Platform economy needs principles of fair play, says Timo Ali-Vehmas

‘There are interesting platform companies in Europe – like Spotify from Sweden and Wolt from Finland – but in terms of platform economy market value, Europe is almost on the same level as Africa,’ points out Timo Ali-Vehmas, Aalto University's new Executive in Residence.

Ali-Vehmas started in his part-time position at the Department of Engineering and Management this autumn.

‘To put it bluntly, Europe is currently a colony for digital platform companies. To fix this, the industry needs ethical and sustainable principles of fair play and related technical specifications, in other words, standards,’ he adds.

Ali-Vehmas emphasizes that the current situation in Europe is not an insurmountable problem. We have been in a similar position before, in the field of telecommunications.

About forty years ago, Europe was an underdog in telecommunications compared to the United States. At that time, Europe was determined to create consistent rules for telecommunications and to promote new innovative and interoperable services as well as necessary standards. Eventually, these solutions and standards spread to all countries outside Europe as well.

‘Today, we all enjoy the significant benefits brought forth by that work,’ Ali-Vehmas remarks.

‘Europe has an opportunity to even become a trailblazer in the platform economy. We could create platform economy standards that take into account the small differences between European countries. These standards would be a good export product. USA and China don’t need them, but the rest of the world – which makes up almost 80% of the world's population – provides an excellent market,’ he says.

A new generation must realize the importance of standardization

Ali-Vehmas is a seasoned expert in standards. His career at Nokia spanned over four decades, and in 2019, he received his Ph.D. degree at the Department of Telecommunications and Networking at Aalto University. Now he has taken on a new challenge: showing a new generation of students how important standards are.

‘The platform economy is already regulated to some extent, and more regulations are coming soon. However, people often forget that regulations don’t provide technical solutions for how to implement the new rules in practice. You need standards for that,’ Ali-Vehmas says.

Ali-Vehmas reminds us that standards are an invisible part of our lives. You often realize their importance only if they are missing. For example, time, track gauge, mobile network, and internet are all defined by standards.

‘Take the GDPR, for instance. It stipulates that people need to have access to their own data. In principle, this happens: if you shop at S or K Group stores, for example, you can obtain information about your purchase history. But the data from different retail chains comes in different formats, and the portability of data from one platform to another is practically non-existent. Standardization would solve this challenge as well,’ he describes.

There are many ways to develop standards. Standards can be produced by recognized European Standards Organizations, or companies can join forces and create them together. 

‘In order for companies to join in, new generations need to be aware of the benefits of standardization. This is the message I am going to promote at Aalto University,’ Ali-Vehmas plans.

As Executive in Residence, Timo Ali-Vehmas will strengthen Aalto University's teaching and research on the role of standards in the technology business. He is currently planning a seminar course for the Department of Industrial Engineering and Management in cooperation with Professor Robin Gustafsson. The seminar will highlight the benefits that standards can bring forth to the platform economy.