multi-platform user ID that not only records all of the user’s actions on several platforms but also makes use of externally acquired data, such as data on credit card usage.
The core purpose of profiling is for the platforms to simply better understand their customers and develop their services. User profiles for individuals or groups allow targeting and personalisation of the offering based on user needs and preferences, and practical examples of making use of this knowledge include tailoring of services, price-discrimination, fraud detection and filtering of either services or users.
Pros and cons of profiling
From the user perspective, profiling is often discussed regarding problems that arise. Firstly, the data collected is largely from sources other than the individuals themselves, and the whole process of information gathering and processing is often a non-transparent activity. The user may thus have little or no knowledge of what is being known and recorded of them or how their user profile data is analysed. Secondly, how profiles are made use of in platforms, as well as how this data may be redistributed and sold onwards, is a concern. Discrimination may apply not only to needs-based tailoring of service offering and pricing but extend into ethically questionable decisions based on income, ethnicity, religion, age, location, the circle of friends, gender, etc. It should also be acknowledged that profiling may lead to misjudgement and faulty conclusions, and it may be impossible for the user to correct and escape such situations. The third and most serious problem area with profiling is when data and information on users is applied in harmful and malicious ways. This involves, for example, intentionally narrowing down options and exposure of the user to information or services or aggressively manipulating, shaping and influencing user behaviour. In practice this can mean filter bubbles, fake news, exclusion, political propaganda, etc. And in fact, the very idea of everything we do online or offline being recorded and corporations and governments being able to access this information can be pretty intimidating. Let alone the risk of this information being hacked and used for criminal purposes. Add advanced data analytics and artificial intelligence to the equation and the threats seem even less manageable.
However, profiling can and should rather be a virtuous cycle that allows platforms to create more relevant services and tailor personalised, or even hyper-personalised, content. This means a smooth “customer journey” with easy and timely access to whatever it is that an individual finds interesting or is in need of. Profiling may help you find compatible or interlinked products, reward you with personally tailored offers and for example allow services and pricing to be adjusted fairly to your lifestyle. In the future we’re also expecting behavioural analytics and psychological profiling to be used increasingly in anticipatory functions, for example to detect security, health or wellbeing deviations. These new application areas can be important not only for the individual but the society as a whole. Imagine fraud, terrorism or suicidal behaviours being tactfully addressed at early stages of emergence.
Where do we go from here?
Concerns raised over profiling are inducing actions in the public and private sectors respectively and in collaboration. A focal example in the topic of data management in Europe is the General Data Protection Regulation (GDPR) (EU) 2016/679 that will be applied in all European Union Member States from 25 May 2018 onwards. This regulation addresses the protection of natural persons with regard to the processing of personal data and on the free movement of such data. And even if launched as a European rather than a global initiative, the GDPR applies to all entities processing personal data of EU citizens, and many global players have in fact already claimed compliance in all their practices. Issues covered by the regulation include limiting the scope of personal data to be collected, the individual’s right to access data on them and detailed responsibilities for those processing personal data.
While the EU tries to manage the protection of personal data and thus bring transparency and fairness to profiling, the Chinese government is exploring a very different direction by being taking the lead in gradually introducing a Social Credit System. This model is at the moment being piloted, with the aim to establish the ultimate profiling effort of citizens regarding their economic and social status. Examples of the functioning of the credit system include using the data sourced from a multitude of surveillance sources to control citizens’ access to transport, schools, jobs or even dating websites based on their score.
Another type of initiative is the Finnish undertaking to build an alternative system empowering individuals to have an active role in defining the services and conditions under which their personal information is used. The IHAN (International Human Account Network) account system for data exchange, as promoted by the Finnish Innovation Fund Sitra, is designed analogously to the IBAN (International Bank Account Number) system used in banking. The aim with IHAN is to establish an ecosystem for fair human-driven data economy, at first starting in Finland and then extending to Europe and onwards. The plan entails creating common rules and concept for information exchange, and testing of the technical platform will be done together with pilots from areas of health, transport, agriculture, etc.
Selected articles and websites
Business Insider Nordic: China has started ranking citizens with a creepy ‘social credit’ system — here’s what you can do wrong, and the embarrassing, demeaning ways they can punish you
François Chollet: What worries me about AI
General Data Protection Regulation (EU) 2016/679 – EUR-Lex
Kirk Borne: Top Data Trends for 2018 – Part 1
Platform Value Now: Tackling fake news and misinformation in platforms
Sitra: Human-driven data economy
Wikipedia: Profiling (information science)
Wikipedia: Social Credit System
Wolfie Christl, Cracked Labs: Corporate Surveillance in Everyday Life
Tackling fake news and misinformation in platforms
The online world is increasingly struggling with misinformation, such as fake news, that is spreading in digital platforms. Intentionally as well as unintentionally created and spread false content travels fast in platforms and may reach global audiences instantaneously. To pre-screen, monitor, correct or control the spreading is extremely difficult, and often the remedial response comes only in time to deal with the consequences.
In this signal post we study the problem of misinformation in the platform economy but also list potential solutions to it, with forerunner examples. Defining and establishing clear responsibilities through agreements and regulation is one part of the cure, and technological means such as blockchain, reputation systems, algorithms and AI will also be important. Another essential is to support and empower the users to be aware of the issue and practice source criticism, and this can be done for example by embedding critical thinking skills into educational curricula.
Misinformation − the size of the problem
Fake news or misinformation, in general, is not a new phenomenon, but the online world has provided the means to spread it faster and wider with ease. Individuals, organisations and governments alike can be the source or target audience of misinformation, and fake contents can be created and spread with malicious intentions, by accident or even with the objective of entertaining (for example the news satire organization The Onion).
