Non-standard employment and platform cooperatives in the digital transformation of industry (own-initiative opinion)

This page is also available in

informatieve nota: Non-standard employment and platform cooperatives in the digital transformation of industry (own-initiative opinion)

In the rapid transformation process of the global industrial landscape, digitisation has assumed a fundamental strategic function. It now covers the entire cycle of the value chain of products and services and involves both large enterprises as well as small enterprises and micro enterprises. In this process, the need for flexibility and speed of adaptation often lead to the need to outsource parts of the production process to professionals who often have the position of "freelancers". For example, let's think of the whole world of computer programmers, data analysts and application developers, or all the suppliers of ancillary services, which are often very fragmented. This certainly has the advantage of great flexibility, but on its own it brings a great dispersion of skills and often also a lot of discontinuity.

In this perspective, favouring the birth of new enterprises, that aggregate these freelancers in cooperatives, could help to develop new forms of business and, on the other hand, favour the sharing of skills and knowledge. The aggregation also in the end could not only benefit the those who perform these activities, but propose reliable and professionalised interlocutors to the system of large enterprises.

The legal form of cooperative, organised on digital platforms, could also lend itself effectively to organising data exchange and sharing between agencies, which include more and more companies and in particular SMEs, which have greater difficulty equipping themselves with intermediaries for management and exchange of data, allowing aggregate SMEs, for example, to maintain the governance of these structures.

This seems to be referring to the Article 9 of the Proposal for a Regulation on European data governance (Data Governance Act)  presented on 25 November 2020 by the European Commission: "services of data cooperatives, that is to say services supporting data subjects or one-person companies or micro, small and medium-sized enterprises, who are  members of the cooperative or who confer the power to the cooperative to negotiate terms and conditions for data processing before they consent, in making informed choices before consenting to data processing, and allowing for mechanisms to exchange views on data processing purposes and conditions that would best represent the interests of data subjects or legal persons".

Another very interesting aspect of this phenomenon concerns the possibility of supporting the entrepreneurial propensity of non-standard workers. Indeed, over the last decade, the term "non-standard employment", together with all of its synonyms such as "atypical work", has been used in employment-related policies so often that it has almost become the new standard.

The great transformations in the way of doing business and working have now broken the barrier that existed between self-employment and employment.

The spirit of enterprise, entrepreneurial skills and self-entrepreneurship are today the fundamental levers for growth. However, doing business in solitude and above all doing it when you are young is difficult. For this reason, it could be interesting to develop a particular form of cooperative which has begun to establish itself by favouring, above all thanks to new technologies, the aggregation of young self-employed and freelance workers into a cooperative.

Non-standard employment (NSE) is a concept which has received increasing political attention, particularly over the past few decades.

Globalisation and technological developments have changed the world of work in which the idea of full employment with standard jobs is broken and NSE has continuously increased across the world.

Whilst NSE allows enterprises to use their labour force in a more flexible way, for workers – although it can provide some benefits – most of the time it means precariousness at work.

Labour regulations and social security systems which had developed in line with standard employment do not function properly for most non-standard workers.

Many of the challenges raised by NSE today have encouraged cooperatives to provide answers to workers' needs that are not met by current institutional arrangements, while at the same time striving to increase self-realisation of self-employed workers by encouraging worker ownership participation.

In Europe, a lot of cooperatives have been organised by the self-employed, such as farmers, retailers, professionals and artisans.

Now a new cooperative model is emerging for independent workers and freelancers: Recently, new cooperative models have appeared as responses to the significant increase in new forms of work, particularly for independent workers and freelancers.

These new forms of cooperatives can represent an excellent tool to encourage an increased diffusion of business capacity, supporting young people in the challenges of starting new businesses. In particular, thanks to new technologies, some form of new economy such as the so-called platform economy, could find in the cooperative tool the way to make many self-employed workers also owners of these platforms and therefore avoid some drifts that some people describe as "uberisation".

Recently, new types of business models, mainly performed through on-line platforms, have drawn a lot of attention. The new economy emerging around them has different denominations, such as the sharing economy, on-demand economy, collaborative economy, peer-to-peer economy, access economy or crowd economy.

Work and employment in this new economy is also based on self-employment status and they are often associated with precariousness.  Platform cooperatives do not just refer to cooperatives using on-line platforms but, more broadly, it is a movement oriented toward collective ownership of digital services.

The basic idea of platform cooperatives is clear: new business models based on the internet and on-line platforms can be combined with the cooperative model by giving ownership and controlling power to the very people who use and work through on-line platforms. Therefore, based on experimental experiences, we can envisage several possible scenarios in which these innovative forms of business can answer the issues of work and employment in the platform economy.

With this own-initiative opinion, I could bring to the attention of the European institutions the innovative good practices that are emerging and thus favour the spread of a European and participatory way towards the development of the platform economy as well as the active participation, above all of young self-employed workers, in the implementation of a more inclusive digitalisation of the economy.

Composition of the study group

Administrator in charge: Adam Plezer / Assistant: Elzbieta Ciolek