Risks and Opportunities of “Platformization” Essay

Introduction

Changes in the economic and social structures of modern societies have seen the emergence of new platforms for business and socializing. The concept of a platform society has emerged from this trend and it refers to the use of digital markets to complete transactions or foster social engagements (van Dijck, Poell and de Waal, 2011). The concept of the platform society is contested because researchers have varied limits of accepting the above description (Manzerolle and Daubs, 2021). Nonetheless, globally, five technology companies dominate the digital market space and dominate traffic across major internet platforms. They include Google, Facebook, YouTube, Amazon and Microsoft (van Dijck, Poell and de Waal, 2018). Collectively, they have the power to shape the geopolitical landscape of human populations through their controls on information exchange and discussions that occur on their platforms.

Jointly, these tech companies have billions of users, which means they control knowledge flow to a degree. This extensive power attracts concerns from skeptics who highlight the potential for information manipulation and censorship as key concerns in “platformization” (van Dijck, Poell and de Waal, 2018). The growth of the sharing economy, which has been witnessed through the success of multinational companies, such as Airbnb and Uber, has also elevated the importance of “platformization” in the global economy (Manzerolle and Daubs, 2021). This heightened relevance stems from the reliance of entrepreneurs on these tech companies to facilitate their business transactions. Therefore, their operational model is built on the services provided by the tech giants. Based on this relationship, the global economy is experiencing “platformization” as a common theme that runs across different business segments. However, the impact of this trend on individuals and societies is poorly understood. This paper seeks to fill this knowledge gap by investigating the risks and opportunities of “platformization.”

What Is a Platform Society?

The idea of a platform society comes from the acceptance of the rules of a shared economy as a common business and social practice. A platform society is characterized by the use of a globalized online platform that funnels social, economic, and interpersonal relationships through digital platforms using algorithms and user data (Manzerolle and Daubs, 2021). This type of society is often organized across three levels of engagement with the first one being the individual standard where economic and social issues are discussed (van Dijck, Poell and de Waal, 2018). The second level is the “meso” standard where information is managed within an ecosystem involving different individual players (van Dijck, Poell and de Waal, 2018). This level of engagement gives rise to the third one, which is the macro standard and it relates to the geopolitical situation, or impact, of an issue on a country, or community.

Relevance of “Platformization” to the Economic and Socio-Political Landscape of Societies

Modern society is increasingly relying on technology to undertake most social and economic functions. Particularly the growth of social media has integrated people and businesses in ways that were never conceptualized before. This background explains the growth of social media, which has shown good deeds that could come when people are integrated (Manzerolle and Daubs, 2021). This process has served several functions for individuals and businesses among them being the ability to communicate with loved ones, contribute to discussions, topics, or interests, and develop businesses (van Dijck, Poell and de Waal, 2018). The latter part of the social media use landscape has seen businesses emerge from two types of “platformized” stages.

The first one relates to the presence of two distinct groups of parties, such as buyers and sellers, in an online community. Their interaction is likely to create value through improved efficiencies (van Dijck, Poell and de Waal, 2018). The second category of interaction happens through the creation of a common market entity, such as Amazon, or eBay, where people congregate and transact business (Manzerolle and Daubs, 2021). These models of engagement explain the success of many “platformized” businesses today because they help people of diverse interests to merge, interact, and transact with one another.

The relevance of the “platformized” society to the modern socio-political landscape is critical to the promotion of innovation and creativity in communities. The relationship between the five tech giants highlighted in this document with the “platformized” society means that it is a change agent because there are limitless types of businesses that could be formed when different parties congregate on the same platform (Manzerolle and Daubs, 2021). These possibilities come from the existence of a common technological platform through which several businesses can be formed. For example, the development of financial apps has thrived on the backdrop of these possibilities (Heawood, 2018). Results have been witnessed in the financial innovations sector where companies have developed innovative payment services to facilitate online businesses.

