The Changing Face of Global Capitalism

Sharing Economy and Digital Society in Indonesia

Kurniawati Sa’adah

International Relation Department, Universitas Airlangga, Surabaya, Indonesia

Keywords: digital society, global capitalism, Indonesia, TCC

Abstract: Globalisation has an impact in almost every part of the world. Indonesia is one of the highest users of the

internet and social media platforms yet there is a huge gap in inequality in terms of internet access

throughout the country. The digital market in Indonesia presents new challenges for current competition,

such as Grab, Gojek, AirBnB, etc. In order to meet rising demand, the market place has attempted to adapt

itself to the new changes and challenges. This is a face of global capitalism that is very old but, at the same

time, fundamentally new. It is considered old because of its objective towards relentless competition in the

pursuit of profit, and the pursuit of individual satisfaction (deferred or immediate) is its driving engine. But

it is fundamentally new because it is driven by technologies in information and communication that are at

the root of new productivity sources, new organisational forms, and the construction of a global economy.

Social development today is determined by the ability to establish a synergistic interaction between

technological innovation and human values, leading to a new set of organisations and institutions that create

positive feedback loops between productivity, flexibility, solidarity, safety, participation and accountability,

in a new model of development that could be socially and environmentally sustainable in a mostly digital

era. The emergence of a digital society represents part of the consequences of this new form of global

capitalism. This study analyses how new global capitalism and the emergence of a digital society are

manifested in a vulnerable era of globalisation with asymmetric information dissemination in Indonesia.

The concept of a Transnational Capitalist Class (TCC) explained by Leslie Sklair is used to explain the

phenomenon of global capitalism in the digital era, particularly in Indonesia. This study argues that global

capitalism in a digital society era is an innovation of the old version of global capitalism. However, the use

of technology particularly in the information, communication and transportation sectors is an inevitable

phenomenon yet not everybody can get access into the internet generally

1 INTRODUCTION

The public perception of global corporations has

changed substantially in the past few years.

Globalisation and the massive progress of a digital-

based business model has triggered the shifting of

corporations. An emerging digital platform economy

is increasing significantly. The massive development

of technology and information over the last few

decades has made many changes in industry and

corporations. While it has changed the assets-based

model into capability-based models, the system and

the user have also changed rapidly. There are many

business startup lines based on technology. MNC no

longer appears in a conventional form, but has a new

face in the form of technological innovation. The

emergence of startup companies e.g., Uber, Grab,

AirBnB, Gojek and others and the wish for them to

be on demand is just now beginning to gain

widespread popularity and generate huge incomes.

Shared mobility business models are considered

more effective and could unveil the optimal

relationship between corporations and the customer

to achieve the common objective of sustainable

business (Cohen, 2014). The massive development

of technology and the high use of the internet has

shifted almost all of the business models as well as

the trajectory and long-term orientation of those

start-up companies. The market place attempts to

adapt itself in the new digital era and for digital

literacy. These new values are causing people to be

up to date and to update these technological changes.

These global phenomena are all over the world. It

has virtually triumphed and reviled everywhere

(Wolf, 2018). Such a sophisticated market is the

most just and humane economic system yet

284

Sa’adah, K.

The Changing Face of Global Capitalism.

DOI: 10.5220/0008820502840288

In Proceedings of the 4th International Conference on Contemporary Social and Political Affairs (ICoCSPA 2018), pages 284-288

ISBN: 978-989-758-393-3

conceived but is also a challenging system that has

triggered the shifting of global capitalism. It creates

innovations, developments and breakthroughs in as

many ways as we could possibly imagine. But on the

other hand, these massive changes are unequal

especially in the developing countries.

As a developing country, Indonesia is one of the

highest users of the internet and any kind of social

media platforms because of its huge number of

citizen. The technology shift of business models as

well as the daily lifestyle make this inevitable. While

the virtual amount is most likely high, the impact is

consider low. The gap between the city people and

the rural people is quite high. The widening

inequality in accessing these technological

improvements is a real deal. The law and regulation

system need to be changed in regard to these

matters. It is easy to accept and blame the

desirability of government to provide these within

manageable bounds. And because information is

widely disseminated in a free society, companies

must adhere to environmental standards if they hope

to maintain their reputation (Wolf, 2018). It

segregates society in the most casual way between

people who are well informed and people who are

less knowledgeable about technology. A subtle

critique has emerged among scholars themselves,

some of whom even decry capitalism as inherently

inhumane and in need of a human face, and some of

whom foster and prosper the new form of digital-

based capitalism. These inequalities can lead to so

many possible problems and conflicts of interest.

