Digital platforms have permanently altered social media, entertainment, and collaboration. Moving forward, interconnected ecosystems are expected to leave an indelible mark on the circular economy and manufacturing, even as players grapple with challenges such as value creation, regulation, and misinformation.
At the 2023 MIT Platform Strategy Summit, hosted by the MIT Initiative on the Digital Economy, experts from academia, government, and industry identified five key trends for the platform economy, summarized in a new report.
1. The integration of artificial intelligence. Widespread enthusiasm for AI extends to platforms. Experts associate AI technology with greater scalability and flexibility, enhanced decision-making and human-machine collaboration, and highly personalized processes. Some platforms will create and sell AI technology as a service while others will adopt AI to drive their own businesses.
Despite the myriad opportunities, there are serious challenges associated with AI. The platform sector must be cognizant of hidden biases, labor challenges, and the unequal distribution of AI’s benefits to certain segments of the population to the detriment of others. Turing Award winner and AI pioneer Yoshua Bengio also voiced concern about the possibility of AI intelligence creating something akin to another species that becomes impossible for humans to control. He and other speakers advocated for the design of “safe” AI systems that offer protection against “rogue AI” and for companies, government, and regulators to take immediate action on AI regulation.
2. The growth of circular platforms. Experts asserted that platforms will play a role in supporting the circular economy and sustainability goals by enabling product and materials exchanges and supporting supply chains that emphasize reuse, repair, redesign, and recycling.
There are several opportunities for the role of platforms in the circular economy. They include:
- Product and material exchanges where businesses exchange surplus or waste materials that can be reused for other use cases.
- Reuse/resale marketplaces and programs for clothing and other items.
- Platforms for sharing assets like cars and real estate spaces to reduce idle capacity.
- Circular supplier networks committed to practices such as take-back programs and waste reduction.
- Sustainable logistics collectives that collaborate on backhauling and asset sharing to reduce carbon emissions and miles traveled.
3. Varied platform regulations. Platforms are attracting new regulatory oversight, but companies will have to navigate differences between geographic regions. For example, Section 230 of the U.S. Communications Decency Act of 1996 affords platforms legal immunity for content posted on their sites by third parties, along with the ability to remove or block access to objectionable content if they do so in good faith. In contrast, the Digital Services Act in the European Union requires large platforms to conduct periodic audits and to be transparent, including sharing recommendation algorithms. It also holds platform companies liable if they violate their stated terms of service.
4. Connected manufacturing. Manufacturing has lagged behind other industries when it comes to embracing digital technologies, but that is starting to change. New platform-based offerings are leveraging manufacturing data in support of smarter factory operations and optimized supply and demand forecasting. Predictive analytics, infused with AI, can be used to forecast demand and replenishment needs and to calculate risk. The upside is greatly enhanced supply chain and manufacturing visibility designed to deliver competitive advantage.
5. The increasing power of influencers and the creator economy. What was once obscure is now big business — the creator economy is currently estimated at roughly $100 billion, accounting for up to 40% of overall digital marketing spending. The industry is being driven by independent bloggers and video hosts who are monetizing their activities, some by partnering with traditional companies to stake out new ways of connecting with audiences.
Marketers in the creative economy face challenges like burnout and a lack of time for creative brainstorming, according to Heidi Mika, director of influencer marketing at Mekanism. ChatGPT and other AI tools could help influencers save time and manage workload.