Increased “platformization” of the economy has seen the re-emergence of agency relationships in businesses. This trend has been observed mostly among third parties offering essential services to businesses on these platforms (Manzerolle and Daubs, 2021). For example, security service providers have become important players in most online businesses because they protect the integrity of business transactions and confidential communications (Heawood, 2018). Similarly, they have played a key role in protecting the safety of data exchanges on these platforms, thereby enabling online businesses to thrive (Baranowski, 2021). Overall, these third-party actors have added a new level of business engagement to “platformized” societies, thereby adding to the growth of associated communities. By extension, the network effect of “platformization” has helped boost innovation in the global business environment, thereby leading to business growth in multiple economic sectors.

Risks

“Platformized “societies have inherent risks that are linked to their structure and design. These risks may affect the integrity of business transactions or personal relationships that exist therein, depending on the intensity of the associated effect. In this section of the document, information security, low levels of accountability, and privacy concerns are highlighted as the main risks affecting the use of “platformized” societies (Habib et al., 2019). By extension, they suggest that security and data management issues are the main concerns characterizing the impact of such societies on people.

Information Security and Privacy Concerns

Privacy is an issue affecting the growth of platform societies because they limit opportunities to promote economic and social growth. Relative to this assertion, in today/s digital age, data is “big business” because companies collect a wealth of information about their customers (Li and Li, 2017). Platform societies have thrived on this strategy and currently account for the creation of abundant resources of consumer data. There is a high threat of unauthorized use of these data if no controls, or safeguards, are present (Singh and Gupta, 2019). Such breaches could lead to unethical, uncompetitive, and unfair business practices among the parties involved.

Public debates, inquiries, investigations, and discussions have uncovered some of these breaches. For example, the Cambridge Analytica scandal of 2018, which was debated in the House of Commons, exposed the extent information security breaches could exist in the business sector (Privacy International, 2022). As facts of the case, Cambridge Analytica used data obtained from more than 200,000 Facebook users to create targeted political campaigns for more than 80 million people (Heawood, 2018). These campaigns were aimed at achieving specific political objectives for politicians and affiliated organizations in the UK, US, and multiple countries around the world (Lapowsky, 2019). Therefore, they were mining consumer data and manipulating idea formation for a profit.

The unethical nature of this action saw Cambridge Analytica enhance consumers’ fears and hopes about various social, political, or economic issues based on their online behaviors. The manipulation happened after evaluating the data on four areas of probe: “conscientiousness, extraversion, agreeableness, and neuroticism” (Heawood, 2018, p. 429). This profiling tool helped Cambridge Analytica to develop targeted messages that played into consumers’ fears and hopes. This action was unethical to the extent that users did not consent to the use of such information for political, or commercial, reasons. Similarly, they were unaware that such information would be used for any other purpose apart from those initially intended (Amnesty International, 2022). Therefore, privacy and data security are key risks associated with the growth of platform societies.

Low Levels of Accountability

A cardinal rule in data management is the authentication of the source and contents of the information used. These principles of data management are rarely observed in platform societies because of poor regulation, thereby leading to low levels of accountability in the space (Kessler et al, 2020). This weakness in data management affairs erodes the trust that should support business processes and people interactions. Indeed, by making it difficult to verify the origin, or source, of data it becomes difficult to use associated information to make significant social, or business, decisions (Waheed et al., 2022). The lack of accountability is notably problematic in business, or economic, decisions because someone needs to be held accountable for resources allocated.

The low levels of accountability associated with platform societies explain the nature of the environment and the type of information exchanged on these platforms. Researchers have taken a keen interest in hate speech and fake news as byproducts of the toxic nature of some platform societies, such as social media platforms (Kim, Shoenberger and Sun, 2021). They argue that the lack of regulation on these platforms has made it untenable for someone with meaningful contributions to be heard (Privacy International, 2022). In an interview by a university Professor, José van Dijck said the problem cannot be solely attributed to social media companies because users have a role to play in making the platforms safe and productive as well (Diggi+t Magazine, 2019). Therefore, she does not believe that social media platforms such as Facebook and Twitter are to blame for fake news and hate speech because users carry some blame (Diggit Magazine, 2019). This statement stems from the difficulty of moderating social engagements that occur on the platform.

Opportunities

“Platformization” has the potential to positively change the lives of people and enhance business competitiveness. These benefits are intertwined with one another because people are the bedrock of business success and the latter supports families. This relationship underpins the emergence of opportunities that exist if “platformization” is adopted. Stated differently, networked ecosystems, personal branding, and improvements in quality are identified below as the main potential areas for socioeconomic growth in “platformization.”

