The rise of online services exchanges

I frequently refer to online services exchanges to illustrate the inexorable drive of globalization and commoditization. These sites, such as Elance.com, Guru.com – both of which cover all personal services – RentaCoder.com specifically for software development, the Europe-based GetaFreelancer.com, and a host of others, allow anyone anywhere to post a job they need done, and to get talented professionals globally to bid their lowest price for the work. Graphic design, web development, marketing, writing, administration, sales – anything that can be done virtually is offered on these exchanges. Elance’s tagline “Everyday Outsourcing” says it all, particularly when 40% of work performed crosses national borders. The exchanges first rose during the dot-com boom, then struggled, with notably eLance changing its model – as many other B2B exchanges – to selling software and corporate processes to complement the actual exchange itself. Now the approach has been validated and increasingly, independent professionals are offering their services online. The most obvious implications are global competition, and that services are becoming commodities. Most professionals who experiment with the sites are shocked at the prices at which some people are prepared to offer their services. Yet some people do make a good living from the business they win on the exchanges. The exchanges bring home the idea of “polarization” that I believe is one of the key aspects of the future of work. Many people around the world will find their work increasingly commoditized in the face of global online competition, with constant pressures on fees and their livelihoods. However those who have deep specialist knowledge, and can create unique insights and value by collaborating with other knowledge specialists – be they colleagues, professionals at other firms, or at their clients – will command an increasing proportion of economic value. These are realities of the network economy. Yet we must guard against the dangers brought about by this polarization.