How Building Companies Is Still Needed Beyond Freelancer Networks

In today’s collaborative economy, there is a real question in certain service industries of the interest of building corporations instead of just relying on a network of freelancers. This post by Valeria Maltoni ‘Why Build a Company‘ sheds some light on this important question: in fact, only established companies can act in a longer timescale, and this remains a social requirement.

Corporations are of course needed when substantial capital investment is required like in the heavy or light industry of the Industrial Age; but in the services economy where capital investment is minimal, the question remains open and controversial. I know quite a number of organisations that rely mainly on animating freelancers to deliver services. On the other hand, I have build my own service companies as being mainly companies with partners and employees, and if we do use freelancers, it is only sparingly to complement rare competencies.

Valeria Maltoni makes an excellent point about timeframes. “The destiny of our species depends on our ability to survive on different time scales.” And companies have a different scale (years) compared to freelancers (days, months). Their project is to developing something over years and even sometimes generations.

She quotes “Corporations are entities that can transform and dissipate socially useful energy throughout society“. “Building a company is creating the vessel to hold value“, and this value can have many dimensions beyond the financial. In building my companies I certainly take a longer time view to deliver some kind of long standing value to the world.

Even in the Collaborative Age, the core of corporations to develop and keep value on the longer term will remain required. There may be more freelancers and people flowing from project to project, but some longer-term value receptacles must remain.