Networked Ecosystems

A networked ecosystem integrates the activities of different players in the completion of business processes and supports the growth of personal relationships. “Platformized” societies can lead to the creation of such ecosystems both in business and in society to allow independent entities operating in the same environment to operate as a single unit (Desmet, Maerkedahl and Shi, 2017). These societies provide an opportunity for businesses to use these units as a resource for facilitating their business transactions or expanding their social networks (Privacy International, 2022). For example, networked ecosystems provide service providers with an extensive wealth of information on customers and market indicators, which are essential in making timely business decisions.

At the same time, networked ecosystems provide customers with a tool for exchanging ideas and experiences about different products, companies, or services. In this regard, they work together for the fulfillment of a common purpose, which is to enhance their customer experiences and increase the value they get from service providers (Brush, 2021). At the same time, businesses have access to the contents of these discussion forums and can sample the views of their core customers about their respective products or services. They can use the same information to make improvements accordingly.

Personal Branding

In today’s world where individuality is a common philosophy practiced across communities, the potential for creating a personal brand and monetizing it is magnified in a platformized society. The growth in the number of influencers and media personalities on YouTube, TikTok, Facebook, Instagram, and other social media platforms highlights this possibility (O’Meara, 2019). Indeed, it is conceivable for individuals to build brands on any of the above-mentioned platforms and monetize them to generate the same revenue, or following, as major corporations do. Furthermore, it is reported that some media influencers have a wider global outreach than corporations do (Haenlein et al., 2020). This reach has been made possible by the global nature of social media and the development of business analytics tools to help brands optimize their online engagements (O’Meara, 2019). At the same time, these platforms have offered an opportunity for individuals and major corporations to collaborate. This is why it is common to see major celebrities endorsing certain brands on their social media profiles.

“Platformized” societies have equalized the market landscape for businesses and individuals to compete. Thus, what was traditionally a preserved tool of a few corporations is now available to millions of people. Researchers have captured this phenomenon in their scholarly texts by describing it as a cultural media revolution where global firms are competing for the same space as individuals (Molobi, Kabiraj and Siddik, 2020). These developments have expanded opportunities for people to gain employment because “platformized “systems monetize brand engagements in the same way as traditional media do (O’Meara, 2019). Emerging countries that have rampant unemployment levels are likely to benefit from these opportunities because young people may monetize their skills online and gain access to a global audience. Therefore, the opportunities for personal branding created by the “platformized” society are immense. However, it may take a long while before these benefits can be fully realized.

Development of Quality Content

The democratization of the online digital platform has made it possible to achieve high standards of quality in the production of goods and services. The same has been observed in the production of online content because “platformized “societies have made it possible for businesses to integrate diversity into their production processes (Köbis, Soraperra and Shalvi, 2021). The same is true in the entertainment industry, which has witnessed significant disruption in the type of content audiences want to watch because of the dominance of social media in modern society.

Relevant to this study is the potential of “platformized” societies to generate organic content because users are the main producers of such materials, as opposed to large media companies, which used to generate content internally. This opportunity allows companies to pursue business leads at no cost because engagements on these platforms are free (van Driel and Dumitrica, 2021). Additionally, there is no limitation on the volume of content businesses can exchange or learn from their customers. This freedom allows both parties to engage uninhibited, thereby increasing the opportunity for the development of better products or services. Thus, “platformized” societies encourage businesses to develop quality products and services, as the basis of gaining a competitive edge over their peers.

Conclusion

This paper set to find out risks as opportunities of “platformization” on the socioeconomic makeup of societies. The findings indicated that the main areas of risk were data management, privacy concerns, and low levels of accountability among users. Comparatively, opportunities for personal brand development, quality improvements, and the expansion of networked systems were potential advantages of adopting the “platformized” model that emerged from the probe. These insights show that several advantages and disadvantages are associated with the platform model but their relevance to the current socioeconomic setup of modern society cannot be ignored. Thus, it is advisable to adopt the framework but introduce safeguards that would protect users from the possible risks mentioned.

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