Uberisation and the New Economy
Over the last two years, we saw the four giants of the Web and social media (Google, Apple, Facebook and Amazon) literally take control of the new economy. The weight of GAFA is now determinant on Wall Street, and their market capitalization exceeds those of major brands (over $1.731 trillion, according to the latest results of the NASDAQ).
In 2015, we witnessed what might be called the ¨uberisation¨ of businesses and services. A new generation of digital start-ups is on the offensive, with soaring Netflix (TV and cinema), AirBnB (tourism and hotels), Tesla (automotive) and Uber (transport), hence the name of NATU. Today, their financial value amounts to more than $ 57 billion.
Each of these four new giants of the economy contributes to the accelerated mutation of capitalism, and already threatens traditional industries:
- Netflix has over 65 million paying subscribers worldwide, and has gone beyond its original core streaming on request business, becoming producers of original and exclusive content. The company aims to triple its subscribers, covering over 200 countries and territories by 2020, and forcing the television and film industries to adapt. Netflix’s market capitalization is estimated at over $50 billion
- AirBnB’s financial value is estimated at just over $24 billion. It now threatens the most valued hotel groups in the world: Hilton Worldwide ($27 billion) and InterContinental ($25 billion). Since 2008, AirBnB has enabled more than 35 million travelers to find accommodation for a night or a few days, in more than 34,000 cities worldwide, without owning hotels and without employees.
- Tesla applies the disruption of technological innovations in the traditional industries of the automobile (with electric cars) and aviation (with Space X). With a traded valued at over $31 billion, the company’s South African inventor Elon Musk intends Reeve deliver a car 100% autonomous, and to conquer Mars by 2018
- Uber has managed to impose its public transportation and taxi services by establishing themselves in the two most populous countries in the world; India and China, without owning a single car or directly employing any drivers. With recent investments by giants Microsoft and Baidu, the market capitalization of Uber exceeds $51 billion.
This mutation of traditional capitalism affects the economy on many levels. It has profoundly transformed the labor market by promoting further independent entrepreneurship. Certainly in part due to this, there has been an increase in the number of self-employed (freelancers) in recent years.
Leverage on independent entrepreneurship
The impact of ¨uberisation¨ services is not the only reason for the rise of independent entrepreneurship. A more uncertain global economy since the beginning of the new millennium, combined with the possibilities of the web and social media technologies, had already driven an increase in the number of self-employed in the last fifteen years. But over the past two years, NATU certainly had a large effect on the phenomenon.
Currently, in the United States, one in three workers are now independent contractors – that’s almost 55 million people! In Canada, by the most recent data, the estimated number of self-employed more is than 3 million people, including more than 500,000 in Quebec. And by 2020, it is expected that these figures will double.
Faced with a restricted employment market (nearly 45% unemployment in some countries), new generations are naturally more likely to adopt entrepreneurship. According to a recent study published by the Bentley University, more than 67% of young adults under 35 are either already running their own businesses, or considering doing so upon graduation.
Driven by their natural curiosity and creativity, they are more motivated by a greater concern for balance between work and personal life. The self-employed are pioneering a new approach to work and life – an approach that emphasizes family, friends and life experiences on the rat race that represents the work 9 to, 5 as explained by Sara Horowitz, founder and executive director of the Union of freelancers, in an article by Meghan Biro that was recently published on MillenialCEO.
However, they are not the only ones to take the path of self-employment. In recent years, we have seen more and more professionals – from Generation X managers to senior baby boomers, retire early from the corporate world, and turn to the adventure of entrepreneurship, thus joining the digital generations in the new economy. Currently, in Canada alone, more than one million small businesses with less than 100 employees, generate work for more than 5 million people. That’s almost half (48%) of the active workforce public sectors.
The fragmentation of professional consulting services
With the increase in self-employment observed over the past few years, we are also seeing a fragmentation of professional consulting services, which does not only have positive effects. Today, taking advantage of new Web technologies and social media, any professional can go into business, becoming an independent contractor.
Those requiring professional consultants in their area of competence in order to perform their own digital shift, are faced with a seemingly exponential increase in the number of services offered. This overabundance often affects quality. Many businesses, including the most cautious organizations, opt for easier and faster solutions when addressing their Web and social media needs, believing that this will save time and money.
Too frequently, these easy solutions turn into very expensive fiascos, while all the processes already underway must be generally revised from the beginning. This is the danger faced by organizations that do business with some of the new breed of consultants. We live in an age where smooth presentations by self-titled experts, may bamboozle the unknowing newcomers into parting with large sums of money. Unfortunately for them, the offered shortcuts to achieve success in social networks do not exist, and that immutable rule applies to all sectors of professional activities, starting with marketing and sales.
That said, most independent entrepreneurs represent the virtues to which I have always adhered in my nearly thirty-year career. My goal was never to perform work for a living, but to advance personally in terms of skills and experience. Fortunately, in recent years I have found that it is also a professional ambition shared by several young new generations of the digital age. I noticed especially with my sons, Justin and Felix, worthy representatives of the last cohort of Generation Y, made successful careers, while remaining faithful to their initial convictions.
It is in this context that companies and organizations who use the self-employed to perform their digital shift, must be well informed about the real skills of the consultants whose services they solicit.
What do you think? Do you think the rise of independent entrepreneurship harm the quality of professional consulting services? Share your experience with our readers by commenting on this article with our readers.
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