Digitized Labor by Lorenzo Pupillo Eli Noam & Leonard Waverman

Author:Lorenzo Pupillo, Eli Noam & Leonard Waverman
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

8.4.8 Fundamental Characteristic #8 of the Digital Economy : The Transformation of Firms into “Network Companies” Leads to a “Freelance” Economy

The economic system based on the electronic networks changes work relations. Firms become organized as networks . They hire by project. They outsource to contactors. They do everything they can to reduce the fixed costs and to shift it to others. Examples are computer chip making and film production . Most chips today are designed by companies but not manufactured by them. Sometimes even the design gets outsourced to design bureaus. The same holds true for the Hollywood studios. Most of the films they distribute are made by independent entities, which in turn contract with others for their temporary services . Increasingly, collaborators are assembled for projects on a project basis. Companies contract workers , consultants , and outsourced vendors. 49 In the same way that “just in time ” production has shifted manufacturing, capital assets, inventory, and risk to the suppliers of components, so it is now giving rise to “just in time ” workers —employees whom a business can hire on a moment’s notice to fill a moment’s need. 50 These “just in time ” workers have few of the benefits that traditional employees have gained over time. No health and safety protections, retirement plans, or overtime pay. This organizational model has the potential to become the model for the mainstream firm of the future, given its project-oriented, fluid management structure, flexible skills deployment, and reduction of fixed costs.

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