Section Four - Platforms, next wave and regulation
A story about distributed autonomous organisations & smart rules (14 minutes)
A story about grass
Imagine that in a few years there will be sensors everywhere in the grass in the Netherlands. These sensors monitor how long the grass is. If the grass grows too long, the grass will ask to be mowed by means of the sensors. This is done by an app notification. People with this app and a lawn mower will react and accept the notification. The grass is cut. If the sensors are happy, the mower will get paid with cryptocurrencies.
If the sensors break, they report it in another app, and other people come to repair the sensors. Dutch citizens pay for this with micropayments depending on how much grass there is in their neighbourhood. The software code to run all this is made by people from all over the world, who also receive micropayments.
In this example, the grass is mowed all over the Netherlands, without involving a company. A platform, without a company. What does that mean for the future? What if there was a Facebook without Facebook? Wouldn't there be a need for advertisements? What if there was an Uber, without Uber? Is that a blessing? Or not? Who do you talk to when taxi companies fail?
In this section we will look at the next wave of platforms and why this development underlines the importance of smart regulation.
The Next Wave
First, check this video (5 minutes) that talks about blockchain technology enabling a Decentralised Autonomous Organisation (DAO). If you do not know what blockchain is, we have some explanation materials in the additional materials.
Remember section two? We started with the architecture/infrastructure with underlying platforms like internet and the web. The idea of a DAO is that the underlying platform may be replaced by blockchain. Today, we still deal with companies, but perhaps soon we will be dealing with code. Also, everything is 'connected' thanks to the rise of the internet of things (everything has an internet connection). This offers all kinds of new opportunities for new platforms and new business models. Compared to those ideas the current gig economy is just the beginning.
We have already seen the example about grass. Let's look at some other examples:
- There is a project that strives to provide totally autonomous transport in Paris. Little orange cars that can be reserved with an app and paid in cryptocurrency. If the car earns enough money, the car itself will buy a new car. And another one. This is how the car itself starts a business. When the car is broken, the car sends a message to a mechanic, who is also paid in cryptocurrencies. In the meantime, the charging stations have the same earnings and growth model. Within no time (that is the idea) transportation in Paris is organised by the market and code;
- People with a screwdriver and an app replace batteries of sensors everywhere, and receive micropayments for that;
- Teachers no longer belong to a school, but are their own brand. Pupils are trained elsewhere, and are given micro-credentials. The teachers get micropayments;
- And so on.
That might mean that the call of former presidential candidate Elizabeth Warren, who wants to split up Big Tech, might be too late. Soon there will be compositions of code and micropayments will be skimmed everywhere. If you are not satisfied with the impact of the services of Airbnb, you can talk to Airbnb (which is hard enough). If you are not satisfied with the impact of autonomous code renting out houses, who are you going to talk to?
Governance and regulation
A possible future with DAOs is all the more reason to think hard about governance. This is very, very complex, but here are some ideas that might help:
- Regulate. Make sure that this regulation is not normative, but focuses on verifiable facts, such as: transparency, fair taxation, good use of data (GDPR);
- Ensure that the platforms comply with Open Standards to combat the network effect. Why can I (a Telegram user) not participate in a WhatsApp group? Or why is it not possible to have a videoconference with Zoom with someone using Teams? After all, if I use Gmail I can send an email to someone using a different email application;
- Use existing rules, or try to interpret them for platforms. Can you refuse a platform? Is that protectionism? How does that work?
- Establish one supervisor in one ministry. Now, there are often far too many responsible/agenda holders. The supervisor organises the political discussion. Most important: this requires a vision of society (inclusivity) and innovation.
This sounds simple, but it is very complex. Just a few questions:
- Can you ban Spotify in the Netherlands if you think they treat artists unfairly? What would consumers think?
- Can you block Airbnb if they refuse to transfer data?
- And so on.
We admit, we do not know exactly how to regulate the platforms. It is very complicated. However, regulation is very important because we should not expect too much from the customers (they prefer short-time benefits to long-term disadvantages) or the big platform companies. We have seen in recent years that the power of the big companies corrupts them.
To illustrate this, we invite you to do the next, quick exercise.
Download this PowerPoint (CC7_Stakeholders_Exercise.pptx) with True or False statements. Answer the statements. Are they true or are they false?
Download the answer here (CC7_Stakeholders_Exercise_Answered.pptx).
The enormous impact of platforms on users and society makes it incredibly important to have a vision on society, innovation and the role of platforms. Based on this vision, regulation is key to striving for the desired society, especially when platforms are becoming more and more autonomous.
The enormous impact of platforms also make platforms a very good example when it comes to determining stakeholders. That is the topic of section five.
Take aways from section four:
- In the future more and more people might work for software code;
- This offers new possibilities and makes regulation very important;
- Regulation demands a vision on society, innovation and the role of platforms.