Digital online platforms are often the place where misinformation is being released and then spread by liking, sharing, information searching, bots, etc. The online environment has not yet been able to adopt means to efficiently battle misinformation, and risks and concerns involved vary from reputation damage to global political crises. The most pessimistic views even warn us of an “infocalypse”, a reality-distorting information apocalypse. Others talk about the erosion of civility as a “negative externality”. This view points out that misinformation could, in fact, be tackled by companies in the platform economy analogously to how negative environmental externalities are tackled by manufacturing companies. It has also been suggested that misinformation is a symptom of deep-rooted systemic problems in our information ecosystem and that such an endemic condition in this complex context cannot be very easily fixed.
Solutions − truth, trust and transparency
Remedies to fake news and misinformation are being developed and implemented, even if designing control and repair measures may seem like a mission impossible. Fake accounts and materials are being removed by social media platforms, and efforts to update traditional journalism values and practices in the platform economy are being initiated. Identification and verification processes are a promising opportunity to improve trust, and blockchain among other technologies may prove pivotal in their implementation.
Example: The Council for Mass Media in Finland has recently launched a label for responsible journalism, which is intended to help the user to distinguish fake content and commercials from responsible and trustworthy journalism. The label is meant for both online and traditional media that comply with the guidelines for journalists as provided by the council.
Algorithms and technical design in general will also have an important part to play in ensuring that platforms provide the foundation and structure that repels misinformation. Taking on these responsibilities also calls for rethinking business models and strategies, as demand for transparency grows. One specific issue is the “filter bubble”, a situation where algorithms selectively isolate users to information that revolves around their viewpoint and block off differing information. Platforms such as Facebook are already adjusting and improving their algorithms and practices regarding, for example, their models for advertising.
Example: Digital media company BuzzFeed has launched an “outside your bubble” feature, which specifically gives the reader suggestions of articles providing differing perspectives compared to the piece of news they just read.
Example: YouTube is planning to address misinformation, specifically by adding “information cues” with links to third party sources when it comes to videos covering hoaxes and conspiracy theories. This way the user will automatically have suggestions to access further and possibly differing information on the topic.
Selected articles and websites
BuzzFeed: He Predicted The 2016 Fake News Crisis. Now He’s Worried About An Information Apocalypse.
BuzzFeed: Helping You See Outside Your Bubble
Engadget: Wikipedia had no idea it would become a YouTube fact checker
Financial Times: The tech effect, Every reason to think that social media users will become less engaged with the largest platforms
Julkisen sanan neuvosto: Mistä tiedät, että uutinen on totta?
London School of Economics and Political Science: Dealing with the disinformation dilemma: a new agenda for news media
Science: The science of fake news
The Conversation: Social media companies should ditch clickbait, and compete over trustworthiness
The Onion: About The Onion
Wikipedia: Fake news
Wikipedia: Filter bubble
Guest post: Rules and laws for platforms (Youtube gaming)
This time we have a guest author, who provides a fresh and personal view into the platform economy. Akseli spent two weeks at VTT Technical Research Centre of Finland Ltd in November 2017, completing his work practice programme. One of the tasks Akseli took on was to familiarize himself with the concept of the platform economy and write his very own signal post on a topic of his choice.
Akseli chose to look into Youtube gaming, and how gaming companies, gamers and regulators are currently in a difficult situation. Many interesting things are happening in this area, but the rules of the game are not always so clear…
Hi! I’m Akseli Ala-Juusela, I’m 15 years old, and I was instructed to write a blog post on platform economy, so here we are!
Many people around the world take advantage of platforms like Uber, AirBnB and Youtube. Some problems have emerged, though, as huge corporations are looking for their share in advertisements and profits from the platform.
Challenges of Youtube gaming
I’m going to use Youtube as an example since I’m most aware of its issues. You see there are underlying problems for anybody trying to play videogames for an online audience. The entertainers need to have written permission from the maker according to some, and just purchasing the game and commenting on what is happening on the screen is enough according to others. There are some clear copyright violations like uploading the whole of Star Wars to Youtube without permission from Lucasarts and Disney. But there are also some borderland cases, for example, playing a game while adding your own jokes and commentary.
This leads to all kinds of law talk that I will never understand without going to a law school. But the gist of it is that one court decision could kill a big business and ruin lives of game based internet entertainers who are one of the biggest things dependent on Youtube. These channels are desperately trying to migrate to other forms of entertainment like vlogs (video blogs) and skits (comedy shorts).
We need worldwide rules
The only smart way of going about it is by defining the rules of the internet that will either affect on a global or a local scale. I would suggest the global version as it is much easier to regulate and harder to bypass. The only problem with global rules is that it is hard to punish those you don’t find or can’t reach.
Youtube also has a unique problem that they will probably never completely solve: there are 300 hours of video added there daily [1] which makes weeding out propaganda and terrorists a lot harder. Some countries like Germany require platforms like Youtube to take illegal content off in 24 hours [2], so it is near impossible to please everybody. More so, Germany threatens with a 5-50 million euro fine for not complying so the answer to them was to make a bot that could identify and eliminate anything that could be considered as inflammatory or illegal.
In conclusion: In my opinion, this is a lackluster way to handle situations, and we need a wider set of internationally recognised rules, that are endorsed, for online platforms.
Selected articles and websites
[1] Fortunelords: 36 Mind Blowing YouTube Facts, Figures and Statistics – 2017
[2] BBC News: Germany votes for 50m euro social media fines
A big thank you to Akseli!
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