The Evolution of the Global Digital Platform Economy: 1971-2021
32 Pages Posted: 20 Mar 2021
Date Written: February 14, 2021
Abstract
The emergence of digital technologies has significantly reduced the economic costs of data—search, storage, computation, transmission—and enabled new economic activities. Over the years, firms able to create a platform-based ecosystem have become a force of “creative destruction.” Economic activities (C2C, B2C, B2B) have been reorganized around platform-based ecosystems for value creation and value appropriation, which are orchestrated by multisided platforms via the “digital hand.” To further understanding of the Digital Platform Economy (DPE), this paper provides a conceptual framework consisting of three interrelated concepts: digital technology infrastructure, multisided digital platforms, and platform-based ecosystems (users and entrepreneurs). Quantifying the DPE uncovers a European lag in platformization relative to the United States and Asia; European incumbent firms have not introduced new technologies in sufficient volume, and startups there have remained small and not scalable.
Keywords: entrepreneurship, ecosystems, multisided platforms, platform economy, users, transaction costs, digital economics
JEL Classification: L20, M13, O33, D23, D83
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