How the internet doesn’t create jobs but leads to more entrepreneurship

I recently read this discussion thread on Chris Dixon’s blog.  Chris is an early stage investor based in New York who writes some thought provoking and insightful stuff about tech startups and how the internet changes business.

Chris’s post sums up the difficulty that politicians and many commentators have when they talk about new businesses creating lots of ‘jobs’, i.e. more employees so government can get their hands on people’s income more easily through PAYE and National Insurance (in the UK).  However, the vast majority of new companies in the West are web-based platforms that work very differently from traditional corporate hierarchies which web-orientated businesses are rapidly replacing due to their more open and collaborative approach, efficiency, superior access to information, closer proximity to customers and better network connectivity.

Other than a core team, digital organisations have no need to scale by employing people and instead look to work with the best contractors at the optimum value proposition anywhere in the world should they need any specialist assistance.  Instead, the web portals built by internet entrepreneurs are designed to create opportunities and income streams for other people wanting to buy and sell products and services.  They are essentially P2P platforms that make it easier for individuals to do business with other sentient and like minded people, rather than have to deal with inefficient, faceless corporate brands.  They thus reshape our economy from one of huge corporations with lots of jobs to huge online hubs which offer lots of income streams and opportunities for those working on a self-employed basis.

As small teams creating and managing large online communities and platforms continue to disrupt old-model corporations with thousands of retained employees, huge seas of people will need to adapt, shake off the shackles of employeedom and become far more independent and entrepreneurial in order to find their place in the new digital economy.