Why the platform economy can unlock prosperity for billions of workers

• The platform economy could provide a boost to employment during the pandemic recovery period.

• Companies are still grappling with how the challenges of implementing it, from product quality to social welfare.

• The Pioneers of Change summit will welcome business leaders to discuss such issues.

Along with all the other huge changes – healthcare, urban infrastructure, business models – brought about by the global pandemic, it is clear the world of work faces immense upheaval too. While this is alarming in the short term, there are also opportunities to re-envision working life and, building on the digitalization of the last few years, map out healthy new models that will benefit employers and employees alike, and transform all our futures.

The rise of the “platform economy” is one recent development business leaders should be looking hard at in the post-COVID recovery period. Matching the skills of workers to the needs of users, it has the potential to streamline business processes for employers, empower employees and hugely boost the consumer experience – if it is implemented wisely.

Take 58 Daojia, a digital platform that connects people for housekeeping and babysitting services, which is part of the World Economic Forum’s New Champions Community. Its digital solution is twofold: on the supply side, a mobile app helps workers complete the human resource process online, from recruitment to contract-signing, training, performance evaluation and pay roll; on the product side, big-data analysis helps improve accuracy in terms of the time and location of the services provided. Insurance provided instantly through the platform helps protect both workers’ health and users’ property, while facial recognition technology ensures the worker selected online is the same as the one delivering the service.

It’s one example of the kind of innovation needed in the face of the challenging economic outlook following COVID-19. According to The Future of Jobs Report 2020, the pandemic has led to an immediate and sudden spike in unemployment across several key economies. The OECD predicts that, after the second wave further disrupts economies, unemployment could peak at 12.6% by the end of 2020 and could still stand at 8.9% by the end of 2021 (during periods of stability, it typically is around 5%).

As Saadia Zahidi, the Managing Director of the World Economic Forum, has pointed out, the heightened uptake of technology was already replacing job roles before the pandemic; the combination of automation and COVID-related recession creates a double disruption scenario for most workers.

A new work model is one of the focus areas of the Pioneers of Change Summit, occurring from 16-20 November. It examines how companies can best seize this rare opportunity – and responsibility – to restructure work models.

According to the World Economic Forum’s Dynamic Briefing of Transformation Map on Workplace and Employment, a significant portion of net employment growth since 2005 has occurred in the independent and self-employed categories. The rise of “platform” economies (based on broad, far-reaching digital entities like Amazon or Uber) has created more flexible work opportunities and a “gig” economy that, under ideal circumstances, allows the self-employed to fully participate.

But this new model is still undergoing development. Companies need to balance multiple factors, such as protecting workers’ social welfare, monitoring product quality, and utilizing big data and technology for digitalization, product innovation and operation efficiency.

Shouyue Technology, another member of the New Champions Community, is grappling with these challenges. It operates an online taxi-booking platform that offers both permanent and contract positions to drivers – something increasingly happening for job roles in China, allowing employees to choose what suits them.

But its mobile app platform also ensures quality control: It uses cartoons and videos for training; sends tailored content to drivers based on their performance, and makes sure that 30 seconds of training are completed before they drive each day. In terms of safety, the monitoring system Intelligence Car watches for safety-related hazards by detecting unsafe driving, warning of fatigue and sending feedback to the management team.

Planning for the new world of work, the World Economic Forum’s Transformation Map indicates the following areas as worthy of our attention:

1. Social protection: new work models and technology disruption call for innovative regulation aligned with the needs of workers.

2. Reskilling: the Fourth Industrial Revolution and demographic shifts require short-term reskilling to meet labour market demands.

3. Inclusive labour markets: the technological disruption of labour markets creates both challenges and opportunities for people.

4. Job creation and entrepreneurship: the changing global economy can quickly create value, but is slow to generate sustainable jobs, calling for new approaches.

5. Digital work design: organizations have needs for flexibility, speed and scalability that call for new ways of structuring work.

6. New work models: temporary, part-time and independent work remain overlooked in research and policy-making, even as they replace permanent employment.

When faced with new work models, innovative solutions are actively sought after. The World Economic Forum’s New Champions Community brings together forward-looking companies that are championing new business models, emerging technologies and sustainable growth strategies in the Fourth Industrial Revolution.

Faced with the consequences of the global pandemic, we have a rare but narrow window of opportunity to reflect, reimagine and reset our world. The World Economic Forum’s inaugural Pioneers of Change Summit convenes innovative leaders and entrepreneurs from around the world to showcase their solutions, build meaningful connections and inspire change across the Forum’s diverse multistakeholder communities. Take this rare opportunity to connect with global innovators and explore innovative solutions in a time of change.

Register here to become a digital member of the World Economic Forum. During your 30-day free trial period, you will have access to the advanced feature of Strategic Intelligence and register for parts of the programme of Pioneers of Change Summit.