Guy Mamou-Mani, President of Syntec Numérique, the French association for computer professionals, and Bruno Teboul, Innovation Director at Paris-based international management consultancy Keyrus, analyse the phenomenon of the ‘Uberisation’ of the economy, and highlight some of the consequences.
From UberPOP to AirBnb, the customers are now taking charge. So are the B2B and B2C models losing control to this ‘shadow economy’? In this interview, recorded for a L’Atelier numérique broadcast, Jean de Chambure and François Sorel ask whether a business model that started out as B2B/B2C is now shifting to C2B – i.e. the customer becoming the entrepreneur. The web giants are in fact following this phenomenon very closely and Amazon is already thinking about ‘uberising’ its deliveries. Guy Mamou-Mani, President of Syntec Numérique and Bruno Teboul, Science, R&D and Innovation Director at Keyrus and co-author of Uberisation = économie déchirée? (‘Does uberisation mean a broken economy?’) give us the ins and outs of a trend that seems to be gathering pace.
‟B2B is dead, long live C2B?”
L’Atelier: Guy Mamou-Mani, you recently published an article in [French online business journal] La Tribune advising companies not to fear the uberisation of the economy. But where do you draw the line?
Guy Mamou-Mani: That’s not really the question. It’s unavoidable. Today the digital transformation of business models is part of everyday life. And I think it’s a great pity that quite a number of French companies still don’t get it. Quite often when I speak at conferences I try to hammer it home that this is something which affects all companies. There’s always someone in the room who claims that his/her customers are all over 60 years old, or that the construction industry isn’t affected. I always give them the same answer: even as we speak, in a garage or an apartment somewhere, there‘s sure to be some young person inventing the ‘Uber’ version of their particular business. We no longer need to ask whether or not to go that route. We must, we have to go down that path. Either you resist and you’re swept aside, or you incorporate the new way of doing things into your business and at that point in time you can transform the threat into an opportunity and start creating new jobs and new business models.
But surely it’s hard to change the mindset at a company which has been in business for many years, isn’t it?
Guy Mamou-Mani: Yes, that’s the crucial point. Contrary to what one might think, it’s not about the technology. The technology already exists. There’s no disputing that. It’s all about managing change. That’s why for example Kenya is the most advanced country when it comes to mobile banking. How come? Because the country had neither banks nor telephones. So it had no legacy to manage in the way that our companies do. That’s why we’re talking about making a transformation. And, yes, it’s difficult.
‟Either you resist and you’re swept aside, or you incorporate the new way of doing things into your business and at that point in time you can transform the threat into an opportunity and start creating new jobs and new business models”
What does the ‘uberisation’ of, for instance, banking in Kenya look like?
Guy Mamou-Mani: Well, there are no branches, no headquarters. Everything is done on a mobile device, which leads to really incredible levels of efficiency. Fixed telephones were not commonly available in that country. So Kenyans immediately took on board all the banking functionality on offer via mobile. But make no mistake about it, banks in our countries are working on doing the same thing. It’s just that it takes time. They have their staff, their branches and their customers to manage.
Bruno Teboul, did you foresee this movement?
Bruno Teboul: Uberisation is a real phenomenon which I see as a further step down the road in the computerisation, the automation of the entire economy. There’s nothing bad about that in itself. But it does entail profound change, dramatic changes in the economy, in employment, in labour laws and contracts, and also marketing and sales. You can see the results when you look at all these startups which used to be operating at the margins and are now sweeping aside traditional ways of doing business.
The other factor – which we shouldn’t forget – is that all these startups have very few fixed assets and are not very capital-intensive. Airbnb doesn’t own a single hotel. Uber doesn’t own a single taxi.
And all these startups have managed to attract stratospheric levels of financing. I really want to stress this point. This is what enables this type of company to become a leader in its sector very quickly, in a market where in fact no-one saw them coming, but where a dominant position can collapse very fast due to the R&D investment pumped into these firms, amounting to tens or even hundreds of millions of dollars. But this isn’t at all what’s happening in France today.
The word ‘unicorn’ has been used to describe this type of company, which is valued at several billion dollars. Today Uber, Airbnb and their like are valued far higher that some firms on the [benchmark French stock market index] CAC40. We shouldn’t forget that.
We’re not talking about a virtualised economy or an economy driven by crazy speculation. This is a real economy.
And it could obviously have a negative impact on employment. We need to be prepared. The most important thing is to be able to build innovative ecosystems, genuine clusters encompassing universities, laboratories – that’s important – startups, companies and major corporations. Unfortunately we currently see very little of this in France.
But what do you think traditional players can do to cope with this change and adjust their business model? There are some open innovation initiatives up and running but they’re mostly still in their infancy.
Bruno Teboul: Well, there’s one essential aspect to innovation. It’s strategic tracking, which can identify promising startups at the seed stage – i.e. where investment is needed very early on.
Now in France and basically across Europe we need to join forces in order to step up investments. Don’t forget that Uber has now raised $2.7 billion in capital.
‟We’re not talking about a virtualised economy or an economy driven by crazy speculation. This is a real economy.”
Guy Mamou-Mani, do you share Bruno Teboul’s view on the jobs issue?
Guy Mamou-Mani: Yes, on this subject I’m a disciple of [French philosopher] Bernard Stiegler who famously stated that ‟employment is dead, long live work!” Many economists argue that computerisation is a job-killer. I think they’re totally mistaken. They’re stuck with the traditional view of employment – manufacturing, services, job contracts, and so on. But the whole concept of a job is about to be completely turned upside down.
The expression ‘reducing employment’ just doesn’t mean anything. There’ll be millions of possible formats. Some people will work five hours a week till they’re eighty, other eighty hours a week till they’re forty, others will set up their own businesses, and so on. At the moment they’re discussing Sunday work. What are we talking about here? We’re entering a world where all our set notions are going to vanish. I reject all those theories because they’re based on false premises.
Bruno Teboul: Nevertheless, it’s now a fact that unfortunately there will be fewer jobs for lower-skilled people within the 2025-2030 timeframe. It’s a pity but some fairly serious studies have shown this to be so. Today we cannot imagine for a moment that people doing low-skilled jobs will be able to survive the ever-faster convergence of science and technology.
In the world of tomorrow, perhaps artificial intelligence will do these kinds of jobs for us. But still, robots will never fully replace human beings.
However, if we’re talking about the number of jobs available, we do need to be prepared for a drastic reduction in low-skilled and low-qualified jobs, and on the other hand a rise in the number of people with a multi-disciplinary and increasingly advanced education, whose task it will be to manage these changes at the point where science and technology meet.
Edited by Lila Meghraoua