Technology has leveled the business landscape like a flood levels a rocky field. As value evolves into abstraction, business landscapes once varied and challenging are now smooth and inscrutable.
In the past, the value of goods and services was purchased with the equivalent value in hard currency: coinage was made of gold or silver that held intrinsic value. The U.S. dollar was divided into eight “bits” and broken into pieces to make change — two bits was a quarter of a dollar or 25 cents. The US 25-cent piece — issued as a silver coin until the mid-1960s — still reads “quarter dollar” on the reverse side.
Users now accept an abstraction of value that would baffle previous generations. Credit cards — proven technology from the previous century — changed physical transactions and enabled e-commerce at the end of the last century. But value abstraction now competes at a higher level.
Banking by phone
Take consumer payment gateways. E-commerce a decade ago relied on credit cards, and you can still use them to shop online. However, websites typically push you to apps as data collection assumes primacy in this space.
Retailers prefer payment gateways that supply data on their customers, who in turn expect bonuses in the form of discount coupons and other perks. These gateways often piggyback on popular local messaging apps.
In some countries, specific apps are de rigeur — Line, for example, is the most popular messaging application in Japan, Taiwan, and Thailand, according to Wikipedia. The app's payment gateway, Line Pay, now includes “other features such as offline wire transfers when making purchases and ATM transactions like depositing and withdrawing money.”
If it seems that Line wants to be your smartphone bank, it does. Many consumers prize the ease of use delivered by such apps: delivery of goods to your saved locations with an integrated payment gateway.
Line didn't even exist until a decade ago. “In March 2011, the Tōhoku earthquake and tsunami damaged Japan's telecommunications infrastructure nationwide, obliging employees at NHN Japan to rely on Internet-based resources to communicate. The company's engineers developed Line to facilitate this, and the company released their app for public use in June 2011,” says Wikipedia.
The app is a literal phoenix rising from ashes, modeled on pre-existing messaging apps and flourishing in competition with them. It's become an ecosystem: restaurants post their menus on the app, allowing users to order meal delivery — the value is subtracted from linked Line Pay accounts. With a market cap of USD12.6 billion as of September 2021, Line has gone from an emergency notification system to a major player in the space of a decade.
The rise of Line and its competitors represents a gestalt shift in client thinking. Users trust the app's ecosystem to handle their business with a minimum of error. Cash is eliminated, but stimulation of the “gig economy” (freelance delivery drivers for example) is a side benefit.
On-premises is now almost quaint as data storage moves to the cloud. Increasingly, consumers and businesses alike are embracing abstraction as value. Cryptocurrency, previously regarded as the purvey of nerds and tech boffins, is now mainstream conversation material and its value-spikes are oft regarded with envy.
The concept of abstract value has gone mainstream. And its latest incarnation is the NFT or non-fungible token.
“Non-fungible tokens or NFTs are cryptographic assets on blockchain with unique identification codes and metadata that distinguish them from each other,” says Investopedia. “Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. This differs from fungible tokens like cryptocurrencies, which are identical [and] can be used as a medium for commercial transactions.”
This makes NFTs unique cryptographic tokens with blockchain provenance. The implications for collectible and unique items (artwork, real estate) are profound. Theoretically, an NFT cannot be counterfeited.
This use of blockchain technology as provenance for a digital asset is novel, and as we've seen with cryptocurrency, the path forward is not smoothly paved. Nonetheless, the NFT market value tripled in 2020, and during the first quarter of 2021, NFT sales exceeded USD2 billion.
Kaleidoscope of chaos
Adding up the fragments of value abstraction is beyond algebra. We're still constructing our post-pandemic world, where knowledge workers toil in home offices as e-commerce swells and bandwidth clogs. Creative industries look to NFTs to help solve revenue woes, chief data officers increasingly confront off-premises data issues, and consumers silo themselves into their choice of competing messaging/delivery ecosystems. No science-fiction writer predicted this kaleidoscope of chaos.
While many parts of the ongoing calculus are familiar, the evolution of consumerism is revolutionary. And consumers are spoiled for choice. It may be time for HR departments to consider workers as “consumers of employment.”
In a recent blog post, Jared Spataro, Microsoft's corporate vice president for modern work, wrote: “This morning Satya Nadella and Ryan Roslansky, the CEO of LinkedIn, sat down to talk about the key secular trends they’re seeing as people and organizations everywhere adjust to hybrid work. Their conversation is part of an effort between Microsoft and LinkedIn to help leaders and their teams navigate this new world of work.”
The blog post said that “the evolving Delta variant is compelling many of us to adjust plans for reopening worksites...we had planned for October 4 to be the first possible date to fully reopen Microsoft’s own Redmond headquarters and many other worksites in the U.S. But as we shared with our employees today, we’ve shifted those plans.”
As you've already guessed, “shifted” in this case means shelved. In 2021, employers must be flexible, and as Spataro puts it: “We want to take a learn-it-all approach, and lead with data rather than dogma.”
Data over dogma sounds like a reasonable strategy going forward. It will be difficult for many traditional business leaders to view their workforce as autonomous consumers of employment with agile payment gateways on their smartphones, but as the Microsoft brass declares, adjustment is critical.
Stefan Hammond is a contributing editor to CDOTrends. Best practices, the IoT, payment gateways, robotics, and the ongoing battle against cyberpirates pique his interest. You can reach him at [email protected].
Image credit: iStockphoto/francescoch