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The Platform Economy: Transforming Businesses and Labor Markets

Last year, an estimated 1.6 billion people worldwide purchased goods online, while 72 percent of Americans have at some point used a shared or on-demand service.  That’s thanks to the so-called “platform economy,” which connects consumers and producers online.

Online businesses are growing faster than brick-and-mortar stores, according to a 2017 U.S. Small Business Administration report. Entrepreneurs are creating online businesses to market goods— allows artists and crafters to sell their work, while Stella + Dot and LuLaRoe offer individuals with social media accounts an avenue to sell fashion. Speaking of which, social media is transforming marketing, with 45 percent of online sellers reporting that social networks are an important tool in selling products.

Not only are consumers benefiting from the thriving online marketplace, the labor market is profiting as a result of broadband connectivity. There are an estimated 55 million independent workers in the U.S. taking advantage of connecting to clients through the internet, including online services like TaskRabbit that allow skilled workers to promote their services to customers, no matter whether it involves screwing in a lightbulb or fixing a sink. Other platform companies, like Uber and Airbnb, allow people to make additional income by hiring out their cars or homes. Last year, a Pew Research report found that roughly 24 percent of Americans have earned money through the new platform economy.

As it opens new means of employment and bolsters small businesses, the platform economy continues to power new players in startups and innovation — and it’s brought to you by broadband.