Over the past two decades, the widespread adoption of digital platforms have revolutionised a considerable number of industries. Consider retail, for instance, and how e-commerce giants like Amazon and Alibaba have transformed the sector by providing democratised access to goods and allowing small local businesses to reach global markets without the need for extensive physical infrastructure.

Meanwhile, in the financial sector, digital platforms such as PayPal and Square have reshaped payment processing, enabling seamless transactions across borders and fostering financial inclusion. The transportation industry has also been profoundly impacted by platforms such as Uber and Lyft, which have disrupted traditional taxi services.

This shift towards digital platforms, which was accelerated further by the COVID 19 Pandemic, has irreversibly changed both consumer and business behaviour.

In fact, according to recent statistics, worldwide spending on digital transformation reached £1.44 trillion GBP in 2022, marking a 16 percent increase from the previous year. This trend shows no signs of slowing down, with projections indicating that £3.04 trillion GBP will be spent on digital transformation by 2027.

Nonetheless, certain industries, such as the construction sector, have lagged behind, largely due to the complex and fragmented nature of its supply chains. This is where trade platforms come into play, aiming to bring the same level of efficiency and transparency to an industrial level that digital platforms have achieved in other sectors.

Key obstacles in adopting digital platforms

As expected, shifting an entire sector towards digital platform usage is not without its challenges. One of the primary obstacles is resistance to change. Many businesses, particularly in traditional industries, are accustomed to legacy systems and face difficulties in adopting new technologies. There is often a lack of digital literacy and a fear of the unknown, which can hinder the transition process -  not to mention the importance of relationships that can negatively impact overall efficiency and transparency.

Another significant challenge is the integration of digital platforms with existing systems. Many companies have invested heavily in their current infrastructure, and the prospect of overhauling these systems can be daunting. Additionally, concerns about data security and privacy can impede the adoption of digital platforms, as businesses are wary of exposing sensitive information to potential cyber threats.

Even with such concerns, digital platforms can provide a centralised platform for buyers and sellers, enabling procurement processes to be streamlined and lowering dependencies.

Furthermore, digital platforms enhance transparency in the supply chain. Take a traditional industry such as the timber sector for example: by providing detailed information about the origin, quality and environmental impact of a particular timber source and supply chain, platforms empower both buyers and sellers to make informed decisions. This fosters trust between the two parties.

Will digital platforms negatively impact the labour market?

Nonetheless, one of the ‘elephants in the room’ is the concern that the rise of digital platforms will negatively impact job availability. While it is true that automation and digitisation can lead to the displacement of certain jobs, they also create new opportunities. For example, the adoption of digital platforms results in a demand for professionals who can manage and optimise these platforms, as well as those who can analyse data to drive business insights.

Furthermore, traditionally skilled workers who know the ins and outs of their particular industry will very much be required alongside digital developments such as AI and automation. Additionally, since many modern digital platforms promote sustainability, there will be a need for experts in sustainable sourcing and environmental impact assessment.

Moreover, digital platforms can facilitate remote work and flexible job opportunities. The COVID-19 pandemic has already demonstrated the viability of remote work, and digital platforms can further enable this trend by providing the necessary tools for virtual collaboration. This can open up job opportunities to a wider pool of candidates, including those who may have been previously excluded due to geographical constraints.

As such, digital platforms have the power to drive efficiency and fairness across various industries. They provide new opportunities for smaller buyers to access a larger audience, help businesses to function more efficiently, and provide new job opportunities. With this in mind, the potential benefits far outweigh the obstacles, even though admittedly, some obstacles remain. By embracing digital transformation, we can create a more equitable and prosperous future for all involved, from small businesses to large enterprises.

David De Jong is CEO of VonWood.