Bigtech platforms in a post-Covid world: Four big shifts

Will we reimagine our systems for good or strengthen the dark side

Consumer behavior, organizational priorities, and government regulation have all changed rapidly with the spread of Covid19. As we move further towards a post-Covid19 world, the rules of this new world will largely be determined by the decisions made and the actions taken over the next few weeks and months.

The platform economy has taken centerstage in this present crisis. The past four weeks have put into motion four big shifts that will shape the future of the platform economy. At the same time, the crisis presents a unique opportunity to create systemic solutions to humanitarian challenges.

This issue explores possible scenarios for the platform economy in a post-Covid world.

  • Scenario 1: The unique opportunity to rethink systems for a post-Covid-19 world

  • Scenario 2: Four big shifts as the platform economy takes centerstage in Covid-19

    1. The infrastructural shift will be larger than the immediate shifts to remote work and online streaming

    2. Platform regulation is almost completely stalled, even as surveillance gets increasingly legitimized; expect deregulation of healthcare data next

    3. Big Tech may take over parts of Big Government - still early days, but interesting to watch

    4. The dark side of platforms may gain greater ground in a post-Covid world

Let’s get started…

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Rethinking systems for a post-Covid world

Reimagining large scale humanitarian aid programs as-a-platform

A crisis presents an opportunity for us to rethink the systems we inhabit.

A crisis, more specifically, provides a unique opportunity to kickstart large scale humanitarian solutions which would otherwise not have had the critical mass of demand to warrant investment in systemic change.

Over the past several weeks, I’ve worked with one of the largest not-for-profits in the world to help them reimagine cash transfer programming as a scalable platform-driven model.

Cash transfer programming is the provision of money to individuals or households, either as emergency relief to address basic needs or as recovery support to protect/re-establish economic productive activities.

As economies go into lockdown, the demand for cash transfer programs - as a model to help the weakest sections of society - is rapidly growing.

Traditional cash transfer programs involve a lot of waste in the supply chain, largely owing to very high data collection costs around how cash is moving through the supply chain and how/where it eventually gets deployed. Capturing end-user analytics is non-trivial, leading to further increase in expenses.

This is where a platform approach can rapidly scale cash transfer programming and improve the unit economics of transfer, thereby improving funds utilization. By centralizing data capture across the cash transfer ecosystem, the utilization of this aid towards economic recovery can be accurately captured as well.

This is just one example of how we can fundamentally rethink inefficient systems of aid as platforms. This is a unique opportunity to accelerate the design of large-scale systemic solutions to humanitarian problems.

Rethink tech for a post-Covid19 world

More importantly, we need to reassess resilience, sustainability and governance of the systems we’ve build in a pre-Covid world.

Everything that we define as civilization — language, agriculture, housing — is technology of a sort, and shapes the kind of society we have. And we seem to be entering a moment in which we might be able to put forth a new model of technology, or perhaps even more than that. It may be that we can imagine tech that is more responsive to the new information economy, leans more on publicly- or user-owned platforms, or more simply, acknowledges the disparities that let highly-paid people continue to work from home while those in grocery stores or on the front lines of health care continue to be exposed to both harm and insufficient remuneration. Perhaps we'll finally take seriously the precarity inherent in many gig-economy jobs, or that many of the recent Silicon Valley unicorns have built their business models on the availability of underpaid and insecure labor.

Four big shifts as the platform economy takes centrestage in Covid-19

The importance of rethinking tech and reimagining our systems becomes even more important as we see today’s BigTech platforms take centrestage in Covid-19. This isn’t just about the surging stock price of Zoom or the shift to remote work. There are four much larger shifts underway which are poised to persist into the post-Covid world.

First, the biggest long term winners of remote work aren’t Slack or Zoom.

The companies best positioned to win are Microsoft and Amazon.

Infrastructure providers are best positioned as remote work becomes increasingly plausible. We won’t have a lockdown in a post-Covid world but organizations will certainly give a good rethink to what needs to be done at the workplace and what can be managed remotely. And thousands of employees, who are currently ‘beta-testing’ work-from-home will be the ones asking for this change.

It’s too early yet to predict remote work trends but it’s almost certain that more companies than ever before will move from traditional systems to the cloud.

The need for cloud services offered by Microsoft, Amazon and Google will only rise as more people are forced to work from home.

According to The New York Times, corporate technology infrastructures will struggle to cope with this new reality, leading them to abandon their own data centers and rent computing from Big Tech. Elsewhere, more users have flocked to streaming and video sites like Netflix and YouTube, forgoing cinemas even before governments had ordered them to close.

Second, Covid-19 has almost completely stalled the regulation of BigTech.

BigTech regulation has been on the rise over the last several years. 2020 was supposed to be the year when Big Government would seize power away from BigTech. Instead, what we’re seeing is quite the opposite.

While Big Tech’s misdeeds are still apparent, their actual deeds now matter more to us. We’re using Facebook to comfort ourselves while physically bunkered and social distancing. Google is being conscripted as the potential hub of one of our greatest needs—Covid-19 testing. Our personal supply chain—literally the only way many of us are getting food and vital supplies—is Amazon.