There are pros and cons over this change. How

could this changing system and trajectory of this

system in the future affect our daily lives, in terms of

whether this new era will become much more

beneficial for people or the other way around.

2 METHODS

This paper uses a qualitative explanatory research

method as well as literature review. This study refers

to some of the previous studies that address the

issues and related phenomena. The data obtained

will be sorted out to be classified in accordance with

the materials needed in the research, then in-depth

analysis will be conducted and associated with the

concept that has been prepared to further draw

conclusions in order to answer the formulation of the

research problems. In this study, the research

conducted is deductive qualitative. Referring to

Pupu Saeful Rahmat's opinion, qualitative research

is research conducted with observations on the

behaviour of the related actors. This research is

intended to observe the life of a historical society,

the behaviour, the functional organisation, and social

activities that cannot be obtained through statistical

procedures (Rahmat, 2009). Based on Bogdan &

Biklen (in Grace, 2009), qualitative research is

useful for generating descriptive data on human or

organisational behaviour in certain context settings.

This research is used by the author because it is

considered able to provide a descriptive explanation

of the behaviour of actors, formulated in the

formulation of research problems.

In addition, the author uses the concept of a

Transnational Capitalist Class (TCC) which is

argued by Leslie Sklair (2002). Sklair (2002) argues

that some treasons which affect states and global

corporations cannot necessarily stop the pattern of

consumerism happening at the global level because

they are part of them. The author uses literature

review to compare and deepen the data and the facts

with regard to this research.

3 RESULTS

This concept is a newly categorised concept in

various literatures. In its implementation also still

biased globally. The sharing economy has grown

rapidly throughout the world since 2012. However,

researchers from various organisations are still not

much to analyse the business model of the sharing

economy in terms of its implications for companies,

cities and the environment. Despite the massive and

rapid development of this new business model, there

is no universal definition of the concept of an

"economy", "collaborative economy", "ride-

sharing", "peer-to-peer economy" model, etc. The

concept of this business model has grown rapidly

thanks to information and communication

technology in different parts of the world so that the

sharing economy is defined as any market space that

unifies an individually distributed network to share

or exchange underutilised assets. This includes all

types of goods and services distributed or exchanged

for monetary and non-monetary benefits (Koopman,

Mitchell, and Thierer, 2014). This concept is more

focused on cooperation and not on ownership of

assets to reduce the costs incurred. In the case of

Uber, Lyft, AirBnB and various other startup

platforms, these companies use third parties to run

their businesses. A conventional taxi company must

have assets in the form of a fleet of cars,

professional drivers, parking lots and licenses for the

company's operations. However, non-conventional

The Changing Face of Global Capitalism

285

taxi firms based on technology do not need the

assets. Uber can work with car rental companies or

individuals who have vehicles and the ability to

drive. The principle of sharing the role and then

sharing the results is the main mode in running a

business of this model. The sharing economy is an

attitude of participation in economic activities that

creates value, independence, and well-being (CNN,

2016).

In line with Martin (2016), the phenomenon of

the sharing economy can be conceived as being

made up of six things: (1) economic opportunity; (2)

more sustainable forms of consumption; (3) a road

to a decentralised, fair, and sustainable decree; (4)

creating unregulated markets; (5) strengthening the

neoliberal paradigm; (6) an incoherent business

innovation opportunity. There are many critics, but

not a few who consider the business model as a

practice of sustainable promotion of consumption in

the long run. For the Uber case, its existence can

reduce the use of private cars on the highway. Uber

is also a disruption for existing taxi businesses or

any other conventional transportation. There are so

many countries and companies that have adopted the

concept. The digital society could simultaneously

adapt these changes in their lives. The impact of

widespread technology and internet make it easier

and convenient. In the next few decades, at this rate,

the data shown predict that more people will use the

internet in their daily core lives. The trajectory of the

digital economic business platform simultaneously

has potential.

4 DISCUSSION

The concept of a Transnational Capitalist Class (TCC) by

Sklair (2005) explains that consumerist culture is not

necessarily made by corporations and that is why it is

their fault. But, consumers also play a big role in

captivating and prosecuting demand for certain products.

As long as the demand is higher, the corporations will

likely use this opportunity to gain more profit and

revenue to keep running their businesses. The higher the

profit, the higher the economic growth in the business

sector. This will benefit the country in some ways not to

mention the degradation effect in other sectors. This cycle

has been a vicious cycle over time that make it even more

complicated at the national level. The government is in a

bind situation. Members of this new class have

connections with each other that have become more

significant than their ties to their home nations and

governments (theconversation.com, 2017).

However, awareness is needed not only at the

government level, but also at the individual level.

Quite apart from this, every individual is responsible

for this happening. TCC works in global politics in

terms of the role of globalising professionals,

scientists and technologists on whom the whole

activity is said to rest (Sklair, 2002). Besides, there

are four overlapping factions in the transnational

capitalist class: TNC executives, globalising

bureaucrats, politicians and professionals,

consumerist elites (merchants and media) (Sklair,

2011). For instance, the corporations which have a

palm oil business will likely promote and engage

methods and ways to prolong the business in the

long term (Saadah, 2018). Consequently, practices

such as land clearing, including forest fires is

considered a necessary thing and that is why it is

important to keep this situation. In terms of startups,

the corporations which focus on the transportation

business such as Gojek, Uber, Grab, etc will likely

expand their businesses if the demand is high and

sponsored by the internet accessibility as well as

media marketing. Globalisation allows the extensive

spread of this new form of global corporation,

thanks to the internet which make it easier for the

four factions to operate comprehensively.

However, the dynamic of the global corporation

is a constant phenomenon. Like it or not, we cannot

stop the wheel from spinning. The global

corporations which always improve the dynamic

around us always change every single second

without our concern. Change is constant and

inevitable. In the modern era, with the high

influence of internet usage, global corporations have

shifted their business models. Even setting aside the

internet, the demand for the customer and society is

likely to be high. In terms of convenience and

simplicity, the internet makes life easier both for

companies and customer. For instance, startup

companies provide easy access to almost everything

the customer needs in one click. This shifting

lifestyle is considered a global phenomenon.

The sharing economy concept is then to be the

most popular business model (Kenney & Zysman,

2015). This concept has been simultaneously

growing but at the same time, this business model

also disrupts existing businesses. In the midst of the

shifting of global capitalism, there have been several

attempts to resist this activity. Indeed, the

appropriate market rules for competition/antitrust,

labour market, and intellectual property among

many others are becoming increasingly difficult to

specify and legislate for (Kenney & Zysman, 2016).

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Moreover, this phenomenon doesn’t seem to be

about to stop in the near future but is rapidly

growing. Digital platforms are the base upon which

an increasing number of connection-based activities

–marketplace, social, and political—are being

organised (Kenney & Zysman, 2015). The substance

choice of a digital platform is to be as adaptive as

possible.

Indeed, the enormous spread of the internet is

inevitable and is called the third globalisation wave.

But at the same time, this rapid growth is unequal.

This inequality and the gap is huge. In several

developing countries, not all of this concept applies

coherently. Similarly, in the discussion of the

Internet of Things, or the digital-based business

model, we find significant differences between

social emphasis and economic impact. It is most

likely like two sides of a coin which walk hand in

hand.

5 CONCLUSIONS

It is clear that digital technologies have had a major

impact on social, political and economic sectors.

This creates a new type of global corporation and

new method of capitalism. Digital technologies have

progressively made digital society and the new

business model unavoidable. Over the past decades,

this has become a reality and yet the most successful

business model has integrated, at least to some

extent, Uber technology and the sharing economy. It

is not necessarily the best formula, however, because

of the unstoppable changes which have occurred.

However, this phenomenon is proof that customers

are playing a big role in determining the shifting

way global corporations operate. This platform

digital era generates a changing and emerging new

phenomenon in so many ways. But, how can these

changes in the business sector affect the changes in

the social sector such as income inequality, poverty,

and inhabited information? The changing face of

global corporations has the same soul as the old

form of global capitalism in the form of digital

global capitalism. How we connect the enormous

value of these socio-technical shifts into something

more useful and adaptable remains a necessary

question.

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