NEWS
Diffusion of the digital service economy contributes to the widening of intraregional wage inequalities in Europe, especially when three economic models coexist, reinforcing their impact, a recent UNTANGLED study finds.
In the research paper “The digital service economy as a source of intraregional wage inequalities” Roberta Capello, Camilla Lenzi and Elisa Panzera analyse how three models of the digital service economy – the product-service economy, sharing economy and online service model – affect wage disparities within European regions.
Each of these models has specific characteristics. The product-service economy entails a strategy wherebymanufacturers offer their customers not only products but also various services, such as training or consultancy. Meanwhile, the sharing economy is based on the creation of new online markets for underutilised assets (e.g. a spare seat in a car, a spare bedroom, spare time) which are made temporarily accessible to other users upon payment based on a peer-to-peer exchange (BlaBlaCar, TaskRabbit, Airbnb). Finally, the online service economy involves digital platforms providing services, products or content (e.g. mobility solutions, food delivery services, payment) without owning the necessary assets. This value creation model rests on the dematerialisation of assets or products, enabled by the unbundling of products from the service a product can provide (Deliveroo, Uber).
“Popular fears that the diffusion of the new technologies will increase inequalities are not fully misplaced. However, regions are not similarly exposed to these risks, and only some of them are experiencing a widening of wage inequality conditions,” says Roberta Capello, professor at the Politecnico Di Milano.
She and her co-authors analysed data on innovations and wages from 164 regions between 2009 and 2016 and found that a noticeable widening of wage inequalities took place in regions where digital service economy models were fully developed and co-occurred. When only one model prevailed, its impact on wage disparities was limited.
“Our findings suggest that in regions with a fully developed digital service economy pattern, or in those where sharing economy is dominant, policymakers should focus on interventions,” says Camilla Lenzi.
Capello, R., Lenzi, C., & Panzera, E. (2023). “The digital service economy as a source of intraregional wage inequalities” (Deliverable 4.7). Leuven: UNTANGLED project 1001004776 – H2020.
The paper is available here.