Not only is regulating BigTech off the table, the very grounds on which BigTech was supposed to be regulated - data access, privacy, and usage - is now accelerating because countering the current crisis is way more important.

It says something that the most high-profile move from the European Union in recent weeks has been to ask the bosses of Netflix Inc., and Alphabet Inc.’s Google and YouTube to throttle streaming quality to reduce Internet congestion. The EU’s technocrats in Brussels, the land of sweeping data-privacy laws, are now eying the use of smartphone geolocation metadata — anonymized, of course — to monitor the outbreak.

Healthcare, in particular, is poised for a platform revolution that was unthinkable a few weeks back, given the regulatory constraints.

If collecting and processing our personal data helps the greater good of healthcare, more benefits should accrue to the public by ensuring that what’s being collected, and how it’s handled, isn’t harmful. Oceans of data generated by what Stephen Roberts of the London School of Economics calls the “digital turn” of health surveillance will require new rules and explicit terms of engagement to limit abuse.

And will the new normal be worse than the old normal? We don’t know yet.

We don’t know what the long-term effects will be of Big Tech making peace with Big Brother — namely, a state that has also expanded its emergency powers, surveillance capabilities and size during the crisis. The mix could prove toxic in the long run, even if for now, it’s helping the common good.

Third, Big Tech may take over parts of Big Government

This sounds dramatic, but isn’t without precedent. During times of crisis, private firms often step in and take over activities which governments fail to perform. I’m going to be closely following this over the next few weeks as we see governments and tech firms figure out new ways to combat the virus.

Some interesting framing as you think through this:

Many of Amazon’s moves over the past few weeks have had the distinct flavor of government.

The hiring of 100,000 staff and a $2-an-hour pay raise is akin to a 21st-century Works Progress Administration (WPA), only private. Amazon’s hometown noblesse oblige – extending its beneficence to small businesses around its Seattle offices so that they might live to serve Amazonians another day – is akin to a government stimulus package. Amazon’s decision to stop accepting non-essential products from third-party sellers who use its warehouses is essentially Amazon regulating the marketplace.

Finally, the crisis may further strengthen and validate the dark side of BigTech platforms

First, while large platforms have the reserves and infrastructure to gain greater scale and capitalize on changing consumer behavior in this crisis, small businesses may not survive.

The average small business only has enough cash on hand to operate for 27 days without going under — when the 2009 recession kicked into full gear, nearly 2 million local small business jobs were lost. And today, the online e-commerce architecture is far more sophisticated and prepared to absorb their customers. This time, if small businesses die, many might stay dead.

Second, a lack of regulation may further validate BigTech’s exploitation of workers that I’ve often highlighted before through my research with the ILO.

While 100,000 new Amazon jobs will have a minuscule impact on a soaring unemployment rate, it’s what the shift symbolizes that’s of note…

…an increased reliance on precarious, part-time labor in the form of seasonal and highly replaceable warehouse workers or Flex delivery drivers, who work gruelling hours with no benefits. We’ve seen this model not only at Amazon, of course, but also at Lyft, Uber, Instacart, and DoorDash, which, as the virus’s spread began, offered workers who weren’t feeling well a choice between putting themselves and others at risk to go to work or staying at home with no pay or cushion of support. 

None of this is meant to ignore the massive value being created by platforms - Facebook, Amazon, and Google, in particular - in the middle of this current crisis.

But a lack of regulation, the legitimization of surveillance, and the prospect of ever increasing monopolistic power may eventually lead us to a world where the dark side of platforms dominates the narrative.

Two potential scenarios for a post-Covid world

So we have two potential scenarios for a post-Covid world. One where platforms get bigger, work with even lower regulation, and potentially further play to their dark side. And another where we leverage platforms to create large scale solutions to humanitarian problems.

We are definitely going to see a bit of both. But which of the two scenarios wins in a post-Covid world may very well be determined by the choices we make over the next few weeks and months.

We have a unique opportunity to reimagine systems for a post-Covid world. As with the cash transfer programming example above, I have been selectively working with a few not-for-profits that are designing scalable systemic responses to the current crisis. More broadly, I’m also currently partnering with the Societal Platform Foundation to frame how platforms can be architected for large scale social good in a post-Covid world.

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  1. This week, Harvard Business Review selected my article on the shift from pipelines to platforms, co-authored with Marshall Van Alstyne and Geoff Parker, as one of its top 10 strategy articles, alongside Michael Porter, Clayton Christensen, A.G. Lafley, and others.

This makes the article one of the extremely rare articles to have been featured thrice in an HBR Top 10 Must Read. It was earlier featured in HBR Top 10 Must Reads 2017 and HBR Top 10 Must Reads on Business Model Innovation.

  1. My online program on platform strategy - based on my bestselling books Platform Revolution and Platform Scale - will be launching in mid-April. The program has been live at several Fortune 500 firms over the last 2 years and covers a lot of exclusive content, only available to enterprise clients so far. Stay tuned for more updates in the next newsletter.