Platform EconomyKey Highlights
Platform Regulation
The need for governance of large platforms in the platform economy
Platform Monopolies
How small businesses can survive BigTech and platform cartels
Platform Competition
Why firms, and even nation states, need a new strategy as value shifts to large platforms
Gig Economy
Managing inequality and exploitation in the platform-enabled gig economy
Nine Themes of the Platform Economy
Pandemic behavioral changes drove massive shifts in value during 2020-21. A lot of that has vanished post-pandemic, but many changes persist, giving way to value migration and new value creation.
The key to transforming beyond a crisis often lies in the new value creation pools created by the crisis. Crisis times are accompanied by sudden changes on the supply side and demand side in the platform economy. These changes result in a shift of value from established businesses to new ones, leading to the emergence of new players and the creation of new business models in the platform economy. This value migration is also accompanied by a shift in the control points of the value creation network. This value migration in the platform economy commoditizes some business positions while strengthening others.
“The keys to transformation beyond a crisis often lies in new value pools created through the crisis” Read more on platform economics
Explore Reliance Jio’s strategy and its potential impact on the traditional power structures in the telecom industry. Through a combination of moves, Jio has dominated and reshaped the telco value chain for the platform economy.
While most Indian telcos engaged in price wars on commodity offerings, Jio changed the economics of the industry by subsidizing 4G data and vertically integrating into consumer-facing OTT offerings where it could capture most value.
Take a deep-dive into Jio’s strategy to understand how incumbents can actively shape and execute a dominant platform strategy.
As the platform economy continues to grow, control of trade in goods and services is shifting from nation states to digital platforms. And as business, labor and money are increasingly digitized and exchanged across platform economies around the globe, countries must rethink their position in the global flow of these goods.
No country does this as effectively as China, which in recent years has planned and adopted the country-as-a-platform economy playbook.
China has been following this playbook to
- Aggressively exports its digital infrastructure
- Play a decisive role in the development of technical standards and
- Developing unique crossing points in the digital platform economy
If nations want to gain a competitive advantage, they will increasingly have to adopt a platform economy strategy.
Read : China’s four-pronged strategy for the platform economy
BigTech platforms entering healthcare will be one of the key themes in the platform economy this decade.
Two key shifts – increasing data interoperability and improvements in AI and machine learning – are driving down coordination costs, leading to the shift to the platform economy in healthcare.
Apple, for instance, is pursuing a platform strategy centered around the Apple Health Record. Apple’s Health Record aims to be the central health record for users, combining data from acute care with data from a variety of wellness and disease management devices and services, using FHIR-based integration.
Google’s healthcare play in the platform economy involves provisioning clinical and operational infrastructure that underpins production across healthcare operations, diagnostics, drug R&D, surgery, and claims management. Google’s DeepMind enables access to diverse, siloed data in a standardized format, enabling a wider scope of data elements to be analyzed for clinical decision making.
Read further and learn how platforms enter new industries either by creating market bottlenecks or by replacing traditional industry infrastructure (or both), with illustrated examples of the platform strategies pursued by Apple and Google in healthcare and Amazon’s contrasting play.
The 2010s were largely about unbundling finance, the winners in the 2020s will be the ones who successfully re-bundle finance.
Fintechs began by “unbundling” financial services. They identified one traditional banking function, and executed it with finesse. However, unbundling creates a fragmented customer journey and increases search costs for consumers. This decade will be dominated by financial services players that can successfully “re-bundle” services to cater to the evolving financial needs of its customers.
Learn about the economics of unbundling and re-bundling using strategies followed by Ant, Stripe, and Square to create and concentrate value across ecosystem activity.
Additional Read: Unbundling the Unbundlers
Traditional cartels coordinate and cooperate on many different issues, mainly on price and production, but also on the use of standards and patents.
Cartels in the platform economy coordinate primarily on two aspects: data usage and ecosystem governance
Both of these have impacted the traditional production metrics in the platform economy giving rise to new forms of influence over ecosystem-wide activity. They are achieved through data sharing and technology standards, raising antitrust and monopoly concerns about these cartels in the platform economy.
Read further to understand the growing power of platform cartels.
At the start of the 2020s, during the pandemic, BigTech played an instrumental role in combating misinformation, responding to the pandemic related queries, and stimulating economic activity.
While the coming together of BigTech has stimulated economic activity in their respective existing ecosystems, it has also led to the rise of potential conflicts of interests by giving these BigTech platforms unchecked lobbying power in the long run.
You may also like : Platforms for social impact
Platform regulation in the post pandemic world is more critical than ever. No platform roundup would be complete without explaining the dark side of the platform economy and the need for regulation.
Here are the 4 key regulatory themes that are on the rise in the 2020s platform economy.
- The dark side of platform dominance
- Moving fast and breaking things combined with archaic antitrust laws have let BigTech platforms run unchecked far too long in the platform economy
- Opposing schools of thought on platform regulation
- Design principles for platform regulation in the platform economy and unintended consequences of over-regulation
Growing inequality in the platform economy is one of the most prominent manifestations of economic recovery in the post pandemic world.
Platform work often combines the constraints of employed work (lack of free agency) with the disadvantages of being an independent contractor (poor access to benefits).
Lack of transparency leads to information asymmetry that empowers platform owners and disempowers workers. Players in the platform economy tend to commoditize their ecosystem members and centralize power away from them, while extending risks to these ecosystem members.
Read more : Digital Exploitation of Gig Workers in the platform economy
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