The ‘new’ economy benefits the few

Look around you, the world has changed. Not in the way where the crusty old person bemoans the great old day (which seems to have worked out really well for the UK), but in what’s happened under your nose in the last 10 years. The rise of the ‘gig’, the ‘crowdsource’ and the ‘disruption’ economies, what I like to call the ’platform economies’, has changed the very fabric of the world around us, and for the most part, the collective ‘we’ have lapped it up; lured by the promise of breaking the chains of the old world way of doing things and having unbridled freedom to work, and obtain work, on ‘our’ terms in nothing more than a few key strokes.

But like gorging at the all you can eat buffet, have we actually stopped to consider, ‘is this good for us’?

Some twenty years ago now was when I first came across the now common practice of offshoring. A local ‘shop’ had set up in the field I was working in at the time, offering bargain basement pricing by having the work done ‘elsewhere’. They did too but with the common assortment of headaches and frustrations for the clients that used them. While I was busy, I saw the writing on the wall — when mixed in with chop shops on pirate software, willing to undercut up to 60%, the field was on the way to be smashed. And so it was when I looked back into it, some ten years later. Many reputable studios who had been in the game for years, had shut shop and there was almost no advertising for said services in the usual rag.

Then almost ten years ago, we lost our first client to crowdsourcing, it was the first of a few we knew of. While we had bent over backwards to build the original website but when it came time to build a new one, the client used a crowdsource platform and had it built, if I recall what they said correctly, for around $400. It looked like it too, a totally out of the box solution, but ultimately the client didn’t care too much, it did the job. It was not a huge loss, we had great clients that understood the worth of good relationships first and foremost, but it was the warning shot for what was to come…

In the design field it started with 99 Designs, then came a raft of others, Fiverr, Upwork , Freelancer and many more. The basic glossy premise though was the same — if you’re a client, you can get the best people for the best price. If you are a freelancer, you can access to work in a way you never could have before and live the lifestyle you want. And maybe on the outset that may have all been true, like any of the new age economy platforms, but years on, as any Uber driver today will tell you, the truth is quite different.

I already wrote a piece on my personal experiences and opinions of platform sourcing (here), so there’s no need to rehash it again. What I think is worth considering is the social impact these platforms have had on what were once thriving sectors.

While the platforms will proudly tout lists of happy clients and wildly successful freelancers, good marketing is like that, the reality is over the past ten years they have positioned themselves as the almost unavoidable middle men. Much like, as it now transpires Uber has done, through a series strategic moves the platforms have all but eliminated what we used to think as the ‘open’ market. In turn what we have ended up with are portals, owned by the few, that control work for the many. It sounds far fetched but if you have looked for someone to do work recently, where have you turned? Likewise, as a freelancer or soloist, unless you already had a bag of clients or a solid network, where do you go to find work?

And while in the early days it was heyday for all, as more clients turned to the one stop market places and more ‘talent’ signed up as the ‘regular’ channels were drying up, before anyone knew it it became a race to the bottom. All while the platforms took their hefty %.

Imagine having a professional, eye-catching website designed for $90. Or bringing your mobile app idea to life for $150.

That’s a real statement from one of the major platforms, a platform where people are advertising rates of US$8 an hour.

OK, as client you are looking at that and are thinking, so what, that’s great for me. Maybe it is, maybe it isn’t. But here’s a question — in another ten years time, will it be great for your kids? If this is the new normal we are barrelling towards, a new normal that already is causing negative value disruption, what will it be like for our kids?

Governments live in fairy land, we all know that. But as they fluff around oblivious to the real forces in the market place, there are those who, having been left unchecked and even hailed by politicians as shining bastions of the new economy, are making the real calls about how we are going to be working, now and in the future; all to their own benefit. We should all stop and ask, maybe not for ourselves but for our kids, is this really what we want?


I also post on my *ahem* business website, where I am write about running a SME online.

This is me