By Nicolò Boggian, National Account Manager — Public Sector presso at Indeed.
This blog is produced as a part of the Reshaping Work 2025 Online Conference. The opinions and views expressed in this publication are those of the author, who presented his insights at the Online Conference. They do not purport to reflect the opinions or views of Reshaping Work or organisations that have supported the programme.
Generative AI (GenAI) is reshaping debates on the future of work. Its promise is significant, but the measurable results so far are modest: Acemoglu (2023) estimates just +0.7% in total factor productivity over the past decade. Worse, if applied within today’s rigid or hyper-flexible labor systems, GenAI risks amplifying inequalities rather than reducing them.
The real challenge is not the technology itself, but the organizational and regulatory frameworks that shape its adoption. This is where Europe has a strategic choice to make.
The Digital Plat-Firm Model
A growing number of pioneering companies are moving towards the Digital Plat-firm model, in which digital platforms and AI agents are embedded into the very DNA of the organization. These firms combine:
- Participatory, data-driven governance,
- Project-based teams coordinated through internal marketplaces,
- Digital contracts and policy-as-code,
- Real-time measurement of costs, outcomes, and ESG impact,
- Remote-first culture supported by open handbooks.
Evidence shows that such firms achieve 15–30% higher productivity, +26% profitability, and valuations over twice as high as traditional companies.
Why Current Models Fall Short
Existing labor models are ill-suited to capture AI’s potential. The rigid European model protects equality but slows innovation and wage growth. The hyper-flexible Anglo-Saxon model drives productivity but compresses wages and widens inequality (with Gini coefficients around 0.37).
Both approaches remain tied to task substitution rather than value creation, leaving workers either overprotected but underpaid, or dynamic but increasingly insecure.
Flexstability: From Credentials to Competence
The alternative is Flexstability, a “third way” that combines flexibility with stability by shifting the focus from credentials to competence. In this system, wage floors prevent downward pressure, organizations are structured around projects, and entrepreneurial participation is embedded through profit-sharing and innovation bonuses.
A skills-first approach to hiring and promotion, supported by digital contracts, further ensures mobility and inclusion. Workers are not only protected but empowered to participate actively in shaping company outcomes.
Where applied, Flexstability has been associated with stronger productivity growth, higher median wages, and significantly lower inequality compared with purely flexible systems.
Economic and Social Impacts in Europe
Introducing a dedicated regulatory framework for digital firms would accelerate the diffusion of these models and multiply their positive spillovers. A skills-first regulation at the European scale could:
- Bring millions of women into the workforce, raising the female employment rate substantially,
- Regularize millions of knowledge workers, boosting tax revenues and social contributions,
- Help reverse the brain drain, turning net losses of graduates into net inflows,
- Support higher fertility rates thanks to widespread flexible work,
- Cut CO₂ emissions by reducing commuting,
- Unlock major gains in the EU single market by removing internal barriers.
These benefits show that digital plat-firms are not just a niche model for tech pioneers but a lever for inclusive, sustainable growth across Europe.
Conclusion
GenAI on its own will not deliver inclusive growth. Without new models, it risks reinforcing inequality. But with Flexstability and a regulatory framework tailored for digital firms, Europe can turn this technological wave into an opportunity: greater productivity, higher inclusion, and stronger sustainability.
The future of work in Europe depends on a clear choice: remain trapped in outdated models, or embrace skills-first digital plat-firms capable of combining growth with social cohesion.