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    9 views3 pages

    Platform Capitalism - GeogRev Sept 2019

    Uploaded by

    Masih Khan

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    © All Rights Reserved
    Download as PDF or read online from Scribd
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    know of Uber, Google and Airbnb — examples of companies that | ‘You may not know what platform capitalism means, but you will operate in this way. This article describes how platform capitalism is contributing to the economic changes brought by globalisation 'n November 2017, Just Eat joined the FTSE 100 list of Britain's biggest companies. It was valued in the region of £5.5 billion. That's more than Sainsbury's, Morrisons or Marks and Spencer, companies that have changed the urban geography of Britain, Yet Just Eatemploys only 2,500 staff, compared 10 Sainsbury's 190,000 and, although itis now Britain’ best-known take-away food company, it has achieved this status while owning no food outlets and selling no products. Instead, it merely charges commission of around 14% for other businesses to use the online platform it provides Just Eat to record profits in the region of £160, million in 2017 The growth of Just Eat exemplifies some of the key trends in the modern capitalist economy. The use of digital technology to enable companies like Just Eat and Uber make a profit simply by providing a service that connects consumers with the product his model allowed or ane networks desire has been dubbed platform capitalism, and is fundamental to modern globalisation. Platform capitalism is based on a fundamental shiftin the geography of economic production, and even in the nature of the raw materials exploited by businesses. In his book Platform Capitalism, academic Nick Senicek argues that, in the twenty-first century, advanced capitalism is now centred upon extracting and using a particular raw material that is very different from those ofthe past — data Other academics, such as Paul Mason in his book Postcapitalism, have also sug that the rise of data as a resource to be exploited is revolutionising the way the world economy works. The rise of di sted 1 platforms gives us the potential to work less and frees us from the to produce goods purely for profit. Platforms will, from this perspective, lead orn ey to a reshaping of economic geography. However, the dominance of major transnational corporations in the platform sector means that, so far, platform capitalism has helped 10 reinforce inequalities of wealth. Employees of platforms are too often, in Trebor Scholz’s evocative phrase, ‘Uberworked ‘and underpaid’ The collection and analysis of digital data requires a vast infrastructure, and thus has taken on a geography all ofits ‘own, Like oil, data are materials that ned and used in of ways. Such data extraction rests on a complex geographical network that involves workers in different parts ‘of the world. For example, workers in Mozambique mine the raw material coltan which is then shipped and assembled into smartphones in Asia before being shipped once more and sold to consumers, often in Europe and North America. These consumers then download the apps that collect our data — apps created by big corporations such as Facebook and Google, headquartered in California, So the geography of platform capitalism is, in part, about the trading relationships and workplaces that contribute to the entire igital economy. But it is also about the ‘ways in which platform capitalism is itself transforming the nature of globalisation. For ‘example, the need to harvest data has led to the rise of anew and powerful corporate structure, the platform, whose rapid growth has now spread across the global economy. Smnicek identifies five forms of platform, each with its own particular characteristics, though with significant overlaps between the categories, Table 1 outlines some of the characteristics of these five different platforms have to be extracted, re Itis often stated that we are now in a ‘third industrial revolution. The Economist magazine pointed out in 2012 that ‘A number of and globalisation remarkable technologies are converging: clever software, novel materials, more dexterous robots, new processes (notably three-dimensional printing) and a whole range of web-based services’ In this kind of economy, the platform is coming to play a central role, Itallows businesses to collect vast amounts of profitable data about consumers and about the business process that might help them out-compete their rivals. No wonder, then, that Just Eat has a spin-off business offering restaurant chains around the world analysis ofits vast archive of data about food. consumption habits Platform capitalism is increasingly impacting upon economic and social geography. As we turn more and more to the internet for our retail services, there has been pressure on high streets to respond. This has, some areas, driven urban regeneration schemes, with towns and cites building new shopping and leisure spaces in the hope that an improved built environment coupled with amore leisurely shopping experience will help the high street to fend off competition from online retailers. In reality though, most big high-street retailers are themselves participants in platform capitalism. The losers in this framework are often smaller retailers, that don't have the resources to collect data about their customer's shopping habits by, for example, creating their own apps. Meanwhile, turban ateas that can’t afford to regenerate Table 1 Five types of platforms themselves have increasing numbers of empty. stores, Barely a month goes by without news stories about the ‘crisis on the high stret. ‘Where did it come from? ‘The fact that lean platforms such as Uber and Just Eat are able t0 operate today is down to a number of changes in global capitalism that have in turn te-shaped the geography of globalisation. Outsourcing After the Second World War, governments across the developed world borrowed to invest both in their economies and in providing social services. This led to what has popularly become known as the ‘golden age’ ‘of global capitalism, an extraordinary period ‘of sustained economic growth, However, in the late 1960s and early 1970s these countries ‘experienced the onset of what the economist Robert Brenner has termed the ‘long downturn, a period of economic uncertainty from which we are yet to emerge Manufacturers in developed capitalist ‘countries stich as the UK and USA tried to overcome this economic crisis by reducing their labour costs. They did this by outsourcing manufacturing away from developed economies and into the newly ‘emerging economies, where labour was much ‘cheaper. The geographer David Harvey called this a ‘spatial fix’ for the economic crisis of the 1970s. One result was that transnational ‘Advertsing platforms Companies that focus on advertising as a source of income and collect data so they can sell targeted ad-spaces Google Facebook ‘Industrial platforms Companies that connect traditional ‘manufacturing processes into the digital economy in an effort to lower production costs ‘or increase productivity corporations developed new supply-chain software to run their outsourcing, This was the first big moment in the rise of platform capitalism, The IT revolution In the 1990s, the dot com boom and bust led to what Smnicek calls the ‘institutional basis for the digital economy’. During the years 1995-2000 there was an unprecedented level of investment in computers and information technology. This reached a peak in 2000 with an annual global investment of $412.8 billion, which remains unsurpassed. All this investment drove the building of vast under-sea cable networks, and stimulated developments in software and databases that ‘would prove essential to the later growth of the digital economy. The 2008 crash Finally, the global financial crisis of 2008 provided the context fr the digital economy 10 Glossary Capitalism An economic system based on the continual search for profit, often to be found through transactions in the market. Digital economy Businesses and industries that rely on information technology, data and the internet. Its becoming increasingly dificult to separate the digital economy ‘rom the ‘reat’ economy, since so many companies now incorporate the internet into their business models. Global financial crisis A crisis in the economic sytem that begins in and spreads through the activities of banks and other financial firms. The most recent example was the criss of 2008, from which the ‘world economy is stil recovering. Platform In technology terms, a platform isa digital system that enables two or more groups to interact. Platform capitalism A way of making profit out of digital interactions through the extraction, analysis, use and sale of data For example, when you use the Facebook app the company collects data about Lean platforms, Companies that own and operate their own everything you doin the app (and plenty of eet eranstlacisreteesee oe |e other things too). tanonymises and then seek to outsource or offset as many other costs Just Eat analyses these data to sell advetsing that as possible it thinks will appeal to you vehoddereducation

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