Opportunities and Pitfalls in a Digital Information-Driven Economy

Anyone who has lived through the past 30 years knows that the rise of digital technology has changed much of what we once took for granted about jobs and economic opportunity. What is unclear is how sustainable these new modes of social and economic interaction will be and how to capitalize on (not strictly limited to monetizing) these new tools.

Early on many of us went through a phase when we thought that digital technology would be the big leveler that would deal a death blow to discrimination that marginalized us based on race or gender, despite our knowledge or skills. Employers would no longer care what we looked like, so long as we were good at designing web pages, or teaching online, or coding. In fact, many of us saw the emerging digital economy as being something that might free us from having to deal with employers altogether. The prospect was that we could become our own employers. The only people we would have to cater to would be potential customers, clients and constituencies.

Consumers wouldn't care what we looked like either because they wouldn't even see us -- they would just interact with the content that we generated over the internet. For those of us who were culturally isolated to varying degrees, digital information technology and social networking over the internet held the promise of linking us to the mainstream -- even creating a new mainstream -- and socializing the previously marginalized so as to be more effective in interactions with dominant cultures.

Not only did this optimism fire the hopes of individuals in technologically advanced countries, it also fueled optimism marginalized populations within the international economy. These hopes fueled speculation that digital technology would lead to the rise of a "new Africa", which would lift nations out of poverty and link them to a global economy with opportunities that were previously unimaginable.

Although that narrative of optimism is certainly out there, not everyone today is so sure that digital technology will be the panacea that many had hoped it would. There are some indications that this technology has made hyper-exploitation easier than it was before, increasing economic disparity while providing few opportunities for social mobility. Kentaro Toyama says that expectations are exaggerated and that the digital economy has not delivered on its promise to reduce levels of poverty or increase social mobility, and has -- in fact -- sharply increased rates of wealth and income inequality.

But on the other side of the debate, Paul Mason is coming out with a book to proclaim that the end of capitalism has begun because digital technology and the information-based society have made old economic relationships obsolete and people have non-monetary motivations to do work. This non-monetary motivation, Mason argues, coupled with the free flow of information and ideas will make the ability to set prices and assign monetary value to goods and services impossible, thus destroying the capitalist system of economic social relations. Mason holds the so-called "sharing economy", "collaborative economy" and the "gig economy" as forerunners of a post-capitalist economic system that he believes is emerging more-or-less organically and driven by the way human beings interact with the technology that we use.

Source: UK Guardian July 17, 2015

In 2008 Bill Gates promoted his idea of "creative capitalism" which seemed to foreshadow what Mason would argue later, with the difference being that while Mason came to the conclusion that non-monetary motivation would lead to the end of the capitalist system, Gates saw it as offering potential to humanize capitalism and make it more responsive to global problems that defied profit-oriented solutions.



Gates argued that knowledge workers are not just motivated by a large paycheck, but also by the image of the companies they work for. He said that they want to work for companies that are widely perceived to be involved in solving some of the world's most difficult problems.

The idea of the "share", "gig" and "collaborative" economy has come under criticism by those who have taken a close look at some of its signature companies, especially Uber and Lyft car-sharing enterprises. Rather than fostering new networks of more democratic economic relationships, Oliver Blanchard argues in his piece "Stop Calling it the 'Sharing Economy'. That Isn't What It Is," what is actually occurring is a highly profit-oriented corporate flanking action to avoid hard fought-for regulations that were put in place to protect both the workforce and consumers.

Picking up on this theme, Nancy Cook, writing in The Atlantic, argues that the activities are called the "sharing economy" are not really examples of the sharing economy at all. An authentic sharing economy, she argues, would look more like a public lending library rather than the apparently hyper-exploitative model used by Uber and Lyft.

However, arguments based on the ability to rely on the creative impulses of humanity and that, freed from the necessity to earn a living the old fashioned way and having access to an infinite amount of free information and ideas, people will be even more creative and productive reflects observations that people have made from their own experiences with digital technology in the fields of education, social media, and online collaborative efforts.

The concept of what it means to live in a time of information abundance, for example, in contrast against previous periods of information scarcity, was the main point of a talk that Diana Laufenberg at a TED conference. The abundance of information, however, means that along with the increase in access to quality information that is out there, one is also flooded with great deal of information that is garbage. Laufenberg says that the challenge for education in the age of information abundance is not gaining access to scarce information, but how to sort through the plethora of information of various quality, and what to do with the information once one has it.

And Chris Anderson explained, in a TED conference, how access to an abundance of information creates what he calls "crowd accelerated innovation" which consists of three things: 1. A Crowd, 2. Light or Open Visibility, and 3. Desire. When the crowd is no longer the local neighborhood, Anderson says, but is the entire globe, all bets are off. The visibility level and the desire or motivation go off the charts. This, he says, is what motivates people to give away their work for free. Working for free becomes synonymous with "openness", which is the life blood of the digital "ecosystem".

Clay Shirky also picks up on this question of what motivates people to create and post content on the internet (essentially "working") for free. This, he says, is what helps to create the abundance of information or "cognitive surplus" that we now benefit from. Human beings have always been motivated to share their knowledge, he says, but global digital technology allows us to share our knowledge more quickly and on a much larger scale than at any other time in history. Shirky says human beings like to create and we love to share. Shirky recognizes, the problem that Laufenberg alluded to: along with good, useful and high-quality information there is also a lot of silly content that is produced and spread. You cannot, Shirky points out, have one without the other. This question of non-monetary motivation and the pleasure that humans get from sharing what they know with wider and wider audiences was the focus of both a TED talk he delivered and an interview he did for NPR.

But all of these arguments don't seem to reflect the realities on the ground. The fact that the millennials are trying to scrape by in the "gig" or "share" economy means that many millennials are financially insecure. It is not at all clear how this propensity to work for free will translate to greater economic opportunity to go along with greater freedom for creative expression, as this video from AJ+ points out: