The Evolution of the Global Digital Platform Economy: 1971-2021
32 Pages Posted: 20 Mar 2021
Date Written: February 14, 2021
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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