Digital platforms and the glorification of entrepreneurship

Digital platforms are already fundamental to the livelihoods of millions of small business owners. For some, digital platforms are important tools to support, facilitate and enhance their work; for others, digital platforms represent the entirety of their business model. As the use of digital channels becomes ever more widespread and integrated, the debate surrounding their perceived pros and cons rumbles on.

One of the most common criticisms is that this new economy encourages instability and uncertainty. The short-term, project-based nature of much of the work can lend itself to a kind of employment that’s innately isolated, fragmented and precarious.

Much less appreciated is how digital platforms impact on what work actually means. To put it another way: how do the users who seek to earn a living through them derive a satisfaction that transcends – or maybe even offsets – the basic requirement of monetary reward?

Our recent research explored this issue from the perspective of freelance designers. We chose a section of the “creative” community because this is a sector notably associated with the notion of meaningful work – the idea of taking pride in what one does or produces, revelling in what can be achieved and retaining a sense of “ownership” long after the job is done.

We wanted to discover what constitutes meaning in the world of digital platforms and, just as importantly, what detracts from meaning. We believe that our findings are relevant to a second vital debate: the long-running discussion around entrepreneurship.

Problems and imbalances

Let’s first reflect on the experiences of business owners for whom the digital platform economy serves as a barrier to meaning, based on the responses to a survey we put out during a recent study. For these individuals work is a source not of worth and satisfaction but of pressure, sadness, resentment and even fear.

One reason for this is digital platforms’ review-based structure, which has become so decisive that many users now prize a positive rating over an appropriate reward. We interviewed numerous designers who confessed that they would rather recommence a project, cut their fees or even work for free to avoid negative feedback that could damage their ability to attract more business.

Relatedly, many users feel powerless in their relationships with clients. They lament that those who request work hold all the aces, with those who actually carry it out enjoying precious little room for bargaining. In addition, platform operators tend to side with clients in the vast majority of disputes – while still claiming a percentage of users’ fees, even if those fees are frequently insubstantial.

So what about those digital platform users for whom work does have meaning? According to our findings, such individuals are often characterised by an entrepreneurial mindset.

Most of our respondents defined themselves as “freelancers”, but a few preferred to be known as “business owners”. Some perhaps applied the latter term optimistically, yet what matters in the final reckoning is their outlook. As one remarked: “I’m trying to become a company. That’s my plan for the future. For me it’s like a challenge – and I like challenges.”

Virtual worlds and real issues

This attitude makes perfect sense if we consider why many freelancers “go it alone” in the first place. As the word suggests, they want freedom. They’re seeking autonomy and independence – the scope to make their own decisions, choose their own path and even reach a position of being able to welcome or turn away work as they see fit.

Yet the assumption that digital platforms constitute a ready-made hotbed of high growth and enduring success is dangerously misguided. Yes, they can provide a route to both money and fulfilment, particularly for users with strong entrepreneurial orientation; but for many participants the actuality is far from such a rose-tinted ideal. If anything, this is a sphere that illustrates especially clearly the perils of unduly glorifying entrepreneurship.

Spectacular tales of online millionaires with the power to shape their own destiny are understandably appealing, but the reality is usually very different. Research has shown that more than half of all entrepreneurial ventures fail within their first four years, and our own findings lay bare how experience can fall dramatically short of expectation in the digital platform arena.

Above all, the flaws and asymmetries revealed by our study underline an urgent need for reform. Regulators should step up their involvement – this is a classic case of technological innovation leaving regulatory oversight in the dust – while operators should look beyond their present role, which in many instances is essentially confined to supplying a “space” and taking a cut.

As more users join the digital platform economy and as competition thereby intensifies, sustainability and meaning alike might well be derived from hopes of professional liberation and prosperity. But they are also likely to stem from working environments that are determinedly geared towards the survival and satisfaction of those who inhabit them.

 

Dr Ekaterina Nemkova is an Assistant Professor of Marketing at Nottingham University Business School. She co-authored the study referenced here, In Search of Meaningful Work on Digital Freelancing Platforms: The Case of Design Professionals, with Dr Pelin Demirel, of Imperial College London, and Dr Linda Baines, of the University of Southampton.

The full journal paper, published in New Technology, Work and Employment, is available at https://onlinelibrary.wiley.com/doi/full/10.1111/ntwe.12148