What's the Future of Work?

Chapter 2. The Rise of Networked Platforms for Physical World Services

Figure 2-1.  

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One of the themes we’re exploring in our Next Economy thinking is the way that networks trump traditional forms of corporate organization, and how they are changing traditional ways of managing that organization. Uber and Airbnb are textbook examples of this trend. Uber has ambitious plans to manage hundreds of thousands—eventually even millions—of independent drivers with a small core of employees building a technology platform that manages those workers. Airbnb is on track to have more rooms on offer than large hotel chains, with under a thousand employees.

Esko Kilpi beautifully described the power of networks in an essay on Medium, The Future of Firms, reflecting on economist Ronald Coase’s theory of 20th century business organization. He wrote:

The existence of high transaction costs outside firms led to the emergence of the firm as we know it, and management as we know it. … The reverse side of Coase’s argument is as important: if the (transaction) costs of exchanging value in the society at large go down drastically, as is happening today, the form and logic of economic and organizational entities necessarily need to change! The core firm should now be small and ...